Under the Radar: Hezbollah and Iran find new strength in Latin America 0 by Jesse McDonald December 30, 2017

In the United States’ backyard, terrorists groups originating from the Middle East are increasingly cooperating with local criminal elements and drug cartels. What are Middle Eastern networks doing in faraway Latin America?

Pay attention to your neighbours

One might not immediately associate Hezbollah and Iran with Latin America. Nevertheless, both have been active there since the 1980s – taking advantage of corrupt governments, porous borders and occasionally collaborating with certain administrations particularly ripe with anti-American sentiment. Hezbollah, with Iran’s guidance, has used the region as a marketplace, selling drugs and laundering money back to Lebanon. Such activities pose serious risks and demand renewed international attention.

Overall, Latin America, Central America, and the Caribbean offer Iran and Hezbollah fertile territory to build relations, bolster economic development and spread their ideology. Their efforts are made easier by governments such as Bolivia, Nicaragua, and Ecuador, whose hostility to U.S. interests manifest as non-cooperation on U.S. counterterror and defense partnerships. The Iranian regime also associates with the Bolivarian Alliance of the Countries of Our America (ALBA), a group created by Fidel Castro and Hugo Chavez, which resists the United States through political and economic means.

What is perhaps the most worrisome tactic of Iran and Hezbollah is the use of seemingly innocuous acts of diplomacy to obscure drug smuggling and money laundering. According to the U.S. government, Iran has relied on Latin America to evade sanctions by signing economic and security agreements in order to create a network of diplomatic and economic relationships.

To further reinforce these strategic alliances, Iranian Foreign Minister Mohammad Javad Zarif embarked on a six-nation tour of Latin America stopping at Cuba, then Nicaragua, Ecuador, Chile, Bolivia and Venezuela in August 2016. Moreover, Mahmoud Ahmadinejad made six trips to the region between 2005-2012 to forge and strengthen relationships. This kind of focused diplomacy undercuts much of U.S. efforts to counter Iran’s nuclear program, as the United States’s leverage relies on international consensus and support to do so.

Venezuela opens its doors to Iran and Hezbollah

Among all of Iran and Hezbollah’s allies in Latin America, Venezuela is perhaps the most important. But how exactly does Venezuela help Iran? Granting Iranian military firms large tracts of isolated land to develop missile technology is a major way Venezuela acts as a strategic ally. Iran’s Parchin Chemical Industries, sanctioned by the U.S. (as well as EU and UN), set up facilities in Venezuela to do just that.

In addition, support for Iran and Hezbollah comes from the highest echelons of Venezuela’s government. Venezuela’s Vice President, Tareck El Aissami for instance, has been accused (amongst other allegations) of money laundering and drug trafficking. As a result, in February, 2017 he was sanctioned by the U.S. Treasury Department as a Specially Designated Narcotics Trafficker.

By examining Mr. El Aissami more closely, further proof of Venezuela’s support for Iran and Hezbollah come to light. Mr. El Aissami, who at one time headed Onidex, the Venezuelan passport and naturalization agency, is suspected of having issued passports to members of Hamas and Hezbollah. This means members of the two organizations, as well as drug lords from narco-terror groups such as FARC, not only coordinate and work together, but also are awarded state sponsorship from the highest levels of government.

Joseph Humire, founder of the Center for a Secure Free Society (SFS), testified before the House Committee on Foreign Affairs that El Aissami has developed a sophisticated, multi-layered financial network which functions as a criminal-terrorist pipeline that brings militant Islamists into Venezuela and surrounding countries and sends illicit funds and drugs from Latin America to the Middle East. The U.S. government also believes that El Aissami and the Venezuelan government also issued passports which could have been used for entrance into the United States.

Tri-Border Area: Latin America’s Wild West

A region of special concern in Latin America is the lawless area bordering Paraguay, Brazil and Argentina. This territory has been identified by the U.S. as a hotspot for money launderers and is yet another area Hezbollah and Iranian operatives use to raise funds. Eastern Paraguay’s Ciudad del Este, meaning “City of the East,” is the de-facto capital of this Tri-Border Area (TBA). TBA might seem like a far-flung region with little relation to the fertile valleys in Lebanon, but Lebanese comprise the overwhelming percentage of Arabs in Latin America. In fact, Latin America has the largest Arab population outside the Middle East, due to many fleeing wars and unrest during the late 19th and 20th centuries.

Identifying the TBA as an area of concern is nothing new. Allegations that Hezbollah has ties to criminals operating in the tri-border region date back to at least 2006, when the U.S. Treasury Department identified nine individuals in the area accused of providing Hezbollah with financial and logistical support.

Assad Ahmad Barakat, a Specially Designated Global Terrorist (SDGT), was appointed by Hezbollah’s leadership to run the the organization’s activities in the TBA. Several of his brothers also operate there and raise funds for the group by trafficking narcotics, counterfeit U.S. dollars, arms and explosives. It has been estimated that Hezbollah cumulatively nets some $20 million annually from the TBA alone, though other estimates put the figure higher.

In addition to drug peddling, Hezbollah and Iran are able to partially bypass U.S. sanctions by taking advantage of a scheme known as ‘nesting’. Nesting refers to when a foreign financial institution gains access to the U.S. financial system by operating through a U.S. correspondent account belonging to another foreign financial institution. In other words, countries and individuals can avoid sanctions by establishing relationships with banks from other nations who have legal access to the U.S. financial system. The U.S. bank is often unaware that its foreign correspondent customer is providing such access to a sanctioned third-party and despite increased regulation, efforts to detect criminal and terrorist abuse of banks remain limited.

Efforts to fight back

The prevalence of Hezbollah and Iran’s criminal networks and the risks they pose have not flown under the United States’s radar; there have been a variety of reports by the State Department and Department of Defense which acknowledge and condemn these illicit networks. One particular example of the United States taking more concrete action occurred in February 2016 in what came to be known as Operation Cassandra.

Operation Cassandra involved seven countries and uncovered an intricate network of money couriers who collected and transported millions of euros in drug proceeds from Europe to the Middle East. Further, the United States Drug Enforcement Administration (DEA) announced arrests targeting Hezbollah’s External Security Organization Business Affairs Component (BAC). The BAC is involved in international criminal activities such as drug trafficking and money laundering. The proceeds from the BAC’s activities were used to purchase weapons for Hezbollah to finance its activities in Syria.

Despite warnings from U.S. generals, diplomats, and academics, Iran and Hezbollah continue to expand their influence in Latin America. With so much unfolding in the Middle East, it is understandable why international attention has not been devoted to these issues. However, there is too much at stake to ignore the potential threats growing in the United States’s backyard. Whether Iran and Hezbollah use the region to circumvent sanctions, traffic drugs, launder money or plan future attacks, there is a real and growing threat.