A U.S.-led Western Hemisphere ministerial on counterterrorism this week discussed Hezbollah's activities in Latin America, with some analysts suggesting member countries are stepping up efforts to prevent the Lebanese militant group from funneling funds from the region to make up for the money lost from close ally Iran because of U.S. sanctions.
The ministerial conference, which took place Tuesday in Washington, was hosted by U.S. officials and attended by senior officials of 13 U.S. partners across the Americas. The countries discussed the threats transnational terrorist organizations, including Hezbollah, the Islamic State and al-Qaida, pose to the security of the Western Hemisphere.
Nathan Sales, the U.S. State Department's coordinator for counterterrorism, in a press briefing Wednesday said recent U.S. sanctions had cut into Iran's disposable income, which previously gave Hezbollah an estimated $700 million a year. He said the group would most likely try to compensate for the lost revenue by stepping up its fundraising networks across the Middle East, Africa and South America.
Money goes elsewhere
"We've seen evidence that as we have tightened the screws on Iran by imposing sanctions, we know that the money that otherwise would have been made available to Hezbollah has to go to other purposes, which makes it even more important for us and for our partners to use our own efforts to cut off the sources of money that Hezbollah will be looking to use to make up for the revenues that they're losing as a result of sanctions on Iran," Sales told reporters during an online briefing.
The U.S. government has reimposed a series of sanctions against the Iranian regime and its allies in the Middle East since May, when U.S. President Donald Trump withdrew from the 2015 Iran nuclear deal, in which Iran agreed to curtail its nuclear program for international sanctions relief.
The U.S. Treasury Department so far this year has designated 31 individuals and entities linked to Hezbollah, including Jawad Nasrallah, the son of Hezbollah's leader, Hassan Nasrallah, as global terrorists.
Drug cartels
Sales warned Hezbollah could try to establish greater ties to Latin American drug cartels to move personnel and funnel money back home.
The Lebanese militant group has been active in South America since the early 1980s. It has used its influence in the region to recruit Latin America's Lebanese diaspora, known in the region as "turcos," and other Muslim populations.
In 1992, the Iran-backed group bombed the Israeli Embassy in Buenos Aires, which left 29 people dead and 242 others injured. In another bombing in 1994, it targeted the Argentine Israelite Mutual Association, a Jewish community center in Buenos Aires, killing 85 and injuring more than 300.
But in recent years, the group has shifted its focus from bombings to raising money by joining South America's lucrative drug-trafficking businesses.
There is no official data about how much money the group makes via dealings with organized crime in South America because of the nature of the illicit business. Officials estimate, however, about one-third of the group's revenues come from the region, particularly in its stronghold Tri-Border Area of Argentina, Paraguay and Brazil.
Money laundering
Emanuele Ottolenghi, a senior fellow with the Foundation for Defense of Democracies in Washington, said Hezbollah is receiving approximately $200 million a year in the Tri-Border Area alone through its laundering schemes that are responsible for moving about $600 million annually.
Ottolenghi said recent steps taken by governments across the Western Hemisphere, including the ministerial conference this week, suggest that 2019 could be the year Hezbollah faces more pressure in the Americas. He said there are two reasons "we can begin to detect some change."
First, "the Trump administration has started to raise the temperature on the subject of Hezbollah in Latin America. They have made considerable investment in resources to help local governments recognize the threat and start taking action," Ottolenghi said.
"The second reason is that you have new governments, especially in the southern zone, that for a variety of reasons are today more willing than ever in the past to take action," he added.
During his remarks Tuesday at the ministerial, U.S. Deputy Secretary of State John Sullivan praised progress made by South American countries to limit the activities of Hezbollah and other terror groups. But more needs to be done, he added.
"Our safety depends on working with all of you on security as we continue to improve our own. We must learn from one another to develop our tools and policies, and to be both faster and smarter than those who wish to harm us," Sullivan said.
Use of casinos alleged
Last July, Argentina's Financial Intelligence Unit initiated an administrative assets freeze against 14 Lebanese nationals and Tri-Border Area residents accused of using casinos to launder money and funnel it to Hezbollah.
In September, Brazilian police arrested Assad Ahmad Barakat, one of the major financial backers of Hezbollah, whose clan reportedly made purchases worth $10 million at a casino in the Argentine city of Iguazu with the intent of laundering Hezbollah's money.
Matthew Levitt, a senior fellow at the Washington Institute for Near East Policy, said the renewed efforts by governments across the Western Hemisphere could help prevent Hezbollah from returning to violent attacks of the 1990s.
"There is the issue of potential operations," said Levitt. "There was a plot that was thwarted in Peru in 2013 and also about three years ago in Bolivia. So, authorities are for good reason concerned about those long-standing activities."
