Could Hamas Make Palestine the Next Designated Terrorist State?

By Michael Kraft

If Hamas emerges as the winner or a major coalition partner from Wednesday�s Palestinian elections, a fledging Palestinian state runs the risk of being designated as a state sponsor of terrorism and losing U.S. economic assistance and investment.

Hamas already has been formally designated as a foreign terrorist organization (FTO) by the U.S. and other countries. A 1996 U.S. law makes it a criminal offense for American persons to knowingly provide funding or other forms of material support to a designated FTO. As Olivier Gutta noted in his post on Jan 21, Hamas leaders are still calling for the end of Israel and support the use of terrorism to achieve that goal.

Such a designation triggers a number of economic sanctions, including a ban on economic and military assistance, export controls over dual use equipment that could be used for military or terrorism activities as well as civilian activities. A designation also denies tax credits for American individuals and firms doing business in the designated country � an investment disincentive. The sanctions also require the U.S. to oppose loans from the World Bank and other international institutions. Such a designation could further damage the already battered Gaza and West Bank economies which are dependent upon foreign assistance.

It would not be an easy decision for U.S. policy makers, who are trying to support PA President Mahmoud Abbas against Hamas and other terrorist groups, such as the Palestine Islamic Jihad (PIJ) which took responsibility for last week�s suicide bombing in Tel Aviv. The Washington Post reported today http://www.washingtonpost.com/wp-dyn/content/article/2006/01/21/AR2006012101431_pf.html that Bush Administration is spending about $2 million on small projects or events designed specifically to bolster the faltering Palestinian Authority in Wednesday�s elections. This is a small part of the $400 million the U.S has provided for economic and infrastructure projects to assist Palestinians during the past year.

Although the Secretary of State (and the White House) have flexibility in deciding whether to put a country on the terrorism list, Congress laid out illustrative criteria in committee report language that accompanied the Anti-Terrorism and Arms Export Amendments Act of 1989 (Pub. Law 101-222.) That legislation modified the original 1979 Export Administration Act�s section 6 (j) that established the U.S. Government�s terrorism list and laid out procedures for adding or removing a country from the list.

The virtually identical 1989 House International Relations and Senate Foreign Relations committee report language said that the criteria should include, but not be limited to, whether the country provides to terrorists: sanctuary from extradition or prosecution; arms, explosives and other lethal substances; logistical support; safe houses or headquarters; planning, training or other assistance for terrorist activities; direct or indirect financial backing; and diplomatic facilities such as support or documentation intended to aid or abet terrorist activities.

The criteria of providing sanctuary from extradition or prosecution alone could be grounds for designation in view of the dismal track record of the PA in letting terrorist suspects go free�including those responsible for killing three U.S. security officials in Gaza during an ambush of their convoy in October, 2003.

Some observers speculate that if Hamas actually joins the government it might set aside its terrorist activities of bombing Israeli buses and restaurants and rocket attacks on Israeli towns near Gaza and instead concentrate on good governance. There is speculation that Hamas would want to focus on social services. These have been painfully neglected by the corrupt and inefficient Palestinian authority. Medical clinics and educational facilities have been a major recruiting tool for Hamas.

But if a new government with Hamas as a major player supports renewed terrorist attacks, either openly or covertly, it could undermine the financial support needed to improve the lot of ordinary Palestinians.

Even if it 'moderates' its position for short term political reasons, Hamas would be unacceptable so long as it continues to set as its goal wiping Israel off the map.

The State Department and White House may well be reluctant to formally add an eventual Palestinian state to the list of terrorist states (Iran, Syria, Libya, Sudan, North Korea and Cuba). The sanctions could have a sweeping impact and once a country is designated, it is not easy for it to get off the list unless it shows it has stopped its support for terrorism and gives convincing assurances that it will not support terrorism in the future.

And if Hamas-sponsored terrorist attacks resume, the Congress is likely to force the administration to put the Palestinian state on the terrorism list or impose an aid cut off on its own. Congress included in the FY 2006 Foreign Assistance Appropriations Bill a provision barring foreign aid to the Palestinian Authority. It included a �national interest� waiver clause. In the future, it might deny the President such authority.

In the end, it will depend upon the Palestinians themselves and whether the Hamas leadership will be more pragmatic about building up a new Palestinian state or passionate about killing Israelis in the vain hope of destroying the Israeli state.

I hope I�m wrong, but judging by the past in which the rejectionists repeatedly chose bombings over nation-building, there is little cause for optimism.

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