SOUTH AFRICAN BANKS FACE INTERNATIONAL SANCTIONS THREATS FOR DOING BUSINESS WITH HAMAS' LOCAL SUPPORT NETWORK AND POLITICAL AFFILIATES

South African financial institutions, especially those that conduct international banking for clients, are at risk for American and other sanctions, and even at an existential level, if they maintain direct, or even indirect, financial relationships with the entities that provide financial support to Hamas. The pro-Hamas policies of the ANC, the local Hamas affiliates, such as AL-QUDS FOUNDATION SA ( linked to the Beirut-based patent entity), and a number of organizations, nonprofits and NGOs that appear to provide material support to Hamas, a sanctioned terrorist group in the US, UK and EU, among other nations, represent a potential threat of Western sanctions upon any SA bank that supplies financial services to those entities.

Given South Africa's existing international trade with the U.S., the UK and the Members of the EU, there is a significant chance that sanctions could be imposed upon a specific SA bank, causing problems with the ability to pay for international trade, international payments, and even, in the case of an OFAC action, blocking all financial commerce. Such an action could render the local bank unable to compete in the marketplace, due to international servicing issues, and even cause it to close.

Compliance officers at South African banks must therefore maintain a high degree of vigilance, to alert their leadership if any new account opening, or transaction which could be interpreted as providing material financial support to a terrorist organization, even indirectly through a third party linked to Hamas, to protect against potential grounds for sanctions imposed from abroad, from a major trading partner of the bank's customers. Current information on all known possible Hamas affiliates operating in South Africa must be maintained, and compliance required to use every effort to avoid any contact, for the bank's protection and financial safety. This is one topic where effective gatekeeping by compliance is most important.