A Hamas finance expert alleges that UN agencies’ cash assistance to Gazans is indirectly benefiting the terror group, as Hamas and its allies allegedly control the flow of money within the region.

Eyal Ofer stated that Hamas leverages its position in Gaza to gain financially from aid distributed to civilians through mobile payment applications.

Ofer claims Hamas manipulates the aid system by working behind the scenes through merchants, crime syndicates, and a covert banking network.

International organizations inject significant funds into Gaza each month. The UN’s World Food Programme (WFP) provides approximately $18.43 million to 82,636 families, averaging $209 per family, according to public data. UNICEF contributes an average of $5 million monthly, assisting at least 20,000 families.

Shahab Yousef, a Gaza resident, reported having to pay a 20-30% fee to exchange digital aid money for cash. “If I transfer 1,000 shekels [$271] I get back 700 [$190],” he said, noting that while digital payments work for larger purchases, cash is needed at the market, incurring a loss each time.

Nidal Qawasmeh, another Gaza resident, echoed the sentiment, complaining about the high fees charged to access cash. “These people are charging 30 percent just to give you cash. I just want to take care of my family, but everything costs me more because of this. Prices are insane.”

UNICEF reported the average family receives about $270 (or 1,000 New Israeli Shekels) monthly, which is 80% of the Survival Minimum Expenditure Basket. Other organizations, like UNFPA, add to the total, bringing the monthly aid to approximately $39.66 million, reaching 60% of Gaza’s households, according to open-data sources.

Despite the extensive aid reaching over half of Gaza’s population, severe food insecurity and high inflation (91% and 118%, respectively, as of January 2024) persist. Ofer stated that individuals receiving aid via mobile apps must convert it to cash for use in local markets, incurring substantial fees often benefiting Hamas or its affiliates.

TPS-IL reported that Israeli Foreign Minister Gideon Sa’ar has warned that Hamas’s economic strength in Gaza is based on billions of shekels in cash acquired through salaries and reclaimed via merchant taxes. Sa’ar requested the Bank of Israel to halt the circulation of 200-shekel bills in Gaza, believing it would severely weaken Hamas’s financial infrastructure. However, the Bank of Israel denied the request due to technical challenges.

Ofer’s research indicated conversion fees ranging from 20% to 35%, significantly reducing the value of aid received. “In , you can see traders refusing to accept app funds and forcing customers to convert them into cash, knowing they will lose at least 20% in the process,” he said.

Peter Gallo, an international lawyer and former U.N. investigator, suggested that aid agencies should have been aware of the issue. He described the fees as “extortion” or a “revolutionary tax,” adding that agencies might argue it was the cost of operating in Gaza, but should have been transparent about it.

A UNICEF spokesperson acknowledged the cash shortage in Gaza due to the disrupted banking system.

The spokesperson noted that UNICEF introduced fully digital cash payments via e-wallets in May 2024, removing the need for physical cash transactions. Recipients can now use e-wallets to purchase essential goods without handling cash.

The spokesperson explained that these digital e-wallets can be accessed through a smartphone app and eliminate the need for cash conversion fees. They asserted that the program maintains neutrality and impartiality, preventing external influence over its design or implementation.

The spokesperson stated that extreme food insecurity affects over 1.8 million Gazans, especially children, and that acute malnutrition is increasing rapidly. They maintained that UNICEF’s $5 million monthly cash transfer program supports approximately 20,000 families and is too small to significantly impact the local economy.

The World Food Programme did not respond to requests for comment.

Gallo emphasized that ignoring the situation is unacceptable, given that the U.N. Security Council has addressed terrorist financing since 2001, yet aid agencies continue to overlook Hamas profiting from the money flow despite efforts to stop terrorist financing.

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