OFAC Sanctions Uncover Global Charity Fronts Funding Terrorist Networks

In a bold step to disrupt terrorist financing networks, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned a series of international charities and individuals accused of funneling millions to Hamas and the Popular Front for the Liberation of Palestine (PFLP). The June 10, 2025 announcement marks a significant intensification of U.S. efforts to combat the abuse of humanitarian organizations for terrorist purposes, as global regulators respond to increasingly complex threats in the financial system.

The recent sanctions target five individuals and five nonprofit organizations operating under the guise of humanitarian assistance, which OFAC states were “direct supporters of Hamas’s Military Wing and, in some cases, the PFLP.” These entities span Gaza, Türkiye, Algeria, the Netherlands, Italy, and the West Bank. According to the U.S. Treasury, each was either operated by, controlled by, or materially supporting organizations already sanctioned under Executive Order 13224. This order provides U.S. authorities broad powers to designate terrorist affiliates and freeze their assets, making it a cornerstone of the American counterterrorism toolkit.

Charities named in the latest action include the Al Weam Charitable Society in Gaza, Filistin Vakfi in Türkiye, El Baraka Association in Algeria, the Israa Charitable Foundation Netherlands, and Italy’s La Cupola d’Oro. All were cited for operating as financial conduits for militant groups. OFAC asserts that some of these organizations were directly staffed by operatives linked to Hamas and the PFLP, while others employed more elaborate money laundering schemes that spanned several jurisdictions and financial systems. In OFAC’s words, these groups “exploited the guise of charitable giving to divert money to violence.”

This new wave of designations is not an isolated event. It reflects an expanding international trend toward collaboration in counterterrorism finance, building on joint actions previously undertaken by the United States, the United Kingdom, and Australia. The coordinated strategy underscores the global scope of the issue and the importance of multilateral sanctions in impairing terrorist access to financial infrastructure.

These efforts come on the heels of the 2024 National Terrorist Financing Risk Assessment, which highlighted the vulnerability of the nonprofit sector to exploitation. According to the report, “Sham charities remain a favored tool for terrorist groups to obscure the movement of funds across borders.” With humanitarian aid structures frequently serving as cover, these entities manage to attract funds from both legitimate donors and those complicit in illicit finance. OFAC’s latest move aims to sever this abuse at its root.

Behind these charitable façades lies a sophisticated machinery of deception. Entities implicated in the OFAC designations often issued legitimate-looking documentation, funneled donations through seemingly reputable banking institutions, and relied on the emotional gravity of humanitarian crises to evade suspicion. However, as Treasury officials noted, “Funds destined for aid were consistently diverted to militant activities.”

The sanctions have brought renewed attention to the challenges facing anti-money laundering (AML) compliance teams. Financial institutions are often the unwitting intermediaries in these schemes. The organizations in question maintained official nonprofit registration in their home countries, yet, as investigations revealed, many were operated by individuals with established ties to terrorism. OFAC determined that “shell companies, false invoices, and circuitous financial transfers” were standard tools used to mask fund movements.

The risk to financial institutions is considerable. Banks operating within or in connection with the U.S. must immediately freeze assets and cease dealings with sanctioned entities or face significant penalties. OFAC makes clear that “U.S. persons and institutions are broadly prohibited from engaging in any transactions involving the designated parties.” Violations can trigger steep fines and even criminal liability.

The legal foundation for this enforcement push rests not only on Executive Order 13224 but also on broader frameworks such as the USA PATRIOT Act and the International Emergency Economic Powers Act (IEEPA). These laws, supplemented by guidance from the Financial Crimes Enforcement Network (FinCEN), mandate robust compliance programs that include enhanced due diligence and proactive suspicious activity reporting.

On a global scale, the Financial Action Task Force (FATF) continues to play a central role. Its Recommendation 8 addresses the nonprofit sector explicitly, calling for a risk-based approach to mitigate abuse. FATF emphasizes that governments must “identify, assess, and understand the risk of terrorist abuse in the nonprofit sector” and implement “appropriate measures to address those risks.”

For AML professionals, OFAC’s designations underscore a series of critical compliance imperatives. First, financial institutions must perform enhanced scrutiny on all nonprofit customers, especially those involved in cross-border activity or based in high-risk regions. Second, ongoing screening of clients and beneficiaries against OFAC and international sanctions lists is essential. Institutions should maintain automated systems that update in real-time and flag new designations for immediate action.

Third, due diligence must extend beyond the surface. OFAC warns that “ownership structures can be layered and intentionally opaque,” making it necessary to investigate beneficial ownership and control relationships. Fronts and proxies are frequently used to distance sanctioned individuals from the financial entities that support them.

Additionally, the complexity of these schemes demands the use of advanced technology. Artificial intelligence, machine learning, and network analysis tools can expose hidden relationships, identify anomalies in transaction flows, and surface patterns suggestive of criminal intent. For example, OFAC noted that several sanctioned organizations “relied on financial layering and informal value transfer systems to mask the origin of funds.”

Equally important is cross-border collaboration. International cooperation remains key to tracing funds and enforcing sanctions. Programs like the UK’s Joint Money Laundering Intelligence Taskforce (JMLIT) and FinCEN’s 314(b) program facilitate information sharing between the public and private sectors, reducing intelligence gaps that terrorists have historically exploited.

The implications of this crackdown extend well beyond the immediate seizure of assets. By naming and shaming the actors involved, OFAC intends to send a clear message: charitable status will not shield those who support terrorism. The public designations act as both deterrent and signal to the wider global financial system to be alert. “Exposing these groups undermines their credibility and disrupts their fundraising capacity,” OFAC said.

Donors, regulators, and financial institutions are now being urged to apply greater scrutiny to humanitarian organizations. This includes not only verifying the legitimacy of stated missions but also auditing financial flows, examining board memberships, and reviewing governance structures for signs of abuse. Regulators expect nonprofit organizations to operate with increased transparency and accountability to maintain public trust.

From a policy standpoint, the latest sanctions reinforce the urgent need for tailored AML controls within the charitable sector. These include sector-specific risk assessments, context-sensitive monitoring of donations, and robust escalation protocols for red flags. According to Treasury officials, “It is imperative that legitimate charities not be allowed to be hijacked by militants.”

Terrorist groups have consistently shown their ability to adapt, often shifting operations to new jurisdictions, turning to alternative currencies, or capitalizing on emerging humanitarian crises. It is therefore incumbent upon the AML community to remain nimble, informed, and proactive in countering such threats.

As OFAC’s latest sanctions make clear, the exploitation of the charitable sector for terrorism financing constitutes both a profound humanitarian betrayal and a pressing national security risk. By freezing assets, targeting key actors, and enhancing intergovernmental cooperation, the U.S. and its allies are aiming to disrupt these illicit networks and set the tone for future enforcement. “There is no sanctuary for those who fund violence under the cover of aid,” an OFAC spokesperson said. That message, it seems, has now been delivered loud and clear.

By fLEXI tEAM