U.S. Senate bill would expand sanctions against terrorist organizations like Hamas

The Terrorism Financing Prevention Act will expand the type of sanctions to cover all U.S.-designated Foreign Terrorist Organizations (FTOs), including Hamas, and other foreign parties that are controlled by or act on behalf of FTOs.

The passage of the Hizballah International Financing Prevention Act in 2015 imposed sanctions only in limited circumstances and primarily on the terrorist group Hezbollah.

U.S. Sens. Mark R. Warner of Virginia, Mike Rounds of South Dakota, Jack Reed of Rhode Island and Mitt Romney of Utah introduced the bipartisan legislation last week to crack down on terrorist organizations like Hamas by applying sanctions to foreign parties that facilitate financial transactions with terrorists.

 “The Terrorism Financing Prevention Act will make sure that the Treasury Department has the tools necessary to enforce our sanctions against Hamas and other terror groups,” Warner said. “I’m pleased to join Senators Rounds, Reed, and Romney in introducing this bipartisan legislation to improve our national security.”  

Under the bill’s terms, the U.S. Department of the Treasury is required to identify any foreign bank or foreign digital asset transaction facilitator that knowingly facilitates transactions with an FTO or related party. Once identified, the bill requires imposition of sanctions on the FTO or party, restricting either their use of U.S. correspondent bank accounts (in the case of a bank), or barring their digital asset or other transactions with U.S. persons (in the case of a digital asset transaction facilitator).

“It is critical that the Department of the Treasury has the necessary counter-terrorism tools to combat modern threats,” Rounds said. “The Terrorism Financing Prevention Act takes commonsense steps toward rooting out terrorism by sanctioning foreign financial institutions and foreign digital asset companies that assist them in committing these heinous acts. Cutting off funding for terrorist organizations at the source will save lives. I am pleased to co-lead this bipartisan legislation that takes decisive action to disrupt terrorist finance networks.”

The bill also contains a key provision from the Crypto-Asset National Security Enhancement and Enforcement (CANSEE) Act the senators previously introduced, giving FinCEN authority to restrict transactions with “primary money laundering concerns” that do not involve a U.S. correspondent bank account.  The provision will provide FinCEN with appropriate tools to address threats involving digital assets and non-traditional finance networks, just as they currently can where correspondent accounts are involved.

 “It is critical to bolster the Treasury Department’s tools to protect our national and economic security. With this bill, we are forcing foreign financial institutions and foreign crypto firms to choose between doing business with terrorist organizations or maintaining access to the U.S. financial system,” Reed said. “We must protect the integrity of our financial system from new and emerging threats from terrorist organizations, including Hamas that carried out the despicable attacks on Israel on October 7.”

The Terrorism Financing Prevention Act also authorizes the resources the Treasury Department needs to carry out the programs.

“The October 7 attacks on Israel perpetrated by Hamas have made it more urgent and necessary for the U.S. to counter the role that cryptocurrency plays in the financing of terrorism. Our legislation would expand financial sanctions to cover all terrorist organizations — including Hamas — and it would equip the Treasury Department with additional resources to counter terrorism and address emerging threats involving digital assets,” Romney said.