Consortium Against Terrorist Finance Aug. 5, 2015, 11:25am

In recent weeks President Obama has tried to make the case for the Iranian nuclear agreement to a skeptical American public and a confrontational Congress. Meanwhile, media pundits and candidates on the campaign trail have debated the consequences of a deal. Apart from obvious proliferation concerns, opponents of the deal worry that the easing of financial sanctions resulting from the agreement will open floodgates of funding to Iran’s destabilizing proxy organizations in the region, including Hezbollah, long ago recognized by the United States as a terrorist organization. Although the announcement was lost in the din of the nuclear debate, the Obama administration took steps to address these concerns earlier this month when the Treasury Department designated as terrorists several individuals with ties to Hezbollah. The announcement—part of a larger pattern of recent designations—demonstrates an effort by the United States to limit the flow of funds from Iran’s anticipated windfall to terrorists.

On July 21st, the Treasury Department imposed sanctions on three key Hezbollah leaders as well as a Lebanese business associate, all of whom are accused of providing material support to the al-Assad regime in Syria. The three leaders designated were Mustafa Badr Al Din, head of Hezbollah military operations in Syria and a close advisor to Hezbollah leader Hassan Nasrallah, as well as Ibrahim Aqil and Fu'ad Shukr, both members of Hezbollah's highest military body, the Jihad Council. The Lebanese businessman, Abd Al Nur Shalan, is accused of being a longtime arms dealer for Hezbollah, and for supplying weapons to the organization’s associates in Syria. The Treasury announcement also alleges that in 2010 Shalan acquired “a number of tons of anhydride, used in the production of explosives and narcotics, for use by Hizballah.”

The announcement follows another set of designations in June targeting three individuals and four companies accused of providing support to Hezbollah. Treasury described those designations as “[underscoring] the direct ties between Hizballah’s commercial and terrorist activities, as well as the group’s continued exploitation of the legitimate commercial sector for financial, organizational, and material support – from vehicles to investment and construction services – which enable the group to carry out acts of terrorism.”  The Treasury Department has previously designated other Hezbollah leaders, as well as supporters and financial facilitators in Venezuela and West Africa, resulting in the freezing of any of their assets in the United States or controlled by US entities, and prohibiting US persons from engaging in transactions with them.

Most Americans and the mainstream media—focused on Al-Qaeda for the last fifteen years and, more recently, the atrocities committed by the Islamic State—do not know what US investigators and counterterrorism analysts have known for years: Hezbollah, in the words of then-CIA Director George Tenet in 2003, “is [al-Qaeda's] equal, if not a far more capable organization.” Indeed, shortly after 9/11, FBI officials testified that Hezbollah had the means and capability to wage terror attacks in the United States if they desired to do so.  Even in the absence of Iran’s significant financial support, which suffered under recent sanctions, Hezbollah has been able to fund its global reach through what one expert calls, “one of the largest and most sophisticated global criminal operations in the world.” 

Hezbollah’s criminal enterprise stretches from Lebanon to West Africa, the European Union, South America and even the United States, and is designed to make, move, and launder large amounts of money. Documented criminal activities have included counterfeiting currency, narcotics and weapons trafficking, cigarette smuggling, and identity theft.  Hezbollah associates have devised a number of money-laundering schemes to funnel funds from these illicit activities back to Lebanon over the years, most notably through the resale of American used cars in Africa.

This criminal enterprise has sustained Hezbollah in the face of the global sanctions regime that has crippled Iran’s economy. The nuclear deal paves the way to ease these sanctions. Some analysts fear that—beyond the resumption of trade and an estimated $100 billion in frozen assets, a portion of which could be funneled once again to terrorists—it is Iran’s reintegration into the global banking system that will benefit terrorists most. Since 2012, fifteen Iranian banks have been shut out from the international SWIFT banking system, making it all but impossible to wire funds overseas. 

The recent terrorist designations, announced during final negotiations and on the heels of the announcement of a deal, shows that the administration is cognizant of these risks and is replacing blanket sanctions with a targeted effort to disrupt Hezbollah’s sophisticated global network of criminals, terrorists, terrorist financiers and front companies.

More News