Iran, a major ally and enabler of the Syrian regime, is increasingly engaged in competition over access to the Syrian economy now that there are new opportunities for lucrative reconstruction contracts. This report sheds light on the economic role played by Iran in Syria through its local representatives and Iranian businessmen. It also explores the (limited) impact of the European Union and U.S. Treasury sanctions on Iran's economic instruments in Syria.
Iran has invested heavily in the protection of the Syrian regime and the recovery of its territories. Iran’s main objectives in Syria have been to secure a land bridge between its territory and Lebanon, and to maintain a friendly regime in Damascus. Much of Iran’s investment has been military, as it has financed, trained, and equipped tens of thousands of Shi’a militants in the Syrian conflict. But Iran has also made major financial and economic interventions in Syria: it has extended two credit lines worth a total of USD 4.6 billion, provided most of the country's needs for refined oil products, and sent many tons of commodities and non-lethal equipment, notwithstanding the international sanctions imposed on the regime. In exchange for its commitment to ensuring Assad’s survival, Tehran has expected and demanded large concessions in terms of access to the Syrian economy, especially in the energy, trade, and telecommunications sectors.
Iran has provided crucial economic assistance to the Assad regime in order to prevent its fall and to ensure that it can meet its fuel needs. In return, Iran demanded access to significant investment opportunities in key sectors of the Syrian economy, notably: state property, transportation, telecommunications, energy, construction, agriculture, and food security.
Since 2013, the Iranians have aided Assad through two main channels. First, it extended two lines of credit for the import of fuel and other commodities, with a cumulative value of over USD 4.6 billion. In order to position itself strategically as the lynchpin of the Syrian economy, Iran restricted the benefactors and implementers of these credit lines to its own national companies. It can thus continue to provide the regime with a lifeline in terms of goods and energy supplies, but in return it can control key parts of the Syrian economy.
The following list includes major Iranian companies that have announced a return to business-as-usual in Syria. Each brief overview gives a description of the company’s involvement in Syria, followed by basic information about the company.
Has demonstrated an interest in carrying out reconstruction work on Syria infrastructure.
Khatam al-Anbia Construction Base is involved in construction projects for Iran's ballistic missile and nuclear programs. It is listed by the UN as an entity of the Iranian Revolutionary Guard Corps (IRGC), with a role “in Iran's proliferation-sensitive nuclear activities and the development of nuclear weapon delivery systems” (Annex to U.N. Security Council Resolution 1929, June 9, 2010). The company is under the command of Brigadier General Ebadollah Abdollahi.
Khatam al-Anbia conducts civil engineering activities, including road and dam construction and the manufacture of pipelines to transport water, oil, and gas. It is also involved in mining operations, agriculture, and telecommunications. Its main clients include the Ministry of Energy, Ministry of Oil, Ministry of Roads and Transportation, and Ministry of Defense.
Since the company’s founding in 1990 it has designed and implemented approximately 2,500 projects at the provincial and national levels in Iran. It currently works with 5,000 implementing partners from the private sector. An IRGC official recently revealed that a total of 170,000 people currently work on Khatam al-Anbia’s projects and that in the past 2.5 years it has recruited 3,700 graduates from Iran’s leading universities.
Company officials for Khatam al-Anbia include IRGC General Rostam Qasemi and Deputy Commander Parviz Fatah. Other personnel reportedly include Abolqasem Mozafari-Shams and Ershad Niya.
MAPNA is a group of Iranian companies that build and develop thermal power plants, as well as oil and gas installations. The group is also involved in railway transportation, manufacturing gas and steam turbines, electrical generators, turbine blades, boilers, gas compressors, locomotives, and other related products. The Iran Power Plant Projects Management Company (MAPNA) was founded in 1993 by the Iranian Ministry of Energy. Since 2012, the group has been led by Abbas Aliabadi, former Iranian Deputy Minister of Energy in Electricity and Energy Affairs.
In 2015, MAPNA sealed a USD 2.5 billion contract, Iran’s largest engineering deal to date, to supply Iranian technical and engineering services for the construction of a power station in Basra in southern Iraq.
A contract to build Syria’s third mobile network (suspended).
MCI is a subsidiary of the Telecommunication Company of Iran (TCI), which is partially owned by the IRGC. MCI brings in approximately 70 percent of TCI’s profits. MCI provides mobile services for over 1,000 cities in Iran and has approximately 66 million Iranian subscribers. It provides roaming services through partner operators in more than 112 countries.
Table 1: List of all Iranian companies with ongoing contracts in Syria - 2019
|Name||Arabic Name||Main Activity||Agreement||Headquarters Address|
|Safir Noor Jannat||سفير نور جنات||Food industries, detergents, and electronics||An old MOU dating back to 2015 to supply Syria with flour||No. 8, Mohamadzadeh st., Fat-h- highway 4Km. Tehran|
|Behin Gostar Parsian||بهين كستر بارسيان||Food industries||No information||Unit 5. No 14. Shahid Gomnam Street. Fatemi Sq. Tehran|
Peimann Khotoot Gostar Company
جزء من مجموعة PARSIAN GROUP
|بيهين غوستار بارسيان||Electrical power, electronics, and technology||2017 MOU with the batteries companies in Aleppo, the General Company for Metallurgical Industries in Barada, and Sironix, to carry out electricity projects in several locations in Syria.||Tehran Province, Tehran, District 22, No: 5, Kaj Blvd, 14947 35511, Iran|
|Feridolin Industrial & Manufacturing Company||شركة فريدولين||Electrical appliances||No information||-----|
|Tadjhizate Madaress Iran. T.M.I. Co.||----||Decor and furnishings||No information||No. 198, Dr. Beheshti St., After Sohrevardi Cross Rd., 157783611, Tehran, Iran, Tehran|
|Trans Boost||ترانس بوست||Electricity||Electrical transformer station (230 66 20 kV) in the Salameh, Hama area||----|
|B.T.S Company||بي تي سي||Import and export, and commercial brokerage||No information||------|
|Nestlé Iran P.J.S. Co.||شركة نستله||Food industries||Supply of milk to Syria for the time being||6th Floor, No.3, Aftab Intersection, Khoddami St., Vanak Sq., Tehran, Iran|
Iran and Russia have been competing over the reconstruction of Syria and the potentially lucrative investment opportunities that come with it because both countries hope to recoup some of their outputs from years of supporting the Assad regime and also because both hope to maintain their influence in the post-war era. Both Tehran and Moscow are therefore striving to win over major players in the Syrian political and economic spheres whom they hope to rely on to facilitate their business deals and ensure their respective interests. Consequently, both countries have established economic councils to oversee their ventures and to organize relations with their respective Syrian partners.
The following descriptions of the Syrian-Russian and Syrian-Iranian business councils cover their structures, the total number of members, the most prominent players, and the companies affiliated with their members.
The Syrian-Russian Business Council (SRBC) includes 101 Syrian businessmen and a number of Russian counterparts. It is divided into seven committees covering the main sectors of the economy:
The Syrian membership of the SRBC includes many influential names, as shown in Table 2.
Table 2: Members of the Syrian-Russian Business Council
|Notable Names||Total Number of Businessmen|
|Samir Hasan (Chairman, SRBC)||101|
|Jamal al-Din Qanabrian (Deputy Chairman, SRBC)|
|Mohammed Abu al-Huda al-Lahham, (Secretary, SRBC)|
|Fares al-Shehabi (Businessman)|
|Mehran Khunda (Businessman)|
|Bashar Nahad Makhlouf (Businessman)|
Of these figures, three are particularly prominent:
The SRBC also employs a number of Syrian businessmen of Russian nationality, most notably George Hassouani, who was formerly involved in oil and gas deals with ISIS.
The number of Syrian companies included in the Syrian-Russian Business Council is estimated at 91. These companies are involved in import and export, general trade, textiles, clothing, petrochemicals, energy, and, in a small number of cases, private security operations (see Table 3).
Table 3: Companies in the SRBC
By comparison, Iran has had less success with its business council venture than Russia. The Syrian-Iranian Business Council (SIBC) was established in March 2008, and was initially led by Hassan Jawad. It was reconstituted in 2014 with nine members, as shown below in Table 4.
Table 4: Members of the SIBC
|Notable Names||Total Number of Businessmen|
|Samer al-Asaad (President, SIBC)||b|
|Iyad Mohammed (Treasurer, SIBC)|
|Mazen Hamour (Businessman)|
|Osama Mustafa (Businessman)|
|Hassan Zaidou (Businessman)|
|Khaled al-Mahameed (Businessman)|
|Abdul Rahim Rahal (Businessman)|
|Mazen al-Tarazi (Businessman)|
Some of these figures have significant economic influence:
The number of companies owned by Syrian businessmen who are members of the SIBC board is estimated at 10 (see Table 5).
Table 5: Companies Owned by SIBC Members
Abdul Rahim & Fawzi Rahal Co.
|Al-Shameal Oil Services Co.||
National Aviation, LLC
|Rahal Money Transfer Co.||
Ebdaa Development & Investment Co.
Mazen Hamour International Group
Development Co. for Oil Services
Dagher & Kiwan General Trading Co.
Concord al-Sham International Investment Co.
Because of the relatively small number of Syrian members of the SIBC, Iran is making additional efforts to woe Syrian businessmen. According to private sources, Syrian businessmen are seeking contracts with Iranian companies in return for being granted a share of the value of the contract. Table 6 shows key Syrian figures engaged with Iran.
Table 6: Syrian Businessmen Engaged with Iran
1.Faisal Talal Saif
|Head of the Suweida Chamber of Commerce and Industry||
2.Mohamed Majd al-Din Dabbagh
|Head of the Aleppo Chamber of Commerce|
|Head of the Quneitra Chamber of Commerce and Industry||
4.Abdul Nasser Sheikh al-Fotouh
|Head of the Homs Chamber of Commerce|
|Head of the Deir Ezzor Chamber of Commerce and Industry||
|Head of the Rural Damascus Chamber of Commerce|
|Merchant from the Damascus Chamber of Commerce||
|Head of Latakia Chamber of Commerce and Industry|
10.Hamza Kassab Bashi
|Head of Hama Chamber of Commerce|
|Director of International Relations at the Commercial Bank of Syria||
12.Mohammed Khair Shekhmous
|Head of the Hasaka Chamber of Commerce and Industry|
14.Wahib Kamel Mari
|Head of the Tartous Chamber of Commerce and Industry|
|Head of the Daraa Chamber of Commerce and Industry|
|Head of the Federation of Chambers of Commerce||
|General Manager of MOD|
|Secretary-General of the Damascus Chamber of Commerce||
|Head of the Syrian Exporters Union||
|Head of the Union of Agricultural Chambers||
|Director of the Latakia Chamber of Commerce and Industry|
|Head of Syrian Businesswomen||
|Union of Syrian Agricultural Chambers|
|Rami Makhlouf 's partner||
|Syrian Exporters Union|
34.Gamal Abdel Karim
38.Mohammed Ali Darwish
|Owner of Sham Wings Co.|
|Director of a construction company|
|Foodco for Food Industries|
|Blue Planet Energy Co.||
|Oil and gas sector|
Iran seeks to obtain lucrative investment opportunities in different sectors of the Syrian economy, whether through tenders or monopolies. The main sectors in which Iran is trying to get full access are: agriculture, tourism, industry, reconstruction, and private security.
The tourism sector is considered one of the most vital sectors in the Syrian economy: it constituted a 14.4 percent share of Syria’s GDP in 2011 (US 64 billion). It has of course been heavily affected by the war, and tourism revenues decreased from SYP 297 billion (around USD 577 million) in 2010 to SYP 17 billion (around USD 33 million) in 2015, while tourism infrastructure suffered a loss of nearly SYP 14 billion (around USD 27 million) over that same period.
Tehran’s investment in Syria’s the tourism sector has been mostly in religious tourism. For instance, the Syrian Minister of Tourism signed a MOU with the Iranian Hajj Organization in 2015 to bring Iranians and others into Syria for religious tours. There are now estimated to be 225,000 religious tourists from Iran, Iraq, and the Gulf countries visiting Syria each year, and they bring in around SYP two billion (around USD 3.9 million) in revenue.
The industrial sector contributed 19 percent of Syria’s GDP in 2011, and has suffered losses estimated at USD 100 billion during the war. Iran has several industrial facilities in Syria. These are concentrated in the automobile sector, where they include the Syrian-Iranian International Motor Company and Siamco. Iran has also invested in the glass industry in Adra industrial city. The Iranian Saipa group announced a growth in sales of 11 percent in 2017 in Iraq, Syria, Lebanon, and Azerbaijan. Car sales in Syria reached a significant level: although it was a third of 2018 sales in Iraq so far, 50,000 cars were sold in Syria last year.
Iran has tried to obtain contracts from the Syrian government in the industrial sector, and a number of MOUs have been signed. They include:
In 2018, the Syrian-Iranian Business Council submitted a proposal for the participation of Iranian companies in the rehabilitation of Syria’s public industrial sector. In addition, the Iranian Ministry of Industry has expressed a wish to establish a cement production company in Aleppo as part of the second phase of implementation of the Iranian credit line.
The construction sector contributed 4.2 percent of Syria’s GDP in 2011 and then suffered a losses of USD 27 billion over the next six years. Syrian infrastructure has taken a similarly heavy hit as a result of the conflict, with losses valued at around at USD 33 billion, including over three million destroyed houses or housing units.
Iran’s interests in reconstruction—as with tourism—have a religious tinge and are mainly focused on the areas around sacred Shi’a shrines. For instance, Iran has been asking the Syrian regime for large concessions in Daraya, the old city of Damascus, Sayida Zainab, and Aleppo. Thus far Iran has mostly relied on Syrian intermediaries to purchase real estate, businessmen such as Bashar Kiwan, Mazen al-Tarazi, Mohammad Jamul, Saeb Nahas, Muhammad Abdul Sattar Sayyid, Daas Daas, Firas Jahm, Nawaf al-Bashir, and Mohammad al-Masha'li. Tehran has also relied on Syrian associations such as Jaafari, Jihad al-Binaa, the al-Bayt Authority, and “the Committee for the Reconstruction of the Holy Shrines" to expand and acquire new land in or near the holy sites in Damascus, Deir Ezzor, and Aleppo.
The ongoing conflict in Syria has prompted international outcry and condemnation, as well as a long list of "red lines" and sanctions. The sanctions currently in place against Syria include an oil embargo, restrictions on certain investments, a freeze of the Syrian central bank's assets within the European Union, and export restrictions on equipment and technology that might be used for repression of Syrian civilians.
The problem with the sanctions on Syria is that they are ill suited to address the situation, in which sanctions are unlikely to work due to the ongoing war. The EU took significant steps very early in the Syrian conflict, essentially deploying its entire sanctions toolbox in less than one year, in contrast to its more common step-by-step sanctions approach. After a few years, the EU realized that this approach was rushed and ineffective and was forced to backtrack on some measures. This learning process showed the EU that an arms embargo is not necessarily the best first way to address a conflict situation.
|Name||Arabic Name||Main Activity||Agreement|
Abdul Rahim & Fawzi Rahal Co.
|شركة عبد الرحيم وفوزي رحال||معمل مواد بناء، تجارة عامة، استيراد وتصدير||حماة/طيبة الإمام، سوريا.|
|Ebdaa Development & Investment Co.||شركة إبداع للتطوير والاستثمار||تجارة عامة، استيراد وتصدير||ريف دمشق|
Development Co. for Oil Services
|شركة التنمية لخدمات النفط||الخدمات النفطية||------|
|Obeidi for Construction & Trade||شركة عبيدي وشريكه للتجارة والمقاولات||تجارة عامة، استيراد وتصدير، المقاولات||فندق الداما روز بدمشق|
|Talaqqi Company||شركة تلاقي||تجارة عامة، استيراد وتصدير، مستحضرات التجميل||دمشق، كفرسوسة، عقار رقم 2463/ 87|
|Nagam al-Hayat Company||شركة نغم الحياة||تجارة عامة، استيراد وتصدير، الخدمات الاستشارية||ريف دمشق، يلدا/ دف الشوك/ العقار رقم 507|
|IBS for Security Services||----||---||---|
|Al-Hares for Security Services||شركة الحارس للخدمات الأمنية||خدمات الأمن والحماية الشخصية||دمشق|
|Mobivida L.L.C||شركة موبي فيدا||تجارة الأجهزة الإلكترونية، الهواتف المحمولة والإكسسوار، وتطوير خدمات الهواتف والإنترنت||دمشق|
|Al-Mazhor Company for Construction||شركة المظهور التجارية||تجارة عامة، استيراد وتصدير، المقاولات||دير الزور|
|Al Najjar & Zain Travel & Tourism Company||شركة النجار وزين" للسياحة والسفر||السياحة الدينية||نبل، مقابل مستوصف نبل عبارة الضرير / محافظة حلب|
|Under EU Sanctions?||Under U.S. Sanctions?||Visited Abu Dahbi(UAE) in Jan 2019?||Main Position||Closeness of Relationship with Iran||Name in Arabic||Name|
|-||Yes||Yes||Secretary-General of the Federation of Syrian Chambers of Commerce||High||محمد حمشو||Mohammad Hamsho|
|-||-||-||Member of Syrian Parliament||High||حسين رجب||Hussein Ragheb|
|-||-||-||Businessman||High||حسان زيدو||Hassan Zaidou|
|-||Yes||Yes||Member of Syrian Parliament||High||محمد خير||Muhammad Kheir Suriol|
|-||Yes||Yes||Member of Syrian Exporters Union||High||إياد محمد||Iyad Muhammad|
|-||Yes||Yes||Manager of the Federation of Syrian Chambers of Commerce||High||فراس جيكلي||Firas Jijkli|
|-||-||-||Chairman of the Supreme Committee for Investors in the Free Zone||High||فهد درويش||Fahd Darwish|
|-||-||-||Syrian Ambassador to Iran||High||عدنان محمود||Adnan Mahmoud|
|-||-||-||Businessman||Medium||عامر خيتي||Amer Khiti|
|-||-||-||Businessman||High||علاء الدين خير بيك||Alla Ed din Khair Bik|
|-||-||-||Businessman||Low||جورج مراد||George Murad|
|-||Businessman||Low||منير بيطار||Munir Bitar|
|Yes||Yes||-||Works in SDF-controlled area and has relationship with Samir al-Foz||High||محمد القاطرجي||Mohamed al-Qtrji|
|-||-||-||Businessman||High||علي كامل||Ali Kamil|
|-||-||Yes||Al-Matin Group General Manager||Medium||لبيب إخوان||Labib Ikhwan|
|-||-||-||Businessman||High||سامر علوان||Samir Alwan|
|-||-||-||Businessman||Medium||ناهد مرتضى||Nahid Murtda|
|-||-||-||Businessman||Medium||مصان النحاس||Musan al-Nahas|
|-||-||Yes||Businessman||High||ربى منقار||Ruba Munqar|
|-||-||-||Businessman||Low||هاروت ديكرمنيجان||Harot Dikrmnjyan|
Hezbollah has been heavily reliant on Iran’s generosity, to fund its operation, with Tehran’s aid estimated at around USD 700 million in 2008.
The organization has nonetheless increasingly diversified its revenue base, getting involved in drug trade, counterfeiting operations, arms trade and money laundry operations, in the US, the Caribbean, Europe, and Africa.
Hezbollah has also been involved in licit ventures such as construction and various trading businesses in Africa.
In Lebanon and Israel, Hezbollah has mostly relied on dealing drugs to extort information from Israeli military or recruit new agents. However in recent years, more and more Hezbollah members has been involved in drug and other illicit trade scandals, as well as racketeering schemes, the organization having difficulty in cracking down on corruption.
Originally, a southern Lebanese group focused on fighting the Israeli occupation (1982 to 2000), Hezbollah has morphed into a powerful paramilitary force with military activities throughout the Middle East region. Today, the Iran-backed militant group is firmly entrenched at all levels of the Lebanese political system including the government (the ministerial cabinet, i.e. majlis al wozara), the various state institutions, and the parliament. Hezbollah’s growing local and regional influence can be attributed to the astuteness of its leadership, its military prowess, and its substantial financial resources, including a yearly budget allocated by Iran.
The Israeli army estimated in 2018 that Hezbollah received between USD 700 million - 1 billion per year from Tehran.() Sources within Hezbollah who spoke to the author added that the group has been diversifying its revenue stream through both licit and illicit funding. In recent years, drug and money laundering scandals have been linked to Hezbollah in South America, the United States, Europe, and Africa. In Lebanon, media reports and interviews with Hezbollah members have pointed to the involvement of figures in and close to the organization in drug and money laundering scheme scandals and in the grey economy.
Locally, much ambiguity surrounds the debate around Hezbollah’s involvement in the drug trade for several reasons including but not only because of widespread support the organization enjoys within its community. First, according to interviews conducted by the author in Lebanon, Hezbollah is mostly known to have directly dealt in drugs schemes with members of the Israeli military in exchange for information, also called “drug-for-intelligence”.() Second, with the exception of a few situations, Hezbollah has been indirectly linked to illicit activity, via its supporters and donors. Another reason for the ambiguity is that in South America, radical Islamists whether affiliated with the Palestinian Jihad, Iran, and Hezbollah are often bundled together without clear distinction. Finally, Hezbollah members directly involved with illicit activity in Lebanon often use the coverage provided by their status in the organization to operate as free business agents, which highlights Hezbollah’s growing internal corruption.()
Taking all of these nuances into consideration, this paper will examine Hezbollah’s various revenue streams. In a first section, the paper looks into Hezbollah’s sprawling structure and its relationship with Iran. The second section will look at Hezbollah’s international illicit activity. The final section will focus on the organization’s illicit activity in Lebanon and Syria. This paper relied primarily on interviews conducted by the author with current and former Hezbollah members as well as experts and individuals close to Hezbollah in Lebanon.
In the late 1970’s, when southern Lebanon was engulfed in a war against Israel, a Shiite group known as The Amal Movement rose to power. The group, founded by Sayed Musa Sadr, supported the Palestinian struggle against Israel. In 1982, the organization split after its new leader Nabih Berry – now incumbent speaker of the Lebanese Parliament – decided not to fight Israel’s advance into Lebanon. This decision was contested by the Amal party’s Islamic branch, which defected as a result. The latter faction was trained by Iranian Revolutionary Guard Corp (IRGC) forces, which had been sent to Lebanon to stop the progress of the Israeli Defense Forces (IDF).() With the support of Iran, a politico-military command structure bringing Islamists and former Amal cadres together and an ideological platform known as the ‘Manifesto of the Nine’ were forged for the nascent resistance, marking the foundation of Hezbollah.() The platform called for jihad against Israel, emphasized Islam as the movement’s doctrine, and declared the signatories’ adherence to the Iranian wilayat al-faqih ideology.
Iran realized that in order to protect its military gains in Lebanon, it had to capture the hearts and minds of its proxy’s popular base. With Iran’s assistance, Hezbollah built an extensive network of social services in Lebanon.() According to a report by the Middle East Policy Council (MEPC), Hezbollah developed a highly organized system of health and social service organizations under the umbrella of its Social Unit, Education Unit, and Islamic Health Unit. According to the MEPC, Hezbollah’s Social Unit includes four organizations: the Jihad Construction Foundation (Jihad al-Binaa), the Martyrs’ Foundation, the Foundation for the Wounded, and the Khomeini Support Committee. In the early 2000’s, the Jihad Construction Foundation delivered water to about 45 percent of the residents of Beirut's southern suburbs and led reconstruction efforts in the southern suburbs after the 2006 war with Israel. In an interview with the author, Annahar columnist and Hezbollah expert Brahim Beyram estimated that Iran provided Hezbollah with $200-300 million a year. However in 2017, the IDF assessed that Hezbollah was receiving around $830 million per year from Iran,() with the expansion of the Lebanese Hezbollah operations into Syria, where over 7,000 fighters were at the time intermittently deployed. A figure that is believed to have dropped significantly with winding down of the conflict.
A source close to Hezbollah’s fighters told the author that “besides being financed by Iran, Hezbollah has diversified its money stream and is trying to be more autonomous financially.” This could explain growing accusations against Hezbollah about its involvement in illicit activities. According to Dr. David Asher, a senior fellow at the Foundation for the Defense of Democracies (FDD),() Hezbollah’s drugs-for-intelligence program has evolved into a massive drugs-for-profit initiative. “Hezbollah, partnered with Latin American cartels and paramilitary partners, is now one of the largest exporters of narcotics from South and Central America to West Africa into Europe and is perhaps the world’s largest money laundering organization,” said Asher in a 2017 congressional testimony in front of the House Foreign Affairs Committee.()
Hezbollah relies on a sprawling global network of members engaged in various illicit activities. Much of this effort is focused in Latin America. Hezbollah’s illicit activity in South America appears to be focused on two main areas. Through supporters within its popular Shiite base in keys areas such as the tri-border area (TBA) of Paraguay, Brazil, and Argentina, as well as in Colombia and Venezuela. “Hezbollah’s drug trafficking operations in Latin America are spread over a number of places. The TBA is one; Colombia is another; there also important centers of trade that are used for money laundering purposes and smuggling, such as free trade zones there,” said Dr. Emanuele Ottolenghi, a senior fellow at FDD, working on the Iran program.() In addition, Hezbollah’s activities have also expanded to other countries and regions such as the U.S. and Europe.
In 2004, Assad Barakat was described by the U.S. Department of the Treasury as “one of the most prominent and influential members” of Hezbollah, according to a paper by Matt Levitt, an expert on terrorism and security at the Washington Institute For Near East policies.() Barakat’s import-export store at the Galeria Page shopping center in Paraguay was reportedly used for various nefarious activities ranging from counterfeit currency operations to drug running. Levitt’s paper described the 2006 arrest of Farouk Omairi by the Brazilian Federal Police in Operation ‘Camel,’ for providing travel support to cocaine smugglers. Omairi was believed to be acting as regional coordinator for Hezbollah and was involved in trafficking narcotics between South America, Europe, and the Middle East.
Paraguay has reportedly arrested Moussa Ali Hamdan in 2010 for providing material support to Hezbollah by selling counterfeit goods, money, and passports.() In 2013, Wassim Fadel was arrested in Ciudad del Este, Paraguay after he had used a 21-year-old Paraguayan girl as a “drug mule” to smuggle narcotics to Europe. The girl was caught with 1.1 kilos of cocaine in her stomach. According to a statement by Paraguayan police published by MEE, Fadel reportedly transferred the money he made from both narco-trafficking and the pirating of CDs and DVDs into bank accounts owned by people connected to Hezbollah located in Turkey and Syria. In May 2018, Foreign Policy reported that Paraguayan authorities raided Unique SA, a currency exchange house in Ciudad del Este, Paraguaya, and arrested its owner Nader Farhat for his role in an alleged $1.3 million drug money laundering scheme.() “Farhat is alleged to be a member of the Business Affairs Component, the branch of Hezbollah’s External Security Organization in charge of running overseas illicit finance and drug trafficking operations,” said the article.
In 2008, the U.S. Department of Treasury sanctioned Hezbollah supporter Ghazi Nasr al-Din, a former Chargé d' Affaires at the Venezuelan Embassy in Damascus.() Hezbollah maintained a friendly and close relationship with the Venezuelan government led by Hugo Chavez, which evolved “into a tight ideological and business partnership,” according to an article published by Now Lebanon.() The same article, quoting Lebanese Hezbollah expert Kassem Kassir, underlined that “a number of students and young men went [to Venezuela] to participate in festivals, conferences and workshops. There were some consultants of Chavez who came to Beirut and visited Hezbollah officials.”
According to U.S. authorities, Venezuela acts as a safe heaven and a source of funding for Hezbollah members and supporters. In 2015, ABC International reported that Nasr al-Din maintained a close relationship with Tarek Aissami,() former vice president of Venezuela who was accused by the U.S. of facilitating drug shipments out of Venezuela and of drug trafficking, and together they attended a meeting with members of the Cartel of the Suns, a powerful network of Venezuela traffickers. In 2009, Nasr al-Din was also linked to the transportation of 400 kilos of cocaine from Venezuela to Lebanon via Damascus, transported by Conviasa, the Venezuelan flag carrier.
“Spanish investigative journalist, Antonio Salas who covered extensively the subject, has emphasized that a group of Hezbollah members linked to the Nasr al-Dingroup have engaged in drug trafficking under protection of Aissami. These people enjoyed a special (privileged) relation with the state,” underlined expert Douglas Farah, in an interview with the author.()
In 2008, U.S. and Colombian investigators dismantled an international cocaine smuggling and money laundering ring that allegedly used part of its profits to finance Hezbollah.() At the heart of the case was a kingpin in Bogota, Colombia, named Chekry Harb, who went by the alias "Taliban." According to the LA Times, Harb's group paid Hezbollah 12 percent of its profits, much of it in cash. “Harb brags about his uncle in the court documents being a senior member of Hezbollah,” said Ottolonghi to the author.
In 2009, 17 people were reportedly arrested in Curacao for alleged involvement in a drug trafficking ring with connections to Hezbollah.() The police underlined that some of the proceeds, funneled through informal Middle Eastern banks, went toward supporting groups linked to Hezbollah in Lebanon. "We have been able to establish that this group has relations with international criminal organizations that have connections with the Hezbollah," prosecutor Ludmila Vicento said to the Guardian. The amount confiscated by the police was significant and included two shipments of cocaine totaling 2,000 kilograms (4,400 pounds). The traffickers used cargo ships and speedboats to import the drugs from Colombia and Venezuela for shipment to Africa and beyond to Europe, according to Curacao authorities.
5. The United States
According to a report by Matthew Levitt, in 2009 the U.S. Immigration and Customs Enforcement agency revealed a series of Hezbollah criminal schemes in the U.S., which ranged from stolen laptops, passports, and gaming consoles to selling stolen and counterfeit currency, procuring weapons, and a wide range of other types of material support.() “In those cases, senior Hezbollah officials from both the organization's public and covert branches played hands-on roles in the planning and execution of many of the criminal schemes,” said Levitt. In July 2015, Lebanese National Ali Hassan Mansour, was arrested pursuant to a provisional arrest warrant issued in the Southern District of Florida by French authorities through diplomatic channels.() Mansour, a money launderer based in Beirut, was charged with multiple counts of money laundering over the course of a narcotics conspiracy. The report labeled Mansour as being a key money launderer and drug trafficker for Hezbollah’s External Security Office, and Business Affairs Component (BAC) global illicit network.
In 2017, another Lebanese man accused of trying to use his ties to Hezbollah to further a scheme to launder drug money pleaded guilty in New York.() Joseph Asmar worked with Lebanese businesswoman Iman Kobeissi, who had boasted she could use her Hezbollah connections to provide security for drug shipments. Kobeissi, who had been arrested earlier, had admitted she had friends in Hezbollah who wanted to purchase cocaine, weapons, and ammunition, according to the complaint.() Kobeissi said her associates in Africa could provide security for planeloads of cocaine heading to the U.S. and other countries. She was also accused by prosecutors of having laundered hundreds of thousands of dollars in illegal drug money through transactions in European and Lebanese banks. “The Iman Kobeissi case is one of the cases that have directly linked senior Hezbollah leadership to drug trafficking activities,” said Ottolenghi
In January 2016, ‘Operation Cedar’ raids targeted Hezbollah operations in France, Germany, Italy, and Belgium, led by local law enforcement and supported by the U.S. Drug Enforcement Administration.() These raids resulted in the arrest of over a dozen individuals involved in international criminal activities such as drug trafficking and drug proceed money laundering. During the raids, several millions in assets and cash were seized that were believed to be linked to drug proceeds that were collected by money launderers throughout Europe. ”These actions specifically targeted Lebanese Hezbollah criminal operations in Europe,” said Asher at the time.() For Ottolenghi, Operation Cedar is another case that directly tied Hezbollah leadership to illegal activities.() “Europe is a booming market for cocaine. Hezbollah taps that market by facilitating multi-ton shipments of cocaine from Latin America into Europe. Hezbollah operatives are involved in laundering its revenues there on behalf of local criminal syndicates,” he noted.
These prominent cases linked to Hezbollah’s illicit activity, and others not described here, demonstrate that networks linked to the Lebanese militant group were clearly operating at an international level. Project Cassandra, which was unveiled last year in 2017 by Politico magazine,() was launched in 2008 by the U.S. Federal Bureau of Investigation (FBI) to target Hezbollah’s illicit funding streams. The project showed that cocaine shipments – some traveling from Latin America to West Africa and on to Europe and the Middle East, and others through Venezuela and Mexico to the U.S. – were all connected to a line of dirty money, laundered through used car schemes that were shipped to Africa. The FBI believed at the time that the Hezbollah network was collecting $1 billion a year from drug and weapons trafficking, money laundering, and other criminal activities.
Hezbollah does not rely on illicit trade alone for financing, as the organization also has revenue from legitimate businesses in Lebanon and Africa. “Part of Hezbollah’s attempt to diversify its revenue stream is the organization’s licit enterprises. Hezbollah uses front figures to operate legitimate businesses mostly involved in construction, car dealing as well as gas stations in Lebanon, and trading activities in Africa,” said a source close to the party to the author.
In recent years, Hezbollah-linked businesses have been targeted by U.S. law enforcement organizations for money laundering activity. In 2018, the U.S. Treasury designated six individuals and seven entities pursuant to Executive Order (E.O.) 13224,() which targets terrorists and those providing support to terrorists or acts of terrorism. Specifically, they designated Lebanon-based Jihad Muhammad Qansu, Ali Muhammad Qansu, Issam Ahmad Saad, and Nabil Mahmoud Assaf, and Iraq-based Abdul Latif Saad and Muhammad Badr-Al-Din for acting for or on behalf of Hezbollah member and financier Adham Tabaja or his company, Al-Inmaa Engineering and Contracting. The U.S. also designated Sierra Leone-based Blue Lagoon Group LTD and Kanso Fishing Agency Limited, Ghana-based Star Trade Ghana Limited, Liberia-based Dolphin Trading Company Limited (DTC), Sky Trade Company, and Golden Fish Liberia LTD, and Lebanon-based Golden Fish S.A.L. (Offshore) for being owned or controlled by Ali Muhammad Qansu. Adham Tabaja had already been previously sanctioned in 2015, along with Kassem Hijaj and Husein Ali Faoud.() “The DEA has identified Adham Tabaja as one Hezbollah‘s most senior member within the organization’s Business Component Affairs,” said Ottolenghi. Tabaja is also known to be a majority owner of the Lebanon-based real estate development and construction firm Al-Inmaa Group for Tourism Works. The company’s subsidiaries include Al-Inmaa Engineering and Contracting, which operates in Lebanon and Iraq, as well as Lebanon-based Al-Inmaa for Entertainment and Leisure Projects. In 2018, Tabaja is believed to have used the Iraqi branches of Al-Inmaa Engineering and Contracting to obtain oil and construction development contracts in Iraq. Kassem Hijaj was also accused of investing in infrastructure that Hezbollah uses in both Lebanon and Iraq.
Another man, Husayn Ali Faour, was accused of being a member of Hezbollah’s Islamic Jihad, which is believed to be the unit responsible for carrying out the group’s overseas terrorist activities.() Faour managed the Lebanon-based Car Care Center, a front company used to supply Hezbollah’s vehicle needs. Faour worked with Tabaja to secure and manage construction, oil, and other projects in Iraq for Al-Inmaa Engineering and Contracting. A new wave of sanctions in 2019, targeted Hassan Tabaja, the brother of Adham and Wael Bazzi for facilitating Hezbollah financial operations.()
A source close to Hezbollah members told the author that in addition to car, trading, and construction activity, the organization is also involved in the diamond and gold trade in Africa. The expert Douglas Farah concurs, adding that Africa was a good collection point for Hezbollah, whose activity ranges from blood diamond trade to Europe, especially to Antwerp, in Belgium.
Diamond and trade are not the only business Hezbollah members are involved in. In 2012, Reuters reported that the Democratic Republic of Congo had awarded forestry concessions to the Trans-M company, which was subject to sanctions by the U.S. for being a front company used by Hezbollah.() Reuters explained that the concessions covered a 25-year lease for hundreds of thousands of hectares of rainforest in the central African country. “The concessions are capable of generating hundreds of millions of dollars in revenues over 25 years, if fully exploited,” forestry experts told Reuters. Trans-M was controlled by businessman Ahmed Tajideen, known to also be the owner of Congo Futur, a company that manages sawmills and is accused by the U.S. government of being a front for Hezbollah.
Allegations of Hezbollah’s illicit activity schemes have been denounced by many Hezbollah members as well as by Lebanese experts privy to the organization’s internal workings. “Members of Hezbollah are known to be honorable and dedicated to the cause, this has made the success of the organization since its inception,” said Ahmad, a Hezbollah fighter who spoke to the author on the condition of anonymity. Despite the amount of attention they received in the press, several cases, such as that of Chekry Harb, are in many ways circumstantial. Harb was accused of cooperating with Hezbollah and having family relations with some of its members. A nephew of a Hezbollah operative, Harb donated large amounts to the organization. In the cases of Hamdan and Fadel there was little hard evidence of a clear link with Hezbollah. “While some people arrested in South America were directly linked to Hezbollah, many individuals involved in illicit activities are actually either sympathetic to Hezbollah or were intimidated by them into giving them donations,” said Farah. In addition, Farah underlines that in South America, no distinction is made between Iranian and Hezbollah operators, which adds to the general confusion.
Nonetheless, other cases such as Kobeissi, Farhat, Barakat, and Omairi, show a clear and direct connection between Hezbollah members and criminal entrepreneurs. In the above mentioned cases, even when the organization was not directly responsible for the illicit trade, it facilitated it and covered it. In addition, Hezbollah knowingly received money from shady business figures or drug dealers sympathetic to its cause.
For Annahar’s columnist and Hezbollah expert, Ibrahim Bayram, the U.S. accusations against Hezbollah and its supposed involvement in the drug trade are farfetched and political in nature. “There is a clear American agenda against Hezbollah and these drug trade allegations are there to support it,” said Bayram.()
However, at the local level in Lebanon, Hezbollah members appear to be directly involved in criminal enterprises including drug dealing, racketeering, production of counterfeited money and medication, both with or without the knowledge of the top leadership. “Hezbollah’s direct dealing with drugs is solely for political and security reasons. Most drug deals are connected to the drug-for-intelligence and information scheme it has run with members of the Israeli army,” said Hassan, a Hezbollah fighter who spoke on condition of anonymity.
Since its creation, Hezbollah has been using drug dealers, to pursue the organization’s intelligence and military objectives.() Hezbollah was known to employ drug dealers for advancing its political interests, taking advantage of its control over Lebanon’s Bekaa Valley, which is known for its lucrative poppy and hashish production to infiltrate the Israeli military. The organization gave drug dealers political protection as long as they provided the organization with information on Israel. Over the years, a number of Israeli military officers have been charged with drug smuggling or dealing from Lebanon and providing information to Hezbollah.() Hezbollah has also relied on drug dealers to recruit agents among Israeli Arabs.
According to Hezbollah fighters interviewed by the author, Hezbollah’s involvement in the drug trade in Lebanon is no longer driven solely by political or military interests. Sources explain that today, some Hezbollah commanders are tapping into the lucrative drug market for their own personal benefit. This has happened as the organization’s clout has grown in recent years, with its consolidation of power in Lebanon in 2006, and its entry into the Syrian war in 2011. The author could not confirm or invalidate these allegations.
“Hezbollah turns a blind eye to the drug plantations around its training camps, and drug dealers provides it with significant contributions from their proceeds,” said a source close to the organization’s members, on the condition of anonymity. The Lebanese army has long been instructed not to approach spots where Hezbollah is known to host its training camps in the Bekaa, which is the hub of Lebanon’s drug production. One Hezbollah commander hailing from the Bekaa told the author that some members of the organization were involved in abetting dealers involved in the transfer of cocaine into Lebanon to be smuggled into Syria, an accusation the author could not confirm independently. According to a source involved in the drug trade, cocaine is smuggled into Lebanon where it is processed and sent to Syria, and from there to the Gulf.
Machines used in the production of the drug captagon are smuggled into Lebanon illegally via the port of Beirut where Hezbollah is influential. “Hezbollah commanders also facilitate through their control of Lebanese borders with Syria their export of drugs such as captagon,” added the Bekaa commander interviewed by the author and asked to remain anonymous. Lebanon is a large exporter of captagon, sent through the Beirut port or across the Syrian border, with the goal of reaching Gulf countries, explained a source close to the drug dealing networks on the condition of anonymity.
Hezbollah fighters, who spoke to the author for this report, accused the organization’s commanders of covering up illicit business dealings. “Hezbollah’s leadership is often aware of the dealings but has seem reluctant to reign on them because of the high military or political status many commanders have acquired within the organization, especially after the war against Israel in 2006 and currently in Syria,” complained one fighter. It is important to understand why Hezbollah is not doing anything about its members’ illicit activity and rampant corruption, because of its reliance on these commanders for its external operations.
In addition to the drug trade, members of Hezbollah are also involved in the production of counterfeited money in the Lebanese suburb of Dahieh, explained the Bekaa Hezbollah commander in an interview by the author. The counterfeit bills are in turn traded via an international network, which is why Lebanon is known to be a producer of counterfeited money. In 2016, the New York Post reported that a large money-counterfeiting ring was busted when a Lebanese man was arrested for allegedly selling hundreds of thousands of dollars in counterfeit U.S. currency to a global network of clients in Iran, Malaysia, and elsewhere.() According to the Post, between 2012 and 2014, Louay Ibrahim Hussein and other members of the ring sold more than $620,000 in high-quality fake $100 bills and €150,000 in fake Euros to undercover agents. Hussein had allegedly claimed to undercover agents that he had access to as much as $800 million in high-quality counterfeit currency.
Other illicit dealings by Hezbollah members are connected to Iranian aid to Lebanon. One fighter also speaking on condition of anonymity explained that since 2006, food aid given by Iran to Hezbollah, often ended up being sold on the Lebanese market instead of being distributed free. In 2013, a warrant was issued against the brother of the Lebanese Minister of State for Administrative Reform, Mohammad Fneish Abdul Latif Fneish, in connection to a case of illegally imported medications.() “The brother of another Hezbollah minister has also been accused of running a Captagon production facility in Dahieh, every one of us is aware of the issue,” said the Hezbollah commander hailing from the Bekaa and who spoke on condition of anonymity. The author could not independently confirm the accusations.
The Syria war has been another financial boon for Hezbollah commanders, said a Hezbollah fighter speaking on condition of anonymity to the author. “A lot of the weapons seized from Syrian ‘terrorists’ or from ISIS is not given to the Syrian army but sold on the black market ( in Lebanon), which has contributed for the decline of weapons prices such as Kalashnikov, PKC and B7 on the Lebanese market,” said a source close to Hezbollah fighters. The Syrian war has flooded the region with weapons being smuggled into the country. In 2016, a team of reporters from the Balkan Investigative Reporting Network (BIRN) and the Organised Crime and Corruption Reporting Project (OCCRP) uncovered discreet sale of more than €1 billion worth of weapons in the past four years to Middle Eastern countries that were known to ship arms to Syria.() Thousands of assault rifles such as AK-47s, mortar shells, rocket launchers, anti-tank weapons, and heavy machine guns were being routed through an arms pipeline from the Balkans to the Arabian Peninsula and countries bordering Syria.
“There might have one or two accusations of corruption with the war in Syria but these are exceptional and individual cases linked to the conflict there. Hezbollah has very strict rules about anything seized in war theaters and even during battle we were forced to do a detailed inventory of what we seized, and we are obliged to report any mismanagement,” said one Hezbollah commander, commenting on Hezbollah’s alleged illicit activity.
Sources close to Hezbollah admit that its members have been promised lucrative infrastructure contracts in Syria, specifically in Homs and Aleppo. Sometimes, Hezbollah members sponsor Lebanese businessmen getting these contracts in return for a cut of the profits. “The same scenario is taking place in areas under Hezbollah control such as Dahieh. Hezbollah commanders are involved in the parallel economy of providing electricity, satellite connection and water, leaving the government with failing services,” said the source close to the fighters.
Despite the circumstantial nature of the evidence in some cases, Hezbollah’s involvement in large international criminal enterprises is difficult to dismiss. Reports and investigations all point to Hezbollah’s direct or indirect involvement in illicit activity at the international level. At the local level, the organization’s growing clout and the rampant climate of corruption prevailing in Lebanon have been conducive to the increasing involvement of Hezbollah-linked figures in illicit activity.
Although Western accusation of Hezbollah’s corruption and involvement in criminal activity do not appear to have much influence over the organization’s popular base of support, stronger sanctions are taking a toll, forcing the organization to try to make cuts in it budget or attempt to outsource some services to Lebanese government ministries. There are anecdotal reports of members of Hezbollah’s popular base complaining of cuts in aid to the families of martyrs and challenges faced by Hezbollah members in accessing the organization’s health services. With de-escalation agreement in effect in Syria, Hezbollah has been able to bring back a large number of its fighters, thus limiting its military expenditures. The organization’s members have also been slapped by a number of U.S. sanctions. “This nonetheless does not affect Hezbollah which does not resort to the official financial system,” said Bayram. However, sanctions have impacted Hezbollah’s capability to launder its money via front individuals and companies. A U.S. based financial consultant working on countering money laundering activities told the author that U.S. correspondent banks are forcing Lebanese banks to closely monitor and close accounts suspected of laundering money for Hezbollah, with dozens of accounts terminated as a result. A high-level source in a Lebanese public financial institution explained that the Lebanese Central Bank has applied strict measures to prevent Hezbollah’s use of the banking sector. “The use of Hezbollah in construction, car rental, luxury store as fronts is nonetheless a possibility,” says the official.
Besides the challenge posed by increased sanctions, Hezbollah is faced with a growing conundrum linked to corruption. The organization’s promise to focus on fighting corruption in the Bekaa Valley during the electoral campaign prior to the May parliamentary elections is an indirect admission of the poor state of affairs when it comes to governance issues and deep dissatisfaction of its popular base. Corruption among Hezbollah members is not the only grievance of Shiites, whose complaints focus more on Lebanon’s general state of affairs. Hezbollah previously claimed that it focused only on its resistance activities and Lebanon’s military defense, but with its participation in successive national governments since 2008, this argument no longer holds. Furthermore, deteriorating economic conditions are challenging Hezbollah, with sources within Hezbollah reporting a growing dissatisfaction due to severe pay cuts. It seems that financial sanctions, led to a decline in the organization’s revenues, coupled with increased corruption scandals and an extended truce period with Hezbollah’s nemesis Israel, could prove more detrimental to the group on the longer run.
() Israel soldier among arrested 'Hezbollah spies, , BBC, 20 June 2010 , https://www.bbc.com/news/10462662
() Marc Devore, Exploring the Iran-Hezbollah Relationship: A Case Study of How State Sponsorship Affects Terrorist Group Decision-Making, Perspective on terrorism, Vol 6, No 4-5 (2012), http://www.terrorismanalysts.com/pt/index.php/pot/article/view/218/html
() Ahronheim Anna, Iran pays $830 million to Hezbollah, September 15 2017, Jerusalem Post , https://www.jpost.com/Middle-East/Iran-News/Iran-pays-830-million-to-Hezbollah-505166
() Asher David, Attacking Hezbollah, financial networks , June 8 2017, https://docs.house.gov/meetings/FA/FA00/20170608/106094/HHRG-115-FA00-Wstate-AsherD-20170608.PDF
() Levitt Matt, Hezbollah narco-terrorism, September 2012, IHS Defense, https://www.washingtoninstitute.org/uploads/Levitt20120900_1.pdf and https://www.treasury.gov/press-center/press-releases/Pages/js1720.aspx
()Ottolonghi Emanuele, Lebanon is protecting Hezbollah’s cocaine trade in Latin America, June 15 2018, Foreign policy, https://foreignpolicy.com/2018/06/15/lebanon-is-protecting-hezbollahs-cocaine-and-cash-trade-in-latin-america/
()Treasury Targets Hezbollah in Venezuela, June 2008, US Department of treasury, https://www.treasury.gov/press-center/press-releases/Pages/hp1036.aspx
()Blasco Emily, El FBI investiga la conexión entre el narcoestado venezolano y Hizbolá, January 31 2015, ABC, https://www.abc.es/internacional/20150130/abci-venezuela-droga-201501302321.html
()Chris Kraul and Sebastian Rotella, Drug probe finds Hezbollah link, october 22 2008, LA ztimes, http://articles.latimes.com/2008/oct/22/world/fg-cocainering22
() Longmire Sylvia, DEA Arrests Hezbollah Members For Allegedly Laundering Cartel Money, February 5 2016, Homeland Security https://inhomelandsecurity.com/dea-arrests-hezbollah-members-allegedly-laundering-cartel-money/ and https://www.treasury.gov/press-center/press-releases/pages/tg1035.aspx
() Finding that the Lebanese Canadian Bank SAL is a Financial Institution of Primary Money Laundering Concern, Department of the Treasury, https://www.fincen.gov/sites/default/files/shared/LCBNoticeofFinding.pdf
() Levitt, Matt, Hezbollah's Criminal Networks: Useful Idiots, Henchmen, and Organized Criminal Facilitators, October 2016, National Defense University https://www.washingtoninstitute.org/policy-analysis/view/hezbollahs-criminal-networks-useful-idiots-henchmen-and-organized-criminal
() Asher Danid, Tracking Hezbollah’s Financial Network, June 8 2017, https://docs.house.gov/meetings/FA/FA00/20170608/106094/HHRG-115-FA00-Wstate-AsherD-20170608.PDF
()Stemple Jonathan, U.S. says Hezbollah associate pleads guilty to money laundering conspiracy, June 27, 2017, Reuters, https://www.reuters.com/article/usa-crime-hezbollah-asmar/u-s-says-hezbollah-associate-pleads-guilty-to-money-laundering-conspiracy-idUSL1N1IS1K2
() Ya libnan, 2 Lebanese charged with laundering money for Hezbollah, October 10, 2015 http://yalibnan.com/2015/10/10/2-lebanese-charged-with-laundering-money-for-hezbollah/
() Asher David, Tracking Hezbollah’s Financial Network, https://docs.house.gov/meetings/FA/FA00/20170608/106094/HHRG-115-FA00-Wstate-AsherD-20170608.PDF
() Asher David, Tracking Hezbollah’s Financial Network, https://docs.house.gov/meetings/FA/FA00/20170608/106094/HHRG-115-FA00-Wstate-AsherD-20170608.PDF
() The secret backstory of how Obama let Hezbollah off the hook, December 2017, Politico, https://www.politico.com/interactives/2017/obama-hezbollah-drug-trafficking-investigation/
() Wilson Center, US sanctions target Businesses close to Hezbolllah, June 10, 2015 https://www.wilsoncenter.org/article/us-sanctions-target-businesses-linked-to-hezbollah
() US issues new Hezbollah-related sanctions, April 24 2019, Al-Jazeera, https://www.aljazeera.com/news/2019/04/issues-hezbollah-related-sanctions-190424175927380.html
()Mahatani Dino, Exclusive: Congo under scrutiny over Hezbollah business links, March 16 2012, Reuters https://www.reuters.com/article/us-congo-democratic-hezbollah/exclusive-congo-under-scrutiny-over-hezbollah-business-links-idUSBRE82F0TT20120316
() Melman, Yossi, Hezbollah’s drug trail, October 72016, the Jersualem Post https://www.jpost.com/Israel-News/Analysis-Hezbollahs-drug-trail-469616
() Israel soldier among arrested 'Hezbollah spies, June 2010, BBC, https://www.bbc.com/news/10462662
() Eustaseuwich Lia, Lebanon man accused of selling counterfeited money abroad, July 26, 2016, New York Post, https://nypost.com/2016/07/26/lebanese-man-accused-of-selling-counterfeit-us-currency-abroad/
The Syrian-Iranian Business Forum opened in Damascus in January 2019. In attendance were Ishaq Jahangiri, the first vice president of the Islamic Republic of Iran, and Syrian Prime Minister Imad Khamis, as well as a broad swathe of businessmen and company representatives from both countries. This was the first official economic meeting between the two countries that took place in Syria in 2019.
In October 2018, a delegation of Syrian businessmen headed by Mohammad Hamsho, secretary-general of the Federation of Syrian Chambers of Commerce, traveled to Tehran. There they met with deputy minister of roads and construction for the Iranian cities of Akbar, Fakhri, and Kashan to discuss ways to expand cooperation between the private sectors in Syria and Iran in various economic, developmental, and industrial fields.
The 2018 delegation and the 2019 Business Forum events are the key pillars for the development of a stronger economic relationship between Iran and Syria.
An economic relationship between Iran and Syria did exist in previous years, but it was largely conducted quietly behind the scenes due to the challenging political and military conditions. With the improving conditions and the re-emergence of the Syrian-Iranian Business Forum, it has become easier for Iran to increase its economic role in Syria.
The Syrian-Iranian Business Forum is expected to play an influential role in Syria in 2019. Iran will increase its dependency on local Syrian brokers to do its business in the country so that its activities will not be detected and targeted by sanctions.
This report will provide a brief overview of the October 2018 and January 2019 economic visits between Syria and Iran and what resulted from them. Future reports will focus in greater depth on the Syrian-Iranian Business Forum activities in Syria in 2019.
In October 2018, a 50-person delegation of Syrian businesspersons and Parliament members visited Iran to participate in the Syrian-Iranian Business Forum. The delegation, which was headed by Mohamed Hamsho, Secretary General of the Federation of Syrian Chambers of Commerce, met with Iranian officials to discuss customs, investment, stock exchange, development projects, and free trade agreements.
This visit was the first of its kind since 2011. It happened after the Iranian ambassador to Damascus put significant pressure on the Syrian regime to stimulate economic relations and commercial trade between Syria and Iran, especially after the reopening of Syria’s southern Nasib border crossing with Jordan. Tehran wants to use Syria as a terminal to export Iranian goods to Arab markets through the Nasib crossing.
Iran also hopes to build relationships with prominent pro-regime Syrian merchants in order to establish business partnerships and apply for investment contracts. One example is the growing partnership between Iran and the businessman Mohamed Hamsho following the latter's purchase of the Sultan Company's share in the Syrian-Iranian automotive manufacturing company "Siamco.
The Syrian delegation to Tehran followed a number of preparatory visits by Iranian economic and political delegations to Damascus. It also followed a visit by the Syrian Minister of Electricity to Tehran, during which he announced the conclusion of various agreements related to the construction and maintenance of power plants in Latakia, Aleppo, and Deir Ezzor.
One of the most important outcomes of that visit to Tehran was the signing of an MOU between the Syrian delegation and the Tehran Chamber of Commerce for cooperation in various fields. The Syrian delegation also obtained initial approval from the Iranian side to reduce tariffs on 88 different Syrian exports from 4% to 0%.
|Secretary-general of the Federation of Syrian Chambers of Commerce||Syria||Muhammad Hamsho|
|Member of Syrian parliament||Syria||Hussein Ragheb|
|Manager of the Federation of Syrian Chambers of Commerce||Syria||Firas Jijkli|
|Syrian Ambassador in Iran||Syria||Adnan Mahmoud|
|Member of Syrian Exporters Union||Syria||Iyad Muhammad|
|Member of Syrian parliament||Syria||Muhammad Kheir Suriol|
|Chairman of the Supreme Committee for Investors in the Free Zone||Syria||Fahd Darwish|
Syrian businessmen who attending the Syrian-Iranian business council meeting
A number of Iranian officials and private sector representatives visited Damascus in January 2019 for the 14th session of the Syrian-Iranian High Joint Committee. Prior to this meeting, a number of Syrian officials and businesspersons had visited Tehran in preparation. The committee session in Damascus produced 11 signed agreements and memorandums of understanding (MOU) in various sectors:
Investment: An MOU for cooperation between the Syrian Investment Commission (SIC) and the Iranian Organization for Investment, Economic and Technical Assistance.
Transportation: An MOU between the General Establishment of Syrian Railways and the Iranian railways.
Economic: An agreement on long-term strategic economic cooperation.
Government: An MOU regarding the meetings of the High Joint Committee.
Trade: An MOU between the Syrian Ministry of Economy and Foreign Trade and the Iranian Ministry of Industry, Trade and Mine.
Construction: An MOU related to public works and construction.
Geomatics: An MOU between the Syrian General Organization for Remote Sensing and the Iranian National Geographical Organization.
Entertainment: An MOU for enhanced cooperation between the General Establishment for Cinema in Syria and Iran’s Cinema Organization.
Culture: An executive program for cultural cooperation was signed between the Syrian Ministry of Culture and the Iranian Ministry of Culture and Islamic Guidance for the years 2019, 2020, and 2021.
Banking: An MOU regarding information exchange related to money laundering and terrorism financing was signed between the Syrian Anti-money Laundering and Counter-terrorist Financing Commission and the Iranian Money Transfer Unit.
Education: An executive program in the educational field was signed for the years 2019, 2020, and 2021.
There are many private security companies in Syria. These companies provide special protection for anyone who needs security services. Some of these companies provide types of services that do not fall under the category of “security” and are instead more like private military operations, such as role played by the “ISIS Hunters” against ISIS in the Syrian desert.
On 5 August 2013, the Syrian president issued Legislative Decree No. 55 regarding licenses for private protection and security companies. Before Decree No. 55, the number of the private security companies in the country was limited. The few private security companies that did exist were primarily funded by well-known businessmen and their main duties were providing security to banks, shopping malls, and sometimes musical concerts. Starting in early 2017, new private security companies began to emerge with much important tasks as well as stronger international allies or even foreign indirect ownership.()
Agencies and sectors that are concerned with Legislative Decree No. 55:
In order to receive a license, a private security company must meet the following conditions:
Additionally, the owners, partners, and management of the company shall be required to:
Private security companies are classified into three categories:
1st category: companies that have 801 guards and above.
2nd category: companies that have between 501-800 guards.
3rd category: companies that have between 300-500 guards.
|English Name||Arabic Name||License Date||HQ||International Relations|
|Professionals Company||شركة المحترفون||29 April 2012||Damascus||Independent|
|Shorouk||شركة شروق||12 November 2012||Damascus||Independent|
|Al-Husn||شركة الحصن||23 March 2013||Latakia||Independent|
|Qasioun||شركة قاسيون||28 October 2013||Damascus||Iran|
|IBS||IBS||27 November 2013||Damascus||Iran|
|Al-Watania||شركة الوطنية||28 March 2016||Damascus||Russia|
|ISIS Hunters||صيادين الدواعش||16 March 2017||Hama||Russia|
|Al-Qalaa||شركة القلعة||10 October 2017||Damascus||Iran|
|Al-Areen||شركة العرين||19 October 2017||Damascus||Russia|
|Sanad||شركة سند||22 October 2017||Damascus||Russia|
|Fajr||شركة فجر||02 January 2018||Aleppo||Iran|
|Alpha||شركة ألفا||15 February 2018||Aleppo||Iran|
|Al-Hares||شركة الحارس||08 May 2018||Damascus||Iran|
The power of each company is related to the number of secured locations it has, the type of operations it does, and the weapons and armored vehicles that it owns.
Shorouk Company for Security Services (Independent)
Shorouk was established on 12 November 2012. It is run by retired state security officers and its guards have played a major role in suppressing many demonstrations in Damascus. The company has maintained its independence despite the fact that Iran has made several offers to the company’s board members to try and gain their loyalty. Shorouk’s headquarters is in the governorate building in al-Zahra, Damascus.
|Shorouk Company Board Members|
|Retired Brigadier||General Gamal el-Din Habib|
|Retired Brigadier||Brigadier Ragheb Hamdoun|
|Retired Lieutenant||Colonel Ali Younis|
These officers, known for their good relations with Hafez Makhlouf and Yasser Qashlq, played an essential role in the events of Hama in 1982. The most important of these officers is Ali Younis, who was the most powerful figure in state security before retiring as a lieutenant.
|Main Contracts in 2017/2018|
|Al-Khair markets||Ein Tarma - Damascus countryside|
|Restaurant and nightclub Areas||Bab Touma in Damascus city|
|Sham City||Kafr Suseh in Damascus city|
|Cusco Mark||Restaurant chain in Damascus and Aleppo cities|
|Ski Land||Shami Village|
|Al-Badia Cement Factory||Abu Shammat area in al-Dumayr|
Shorouk has more than 2,000 employees, including the administrative and security personnel, and they all wear a special uniform with a logo of the company.
The security personnel are paid according to their specific tasks, with a salary range between 1,500 to 4,000 SP per day.
ISIS Hunters is a private security company formed, funded, and trained by the Russian military in Latakia to fight ISIS in the Syrian desert on the beginning of 2017, and after that the Wagner group took over responsibility for their training. ()
Originally, the ISIS Hunters’ main task was protecting the liberated gas and oil fields in western Palmyra, along with the weapons storage facilities near the T-4 Military Airport.
However, the activities of the ISIS Hunters quickly expanded into combat engagements including the liberation of the city of Palmyra and then crossing the Euphrates to clear ISIS from its eastern bank.
In its initial stages, the ISIS Hunters served more as a private entity within the Syrian Army (Russian military advisor in Khmeimim airbase instructed that) and its only task was to fight ISIS. This role changed after the company’s official registration in March 2017 under Decree 55.
In 2018, ISIS Hunters became more like a private security company but they maintained special privileges to use the army’s equipment because of their initial role fighting ISIS.
After the Syrian military and its allies captured Palmyra in 2017, the Russian-backed ISIS Hunters were tasked with guarding the town against the return of ISIS, clearing the environs, retaking the Palmyra gas fields, and keeping roads such as the Homs-Palmyra highway open. When the Syrian military and its allies lifted the siege of the Deir Ezzor military airport on 10 September 2017, the ISIS Hunters were occupied with clearing the area around Kusham on the east bank of the Euphrates, around 15 kilometers southeast of Deir Ezzor city. On 17 November 2017, the ISIS Hunters announced that they had fully secured Kate Island north of the city of Deir Ezzor and captured 250 ISIS fighters.
Currently, the ISIS Hunter main tasks include: securing the pipelines in eastern Homs, maintaining a presence in al-Talaa Camp in Deir Ezzor, and securing all the checkpoints between the Syrian regime and Syrian Democratic Forces (SDF) in Deir Ezzor province. Their most recent military activity was a very limited role in the battles of Eastern Ghouta in 2018.
Al-Qalaa Company was established on 10 October 2017 and is managed by the Syrian businessman Mohammed Dirki. Like several other similar companies, in the beginning al-Qalaa had a very limited scope of work. In February 2018, a group of security men and women from al-Qalaa in black uniforms equipped with small machine guns were spotted in the Sayyida Zainab Distract of Damascus. Their main role was to secure a Shi’ite convoy from Iran, Lebanon, and Iraq that was visiting the Shi’ite holy sites. Iran’s main reason for creating and funding al-Qalaa was to protect these pilgrimage convoys, after several incidents in which Shi’ite convoys were targeted by in improvised explosive devices (IEDs) in Damascus city.
After the Syrian military and its allies recaptured more of the Syrian desert and Eastern Homs Desert they simply required more forces to secure these areas, in April 2018 the Syrian Interior Ministry (and Russia) approved al-Qalaa to be equipped with advanced weaponry in order to assist other groups such as the ISIS Hunters in securing the road, pipelines, and other locations in the desert.
Immediately after al-Qalaa was granted this contract, they received 25, 4x4 advanced trucks equipped with heavy machine guns, and were deployed to eastern Homs, southern Raqqah, and parts of the main Deir Ezzor-Homs highway.
Short Promotion video published on April 2018, https://goo.gl/c9ErhM
During the 2018 Damascus International Fair, al-Qalaa general manager talked about how the company had expanded their services and starting in May 2018, they provided the following:
() "Wagner group" is a Russian paramilitary organization associated with Yevgeny Prigozhin, a Russian oligarch and close associate of President Vladimir Putin. Vagner commanders have fought for the company both in Syria and, before that, in support of Russia-backed separatists in eastern Ukraine.
Map 1: Updated situation map of Idlib, western Aleppo and northern Hama
- M4 and M5 highways are considered one of the main strategic targets for any possible attacks from the Regime and his Iranian allies.
- Internal border crossings are trading hubs between areas under regime control and areas under opposition control. Currently these borders are closed by the regime for different reasons, except "Qalat Al-Madiq" in Sahel Al-Ghab was partially opened in the last few days to allow the last IDPs convoy from the south to enter Idlib.
- On 13 August, Russian Military Police took over both "Qalat Al-Madiq and Mourek" corresponding internal border crossing sites in regime areas replacing the Syrian Army’s 4th Division (Affiliated with Iran).
Navvar Saban "Oliver" at Omran for strategic Studies Military Expert and the Information Unit manager, recent interview entitled "Syrian refugees are unwelcome in the Israeli-occupied Golan Heights" by TRTWorld via lcmporter, in the article Saban talked the following points:
1- 1. Russia is pushing for reconciliation – they want people and fighters to stay in their cities
2- 2. They don’t want to create some kind of a gap that will be filled by Iran-backed militias.
3- 3. Whenever there is a gap because of evacuation, Iran-backed militias are expert now in filling this gap.
That is a major problem for the Russians right now, especially in the south.
On the 25th of July, Dr. Ammar Kahf, the executive director of the Omran, commented on latest developments in southern Syria to USA Today, by stating that the regime’s territorial gains in Daraa has put Iran and Hezbollah closer to being a threat to Israel and regional powers.
This development will increase the likelihood of greater conflict in the Middle East. Developments in Daraa are also signs of a new era in the Syrian conflict, where domestic actors have largely disappeared and given way to international and non-state actors using Syria for their own agenda.
Dr. Kahf has stated that “The story of the armed Syrian opposition is over, Iran and Hezbollah are much stronger today than a month ago and closer to the southern front. I think this (Syrian conflict) will continue to escalate.”
Special thanks to the co-writers of the Article, Jacob Wirtschafter and Gilgamesh Nabeel.
On the 29th of June, Omran military expert Navvar Şaban joined the Former brigadier in The strait talk in TRT world talking about the recent development in Syria, mainly about Manbij agreement and the situation in the southern fronts, and at the end of the show Navvar explained how Iran is trying to integrate its current Militias within the structure of the Syrian Forces.
Map of Control and Influence in Syria:
Pro-YPG sources said that Kurdish forces had repelled Turkish attacks in the districts of Rajo and Bulbul, and claimed that more than 20 Turkish-backed fighters were reportedly killed there.
February 5: A massive Kurdish military convoy entered the Afrin region to support the YPG in its fight against the Turks. As a result, many issues were raised:
2. Syrian regime and pro-Iran forces, as well as US-backed forces, are reportedly amassing troops and fortifying their positions in the Euphrates region. According to both pro-opposition and pro-government sources, the two sides are preparing for possible skirmishes in the area.
3. February 10: Israeli airstrikes destroyed nearly half of the Syrian regime’s air defenses, according to the Israeli newspaper Haaretz, which cited “senior Israeli Defense Forces officials” in the article on February 14. An Israeli F-16 was shot down during the airstrike; however, Israeli officials considered the operation a success.
February 12: AnIsraeli military official said that an Iranian drone shot down 10 February 2018, ago was based on a US stealth RQ-170 UAV, which was captured by Iran in 2011. Iran started production of this drone in 2016.
Idlib is currently the site of increasing competition between the two most dominant armed coalitions, the al-Qaeda-linked Hay’at Tahrir al-Sham (H.T.S.) and Ahrar al-Sham. The province has witnessed limited airstrikes since a de-escalation agreement, which came into effect on May 5, was brokered by Russia, Turkey, and Iran at the Astana talks. Idlib was one of four areas labeled as a de-escalation zone.
The agreement has, however, prompted a contest between H.T.S. and Ahrar al-Sham, with both groups vying to increase their influence and control new areas. The competition between them has three dimensions: military, economic, and social.
For strategic, economic, and military reasons, H.T.S. has focused efforts on controlling vital towns, specifically along the Syrian-Turkish border on the western side of the province. H.T.S. fighters that shifted to the region from losses in Aleppo and Homs were deployed carefully in areas where the al-Qaeda affiliate wanted to increase influence, particularly along the northwestern border.
The “smuggling” route along the border from Harem to Darkoush is totally controlled by H.T.S., which uses it to transport oil and other goods. The mountainous nature of the area and its many caves also allow H.T.S. to thwart any attack or attempts by Ahrar or any other group to assert control in those territories.
Though H.T.S. controls military bases in the area, such as Taftanaz, to the northeast of Idlib, and Abu Dhour, southeast of Idlib, the group faces challenges in governance. Lacking communal support and strong governing skills, H.T.S. can’t fully control major cities like Idlib, Maarat al-Noaman, and Saraqib. Even in smaller towns like Kafranbel, where civil society has been active, H.T.S. has also failed to maintain a tight grip.
The experience of Maarat al-Noaman is an example of how local communities have played a major role in confronting H.T.S. Since February 2016, civil society has actively mobilized against al-Qaeda’s presence, first against Jabhat al-Nusra, as they were called at the time, and later against present-day H.T.S. The group was unable to control the city or defeat armed opposition groups largely due to the local community’s support for the armed groups. “It is not the armed groups there that protected civil society and the local community, it’s the community that prevented H.T.S. from defeating the armed opposition inside the city,” said Basel al-Junaidy, director of Orient Policy Center.
The only large city H.T.S. has been able to control is Jisr al-Shughour, in part because the armed groups surrounding the city are loyal to Abu Jaber, the former leader of Ahrar al-Sham who defected to H.T.S. earlier this year.
Following increasing pressure from Turkey to protect its borders, H.T.S. delegated to Ahrar al-Sham control over parts of the northwestern border near the town of Salqin. However, H.T.S. still enjoys influence there, and Ahrar still needs H.T.S. approval to appoint the leader of the group assigned to watch the border in that area.
Yet the current map could also be misleading. There are areas where H.T.S. has presence, but struggles to maintain control, and there are areas where it does not yet have a presence, but could expand power if threatened. For example, the main border crossing between Idlib and Turkey is Bab al-Hawa. It is controlled by Ahrar al-Sham, but H.T.S. controls the route leading to the crossing through several checkpoints, and has the capability to attack the border crossing and seize control at will.
In the north, Sarmada is becoming the economic capital of Idlib. H.T.S. controls most of the decision-making there with regards to regulations like money transfers, the exchange rate, and the prices of commodities like metal and oil. On the other hand, H.T.S. is weakest in southern Idlib, from the borders of the Hama province to Ariha, the social base for Ahrar al-Sham.
H.T.S. governs through its General Directorate of Services, which competes with several other entities to provide services. These competitors include Ahrar al-Sham’s Commission of Services, local councils under the umbrella of the opposition interim government, independent local councils, and civil society organizations. A recent study conducted by the Omran Center shows that there are 156 local councils in the province of Idlib; 81 of them are in areas where H.T.S. has a strong presence. As highlighted above, however, H.T.S. doesn’t enjoy equal control over all of these councils. While in some instances the group has comprised whole councils—as in Harem, Darkoush, and Salqin—in other councils, H.T.S. is only able to influence some members.
Due to the de-escalation zones agreement, H.T.S. currently finds itself in a challenging position. When the Nusra Front established its presence in Syria, it promoted itself as the protector of the people. Escalating violence helped the group gain legitimacy and sympathy, and many armed groups found a strong ally in the al-Qaeda affiliate as battles raged against the regime. As front lines become quieter, H.T.S. is beginning to lose its appeal.
The H.T.S. alliance also faces internal threats. The dynamics are changing between Nusra and the Nour al-Din al-Zenki movement, the second largest component of H.T.S. On June 2, Hussam al-Atrash, a senior leader of Zenki, tweeted that areas out regime control should be handed over to the opposition interim government, and all armed groups should dissolve. Atrash justified his suggestion as the only way for the Sunni armed opposition forces to survive. The comments irritated H.T.S. leadership, which referred Atrash to the H.T.S. judiciary. The tweets disappeared shortly thereafter.
Following that incident, H.T.S. banned all fighters from mentioning any subgroup names, like Zenki, to enforce unity. However, it is unlikely that H.T.S. will be able to maintain long-term enforcement. No opposition military alliance has been able to survive throughout the Syrian conflict, and subgroups continue to migrate from one umbrella to another for tactical reasons, seeking military protection and/or new funding opportunities.
While H.T.S. faces these internal and external challenges, it is also evolving. Its leadership clearly realized the importance of building stronger connections with local communities in order to compete with Ahrar al-Sham. H.T.S. adopted new tactics in governing. Instead of appointing foreigners or military leaders, H.T.S. has appointed local civilians as its representatives in most of the towns under its control in Idlib.
H.T.S. and Ahrar will continue to compete in governance and service provision, which is key to building loyalty, increasing influence, and widening public support. The groups are also cautiously following regional and international developments as they prepare for different scenarios. If the de-escalation agreement collapses or an external force intervenes in Idlib, all dynamics will certainly change. Ahrar and H.T.S. might confront each other, become allies, or re-shuffle their respective coalitions. The situation in Idlib is far from stable.