Hezbollah has failed to carry out a successful, high-profile terrorist attack in the western hemisphere since the Argentinian Israelite Mutual Association center bombing in Buenos Aires in 1994. Some misconstrue this apparent absenteeism to mean they do not operate in the region. When you say “Hezbollah in the Americas,” policymakers roll their eyes. This reaction misunderstands Hezbollah’s primary aim in the Americas. For decades, Hezbollah operatives have been quietly infiltrating Latin America, for the primary purpose of raising money to send to the fight back home.
Showing their value as the Iranian supreme leader’s most effective proxy, Hezbollah has become the contractor of choice for mafia activities abroad. Through networks of shell companies, courier systems and friendly relationships with adversarial nations like Venezuela and Nicaragua, they are carrying out the money-laundering operation for a significant portion of the region’s illicit trade in drugs, weapons and human trafficking.
Charging fees of up to 14% per transaction, the terrorist organization is raking in an estimated $400 million a year from servicing the drug trade alone, and it probably orders on a magnitude above that. This revenue then funds Hezbollah activities targeted against Israel.
The service they provide drug cartels involves hijacking international trade markets to mask their illicit transactions – a process called Trade-Based Money Laundering (TBML).
This complex practice washes illicit money by transferring the funds through thousands of shell companies using fake or inflated invoices or switching out products – a flip phone instead of a smartphone – and pocketing the difference.
If you need to transfer $1 million to a drug supplier, have his shell company pay yours $2 million for $3 million worth of cell phones. The supplier comes away with the $1 million in value you owe them. This is extremely difficult to distinguish from legitimate trade; especially for our overburdened Customs and Border Agency.
AS HEZBOLLAH and the cartels are becoming more sophisticated, our response to them must as well. If you want to take down a criminal enterprise, go after the money. If we can expose patterns and separate TBML from legitimate trade, we can cripple Hezbollah, which will keep ourselves and our allies safer.
This requires a sophisticated approach. Modernizing customs would create greater transparency into individual shipments. Full government coordination would allow the Customs and Border Agency to work with the Treasury Department, Commerce Department and Justice Department to apprehend and prosecute violators. Using modern tools such as blockchain and artificial intelligence gives us the ability to see and analyze information and root out illicit trade.
My office is working to implement these solutions through Customs modernization legislation, commissioned research to identify weaknesses and responses, blockchain pilot projects and the like – all seeking to deny Hezbollah access to the US economy. Hezbollah’s TBML operations require incredibly large economies of scale to be profitable. The US’ $22 trillion economy is naturally the largest target for money launderers. Denying Hezbollah and other TBML organizations access to our networks would deal a significant blow to their ability to operate.
Most importantly, like in many industries, the rest of the world follows America’s lead. If we are successful in creating a model to combat these sophisticated TBML and financing schemes, we can deny Hezbollah the money they need to continue to target Israel, continuing in our steadfast bipartisan commitment to guarantee the security of our most important ally, and the only democratic country, in the Middle East.
The writer is a Republican US senator from Louisiana.