How drugs and diamonds fuelled Hezbollah’s network
The GCC and United States have Hezbollah’s senior leadership in the crosshairs with new sanctions against the Lebanese group’s top officials.
“By targeting Hezbollah’s Shura Council, our nations collectively rejected the false distinction between a socalled ‘political wing’ and Hezbollah’s global terrorist plotting,” US Treasury Secretary Steven Mnuchin said on Wednesday.
The sanctions target Hezbollah leader Hassan Nasrallah, his deputy Naim Qassem and four others.
The US Treasury previously sanctioned Mr Nasrallah for disrupting the Middle East peace process in 1995, and in 2012 over the group’s involvement in Syria.
Past investigations into Hezbollah financing have had far-reaching consequences. In the case of the now-defunct Lebanese Canadian Bank, the once one of Beirut’s major financial institutions folded and later forfeited US$102 million (Dh375m) in assets after it was blacklisted by US authorities for its part in what the latter said was a vast Hezbollah money-laundering network.
The investigation offered a rare glimpse into a secretive network linking Colombian cocaine cartels, West African conflict diamonds and North American usedcar dealers, through which Hezbollah-linked Lebanese businessmen worked around sanctions to bring assets from underworld sources into global financial systems.
In the past, Hezbollah was believed to have received up to $200m a year from Iran, but that amount diminished as Iran’s economy struggled under sanctions aimed at its nuclear programme. The militant group – which also maintains expensive social services – needed to diversify its funding sources.
A 2010 US Drug Enforcement Administration investigation found that Lebanese Canadian Bank (LCB) account holders were receiving the profits from smuggling South American cocaine to Europe. Expatriate Lebanese businessmen were then channelling those profits into other businesses, including buying used cars in North America to sell in West Africa and the purchase of rough diamonds.
After another Lebanese bank, Societe Generale de Banque au Liban, agreed to buy LCB’s assets in 2011, an audit uncovered up to 200 accounts involved in the money-laundering scheme, at the centre of which was Hezbollah.
In August 2012, the US seized $150m of the bank’s assets, with the bank later agreeing to a $102m settlement. While the case put businesses on notice that they dealt with Hezbollah at their own risk, some have questioned the efficacy of sanctions.
While there has been no official reaction by Hezbollah or Iran, an editorial in the pro-Hezbollah Al Akhbar newspaper on Thursday argued that the new sanctions were a politically motivated response to Hezbollah’s strong showing in Lebanon’s parliamentary elections.
“The sanctions imposed on the Hezbollah leadership will not affect their lives or their work, for the party operates outside the Lebanese and international banking system,” it said. “Therefore, the effect of these sanctions is political and nothing more and the target is not Hezbollah, but its partners in the next government.”