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Monday, June 28, 2010     FOR YOUR EYES ONLY

Hamas raids two Arab Bank branches in Gaza, confiscates funds

GAZA CITY — The leading bank in the Gaza Strip has been shutting down its branches.

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The Arab Bank, the largest in the Arab world, has shut down two of its three branches in the Gaza Strip. The bank, with headquarters in Gaza City, was expected to close its doors over the next few weeks.

"We can no long operate in a stable environment," a bank executive said.


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The Arab Bank has been the target of a series of Hamas raids in 2010. Hamas plainclothes officers have stormed bank branches and stolen nearly $1 million.

On June 27, the Palestine Islamic Bank in Gaza City suspended operations after Hamas raided the financial institution and grabbed $16,000, Middle East Newsline reported. The money was said to have been deposited in the account of the Educational Teaching Society, frozen by the bank several days earlier.

"There was a court order to unfreeze these funds," an official said.

This marked the third Hamas raid of Palestinian banks in the Gaza Strip during 2010. Several months earlier, the Bank of Palestine was attacked by Hamas troops, who made off with $280,000 from a deposit held by a Hamas-dominated charity.

Hamas has been under sanctions from both the European Union and United States. The sanctions ban any bank transfers to the Hamas regime in the Gaza Strip, which has been struggling to pay its more than 30,000 civil servants for much of 2010.

In May, Palestinian gunmen entered the Arab Bank and demanded $400,000 in tax proceeds destined for the Palestinian Authority, expelled by Hamas in 2007. The Arab Bank, with 500 branches in 30 countries, was identified as one of the last financial institutions that operated under international standards.

The Arab Bank, the second largest financial institution in the Gaza Strip, has already dismissed hundreds of employees and closed two branches. Executives said the Hamas raids have jeopardized the banking system.

"Unfortunately, the situation in Gaza does not allow us to function at the level to which we are committed, and therefore the bank's operations will cease until proper working conditions are made available," the Arab Bank said.



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