July 1, 2026 | Policy Brief
Gulf States Sanction Hezbollah, but Qatar Has a Flawed Record on Terror Finance Enforcement
July 1, 2026 | Policy Brief
Gulf States Sanction Hezbollah, but Qatar Has a Flawed Record on Terror Finance Enforcement
There may be a ceasefire in Lebanon, but Hezbollah’s pocketbook is still in the world’s sights. On June 30, the United States and members of the Gulf Cooperation Council (GCC) jointly imposed sanctions on Hezbollah’s financial infrastructure through the Terrorist Financing Targeting Center (TFTC). The targets include Al-Qard Al-Hassan (AQAH), a financial branch of Hezbollah, and Bayt al-Mal, which the U.S. Treasury described as the group’s “unofficial treasury,” as well as senior leaders of both organizations. The United States previously sanctioned all 31 entities and individuals targeted by the GCC.
The TFTC is a multilateral initiative co-chaired by the United States and Saudi Arabia with representatives from Bahrain, Kuwait, Oman, Qatar, and the United Arab Emirates. While the joint action signals good intentions, it is not a substitute for internal terror finance enforcement among GCC member states, like Qatar, that are lagging.
Combating Terror Finance Was a Priority During Trump’s First Term
The TFTC was created in May 2017 when the first Trump administration signed a bilateral counter-terror finance memorandum of understanding (MOU) with Saudi Arabia. President Donald Trump had been in office for less than six months, but countering terror finance was already emerging as a priority for his administration. “As we deny terrorist organizations control of territory and populations, we must also strip them of their access to funds,” Trump emphasized upon inaugurating the TFTC in Riyadh.
Qatar subsequently signed a similar MOU with the United States in July 2017 — one month after Saudi Arabia, the United Arab Emirates, Bahrain, and Egypt severed ties with Qatar, accusing Doha of “funding” extremist groups, among other transgressions.
Qatar’s Fight Against Terror Finance Lost Steam
After signing the 2017 MOU, Qatar took a series of steps that suggested follow-through, including placing more than two dozen individuals and entities on a terrorism blacklist and issuing a new law to improve its anti-money laundering and counter-terror financing efforts. Additionally, Washington and Doha took coordinated action in 2021 against eight targets connected to a “major Hezbollah financial network based in the Arabian Peninsula.” One of the entities designated was a property management company based in Qatar “owned and managed” by a known Hezbollah financier.
Despite this progress, Qatar’s efforts have stalled. The Financial Action Task Force (FATF), an international money-laundering and terror-finance watchdog, last assessed Qatar in 2023. In its report, FATF maintained that Doha had “not demonstrated that it is effectively identifying, investigating, or prosecuting” terror financing cases, noting that authorities hadn’t convicted a single terror financier since 2018.
Conversely, FATF assessed Saudi Arabia in 2018 and found that terrorist financing “investigations are routinely carried out … leading to an exceptional number of investigations and convictions.” FATF upgraded Saudi Arabia’s terror-finance sanctions rating in 2020 from “partially compliant” to “largely compliant.”
Congressional Oversight Is Due
Maximum pressure on Iran and its proxies has largely defined the second Trump administration’s counter-terror finance efforts. However, the recent TFTC designations can kickstart renewed efforts with America’s GCC partners, leveraging the momentum Trump built during his first term.
The text of the 2017 U.S.-Qatar MOU is not public, but then-Secretary of State Rex Tillerson explained that the agreement “specifies the steps each country will take to stop terrorism financing globally and sets a timeline for its implementation.” Nearly a decade has passed, and there’s reason to suspect that Qatar’s progress has stalled — or that Doha failed to meet certain benchmarks altogether. In October 2023, for example, the U.S. Treasury Department sanctioned a “Qatar-based financial facilitator” who “was involved in the transfer of tens of millions of dollars to Hamas.”
As the second Trump administration continues to deepen its partnership with Qatar, Washington should bring Doha into line with existing expectations. Members of Congress can request that the U.S. Government Accountability Office review Qatar’s progress implementing the 2017 MOU and assess overall enforcement of the agreement.
Natalie Ecanow is a senior research analyst at the Foundation for Defense of Democracies (FDD). For more analysis from Natalie and FDD, please subscribe HERE. Follow Natalie on X @NatalieEcanow. Follow FDD on X @FDD. FDD is a Washington, DC-based, nonpartisan research institute focusing on foreign policy and national security.