FinCEN Alert to Financial Institutions to Counter Financing to Hamas and its Terrorist Activities

The Financial Crimes Enforcement Network (FinCEN) has issued a new Alert to provide information and guidance to financial institutions and virtual asset service providers (VASPs) to help them identify and report suspicious activity related to the funding of the terrorist organization Hamas. The Alert highlights the various methods Hamas uses to raise funds for its operations, including support from Iran, private donations, investments, diverting aid from legitimate charities, and fundraising campaigns involving virtual currency, and outlines red flag indicators to help detect suspicious activity in this context.
##### These red flags include, but are not limited to the following:
– transactions with sanctioned entities or persons;
– transactions with institutions located in high risk third-countries with little customer due diligence practices;
– transactions involving charities where no further information on these charities are provided;
– large transactions to charities with an unknown source of funds and subsequent transfer of the funds to other charities; and
– transactions with suspicious virtual currency addresses.
To conclude, FinCEN notes that financial institutions, including VASPs, should be vigilant in identifying and reporting suspicious transactions associated with Hamas’s financing. Furthermore, reporting entities should „reference this alert by including the key term “FIN-2023-TFHAMAS” in SAR field 2 (Filing Institution Note to FinCEN) and the narrative to indicate a connection between the suspicious activity being reported and this alert“.