Strategy Nord Analysis Note
Lebanese Hezbollah's Illicit Activities and International Networks
Lebanese Hezbollah's Illicit Activities and International Networks
This analysis explores the world of Hezbollah's intricate and obscure global financial networks - a world that has received no significant in-depth coverage within global media circles.
In our analysis, Strategy Nord organises the greater Hezbollah networks and their associates, beginning from the time of their formation and continuing through their attainment of an advanced stage of effectiveness, which has made Hezbollah one of most financially independent and powerful non-governmental organisations on the face of the earth.
Additionally, we attempt to form a review of the evolution and potential development of Hezbollah within the national, regional and global stage.
Hezbollah is a multi-faceted, perceived by some to be a terrorist organisation with radical ideals. To others, Hezbollah is a charitable force for good, a moderate force within politics, and inclusive in nature. The organisation has moved away from the core values that initially justified its participation in politics. This transition has been essential to political prosperity and has resulted in increased influence both domestically and internationally.
The organisation was founded in 1982 as an Iranian inspired response to the historic marginalisation of Shi'a groups within Lebanon. Since 1992, Hassan Nasrallah has been the Secretary-General of Hezbollah; of which he and the decision-making Shura Council make up the leadership element of the organisation. Hezbollah's declared commitment to and fondness for the Islamic Revolution contributed from the beginning to its association with Tehran – a bond that neither party has endeavoured to hide in any case. This led to the widespread belief that Hezbollah was fundamentally an Iranian project seeking to extend its hegemony and present itself to be a dominant force on Israel's northern border. Therefore, it was not surprising that Tehran was the one that trained the first vanguard of Hezbollah fighters using IRGC personnel brigades that streamed into Lebanon in coordination with the Syrian Government, which controlled the country at that time.
With an extensive social support network and prominent political party, Hezbollah is considered by many to be a state within a state. Additionally, since the emergence of Islamic State in Syria and increased threat within Lebanon, Hezbollah's military wing has emerged as Lebanon's defacto 'spearhead lead element,' subsequently resulting in the Lebanese Armed Forces being assigned border security and logistical roles within vulnerable border areas.
From Hezbollah's inception, its approach to organisational and operational security has continued to develop. After the 1980's, Hezbollah's focus shifted from being international to being more domestic. An aspect of Hezbollah's success is its strict operational security; which is largely assessed to be a mirror image to the same principles employed by the IRGC Qods Force. It is known that the IRGC Qods Force enforce a strict policy of operational compartmentalisation with regards to minimising the risk from leaks.
The conflict of 2006 highlighted the apparent differences in operational security between Hezbollah and the Israeli Defence Forces. There were numerous Israeli operational secrets leaked, however, nothing was observed to have been disclosed from the Hezbollah side.
Iranian Financing of Hezbollah
In light of Hezbollah's unrelenting commitment to Iran, Iranian support in money and military materiel was a crucial issue for Hezbollah at the time of its establishment. Iran has always stood ready to provide assistance to Hezbollah, and recent estimates indicate that Tehran has provided a fixed contribution of no less than US$ 100 million annually to Hezbollah since its inception.
Timeline of Iranian Financial Support to Hezbollah
Hezbollah Succeeds in Lebanese Elections
Prior to the outcome of the 2005 Lebanese General Election, Iran pledged Hezbollah leader Hassan Nasrallah with US$10 Million in aid for a total of ten years.
Iran further increases the amount of financial aid to Hezbollah to US$ 300 Million per year immediately following the outbreak of hostilities between Hezbollah and Israel.
Sanctions against Iran
Tehran decreases the overall level of funding towards Hezbollah due to declining global oil prices and introduction of US and EU sanctions regarding Iran's nuclear ambitions.
Outbreak of Syrian Civil War
Iran once again increases the level of financial support to Hezbollah following the outbreak of the Syrian Civil War and their subsequent deployment of forces to secure Lebanon's border areas and key transit routes linking Damascus International Airport to the capital city.
Financial aid reaches it's peak
Unconfirmed reports citing a human intelligence source indicates that Hezbollah's budget is valued at US$1 Billion, with 70% reportedly being provided by Iran.
Russia commits forces to Syria
Iran once again decreases the level of financial support to Hezbollah following the deployment of Russian military forces to Syria and the acceleration of Iran-backed Iraqi Popular Mobilization Units to remove the Islamic State from Salah al-Din and al-Anbar.
Iran seeks to recover frozen assets
An increase in funding to Hezbollah by Iran is observed in 2016 following reports indicating that Iran has allocated US$ 600-700 Million to help recover frozen assets following the implementation of the Joint Comprehensive Plan of Action.
Hezbollah maintains an active presence across the globe, engaging in a wide range of activities which appears to be focused on enhancing their intelligence gathering capability and monetary revenue. However, recent intelligence reports highlight that Hezbollah has increased its level of engagement and cooperation with international organised crime groups, likely in an attempt to further enhance their sources of income. The Lebanese diaspora is widely scattered and wherever it is found, Hezbollah is likely to have a presence to some degree.
Historically, both Iran and Syria have provided significant support to Hezbollah, both financial and logistical. Much of the support originates in Iran, though Syria is home to the IRGC Qods Force-operated 'Joint Watch Center,' a facility that coordinates joint IRGC and Hezbollah activities in addition to maintaining an early warning capability with regards to Israeli activity within the region. Across the wider region, Hezbollah maintains an active presence in Egypt, Iraq, Kuwait, Bahrain and Yemen.
West and Central Africa
Following the spread of the Lebanese diaspora, Hezbollah has an established presence across West and Central Africa. Their presence within the region is known to be a critical factor that enables the collection of financial aid from local Lebanese businesses and criminal activity. The majority of the Lebanese diaspora in West and Central Africa is reportedly concentrated around Senegal and Cote d'Ivoire. Previously, it was believed that Hezbollah had an association with the former President of Liberia, Charles Taylor, infamous for his involvement in corruption, on a global scale, especially the illegal diamond trade.
Central and South America
Latin America is assessed to be a critical area of interest for Hezbollah, predominantly from a financial perspective. Their presence in the region is largely concentrated in Venezuela; however, reports have indicated their presence in the ungoverned space known as the tri-border area, the confluence of Brazil, Argentina and Paraguay. Hezbollah's presence in South America, home of the vast majority of the Lebanese diaspora's citizens, is assessed to have been aa critical enabler that helped to facilitate a plan by the IRGC Qods Force to conduct two attacks in 1992, which targeted the Israeli Embassy and the Argentinian-Jewish Friendship League in Buenos Aires, both of which left more than 100 dead and nearly 600 injured. In 2008, law enforcement forces in the United States and Colombia unexpectedly detained nearly 130 individuals suspected of being members of a cell formed from an alliance among a famous Colombian drug syndicate known as "North Valley," an armed leftist militant organisation comprised of former and current members of FARC and a group of smugglers of Lebanese origin. Two years before, the United States and Colombia had launched a joint investigation, known by the operational codename "Titan," with the goal of pursuing networks that smuggled drugs from Colombia to the US, Europe and the Middle East. The investigation soon centred on the leader of the "North Valley" group, an individual of Lebanese origin called "Shukri Harb." Harb's network supplied 12 per cent of its revenues in cash directly to Hezbollah. Furthermore, several reports highlight a growing Hezbollah presence in Mexico, with many indicators pointing to a developing relationship between the organisation and Mexican drug cartels, especially Los Zetas.
Hezbollah maintains an active presence in Europe and recent reports indicate a continued focus on the group to target prominent Israeli nationals and Jewish figures. The most prominent attacked occurred in 2013 when a member of Hezbollah's External Security Organisation (ESO) attacked a bus carrying Israeli tourists in Burgas, Bulgaria. Hezbollah attempted and successful attacks in Europe indicate a continued intent to conduct violent operations in concert with raising funds through a variety of criminal enterprises dotted throughout Europe.
Finance and Fundraising
To fund the large scale and wide-ranging activities that Hezbollah undertakes, they consistently require access to substantial financial backing. Whilst Iran is known to provide the majority of financial backing to Hezbollah, the remainder of their revenue sources remains largely close-guarded. The five main funding sources Hezbollah draws on are widely regarded to be: Iran, Zakat, expatriate communities, organised crime, and charity. The below list provides an indication of the administrative, operational and subsidiaries which help explain how Hezbollah's extensive budget is distributed amongst its services:
As an organisation, Hezbollah has constantly evolved since its inception in 1982. This has been strategically true in their areas of operation, their political agenda and the tactics, techniques and procedures: for instance, it was quick to develop an online presence. Hezbollah has had the advantage of extensive resources from Syria and Iran. They have taken advantage of this breathing space they have learnt effectively from their enemies, developing new tactics, techniques and procedures, and building up community support.
Hezbollah has multiple funding streams, but each one has its own advantages and disadvantages. Hezbollah's biggest single benefactor is Iran; a factor which may also present the organisation with constraints due to Iran's own regional and international agenda. There is much discrepancy in reporting as to how dependant Hezbollah is on Iran's financial backing. As there are no specifics, only estimates on Iran's funding and Hezbollah's budget, it is hard to ratify this quantitatively, especially as the majority of Hezbollah's Iranian funding goes through Iran's Saderat Bank in Tehran, which is far less transparent to external scrutiny. In addition to this state-level support, there is also significant legitimate funding of Hezbollah through the Islamic Zakat, one of the five pillars of Islam, which represents a charitable tax on Muslims. There are well-documented cases of Hezbollah operatives being detained for conducting global criminal activities in order to raise funds. However, Hezbollah's criminal activities appear to have become more resilient to Western law enforcement efforts.
Hezbollah is all but defined by its relations with three key actors, Iran, Israel and to a lesser degree Syria. Outside of these three loci, Hezbollah is known to operate in areas across the world, though not always manifesting itself as a terrorist threat. Most frequently, Hezbollah is active as a fundraiser, operating through links with international organised crime. In essence, wherever the Lebanese diaspora exists, Hezbollah is likely to have a presence.