User Rating: 5 / 5

Star ActiveStar ActiveStar ActiveStar ActiveStar Active

The Republic of Chile has the largest number of Palestinians, and individuals descended from Palestinian immigrants, outside of the Middle East. Conservative estimates range from 500,000 to 700,000. Many Chilean Palestinians are rabid supporters of Hamas, and this poses a serious problem for compliance officers at financial institutions located in North America, due to potential terrorist financing & funding issues, due to the serious civil penalties that are imposed for violations.

Ordinarily, we regard Chile as low threat, for Country Risk purposes. It is neither a drug producing, nor drug transit, country, and it is not a major money laundering destination, though I am aware that the free trade zones have been used as such, in the past.  It has a powerful business sector, and enjoys a close economic relationship with the United States.

The problem is that Chileans of Palestinian descent identify with Hamas, notwithstanding its status as a Specially Designated Global Terrorist (SDGT) organization. Palestinian organizations located in Chile repeatedly seek to interfere with trade between Israel and Chile; the recently sought to interfere with a visit, to Santiago, the capital, by two members of Israel's Knesset, the country's Parliament. Much of the anti-Israel agitation comes from local Palestinian NGOs.

These Palestinian organizations, which include the Palestinian Federation of Chile, the General Union of Palestinian Students, the Bethlehem Foundation, and the Palestinian Social Club, are well funded, as many descendants of the original immigrants have created successful businesses. They are not known to seek funding from the Middle East.

Most of the Chilean Palestinians are not Muslim, but Christian; their ancestors fled Muslim abuse and violence, as well as conscription into the Turkish Ottoman Army.  They should have no fond memories of their original family experiences, but they have apparently created a fantasy about where they came from, and now throw in their lot with the worst that Palestine has to offer - Hamas. Someone should tell them that Hamas has a history of abusing Christians in Gaza.

Therefore, you can expect many affluent Chileans of Palestinian descent to provide material support to Hamas, and those donations expose international banks, that handle funds from Chile, to possible terrorist financing risks. It is prudent for compliance officers to consider those risks, when accepting wire transfers whose ultimate destination might be Hamas, or to pay for goods and services that would benefit Hamas. If your bank clients engage in trade with Chile, or you have wealthy Chilean customers, keep the risk of terrorist financing in mind, when conducting due diligence.