On 11/1/2018, the U.S. Department of Justice announced the creation of the “Hizballah Financing and Narcoterrorism Team”, a group of experienced international narcotics trafficking, terrorism, organised crime, and money laundering prosecutors and investigators who are tasked with investigating individuals and networks providing support to Hizballah and pursuing prosecutions in appropriate cases.
This initiative is one of many outcomes of the U.S. Financial Sanctions Related to Hizballah which the American administration have put in place over the last years.
The U.S. Financial Sanctions Related to Hizballah (which should be differentiated from the U.S. Financial Sanctions Related to Lebanon) are a series of legal instruments originated by the U.S. Congress, an institution concentrating all the legislative powers according to Article I of the U.S. Constitution.
The abovementioned legal instruments, constituting the substance of the sanctions, will be separately discussed hereunder and in a chronological manner. The instruments are the following:
- Hizballah International Financing Prevention Act of 2015
- Hizballah International Financing Prevention Amendments Act of 2017
- Iran and Hizballah Western Hemisphere Prevention Act of 2017
- Urging the European Union to designate Hizballah in its entirety as a terrorist organisation and increase pressure on it and its members
- Sanctioning Hizballah’s Illicit Use of Civilians as Defenceless Shields Act
- Hizballah Kingpin Designation Act
In order to grasp the real value and reach of the abovementioned sanctions, one has to understand first how the legislative process in the U.S. is designed, since the status of each of the aforementioned legal instruments will depend on its position in the legislative process.
The U.S. Congress is bicameral, composed of two chambers (House of Representatives and Senate) basically equal in their legislative roles such that the enactment of any law always requires both chambers to separately agree on the same bill before presenting it to the President for execution.
The engine of U.S. legislative action is the Congress, but the President has also influence in the legislative process: he has the power to veto any legislation, so the Congress must generally accommodate the president’s position on proposed policies.
The process by which a bill becomes law can vary from one bill to another, but the process usually follows a sequence of common congressional stages that make up the legislative process: Introduction of the bill to the Congress, approval of the House of Representatives, approval of the Senate, presentation to the President, bill becomes law after publication.
This Act was made Public Law on 18/12/2015 and has not been amended since.
It states that it shall be U.S. policy to:
- prevent Hizballah’s global logistics and financial network from operating in order to curtail funding of its domestic and international activities; and
- utilise diplomatic, legislative, and executive avenues to combat Hizballah’s criminal activities in order to block that organization’s ability to fund its global terrorist activities.
The Law requires the President to report to the Congress on:
- satellite, broadcast, Internet, or other providers that have knowingly entered into a contractual relationship with al-Manar TV (an entity controlled by Hizballah) and its affiliates; and
- the identity of those providers that have or have not been sanctioned pursuant to Executive Order 13224 (see below).
The President is also mandated to report to the Congress on Hizballah’s narcotics trafficking worldwide. He is specifically required, within 30 days of submitting such report, to brief the Congress on:
- the submitted report,
- procedures for designating Hizballah as a significant foreign narcotics trafficker, and
- government-wide efforts to combat Hizballah’s narcotics trafficking.
Moreover, the President is mandated to report to the Congress on Hizballah’s transnational criminal activities, including human trafficking. He is specifically required, within 30 days of submitting such report, brief Congress on:
- the submitted report,
- procedures for designating Hizballah as a significant transnational criminal organisation, and
- government-wide efforts to combat Hizballah’s criminal activities.
The President is also required to report to the Congress regarding:
- countries that support Hizballah, countries in which Hizballah maintains important portions of its global logistics networks, or in which Hizballah conducts significant fundraising, financing, or money laundering activities;
- an assessment of whether a country’s government is taking adequate measures to disrupt Hizballah’s networks and activities within that country, and if not, the reasons it is not taking such measures and a description of U.S. measures to encourage the improvement of such measures; and
- methods that Hizballah, or any of its agents or affiliates, utilises to raise or transfer funds, including trade-based money laundering, the use of foreign exchange houses, and free-trade zones.
The President is authorised to prohibit or impose strict conditions on the opening or maintaining in the United States of a correspondent account or a payable-through account by a foreign financial institution that knowingly:
- facilitates a transaction or transactions for Hizballah;
- facilitates a significant transaction or transactions of a person on specified lists of specially designated nationals and blocked persons, property, and property interests for acting on behalf of or at the direction of, or being owned or controlled by, Hizballah;
- engages in money laundering to carry out such an activity; or
- facilitates a significant transaction or provides significant financial services to carry out such an activity.
The President may waive the application of a prohibition for up to 180 days, renewable for an additional similar period, if such waiver is estimated in U.S. national security interests, and with notification of the Congress.
The President is not required to apply sanctions to a foreign financial institution if he certifies to the Congress that such institution is no longer, or is taking significant steps towards no longer, engaging in the prohibited activity and after he has received reliable assurances from the government with primary jurisdiction over the institution that the institution will not engage in such activity.
The Department of the Treasury is required to notify the Congress every 180 days of each foreign central bank that carries out a prohibited activity, together with a detailed description of each activity.
The Department of State is required to report, and provide an annual briefing, to the Congress regarding actions taken through the Department’s rewards program to obtain information on Hizballah’s fundraising, financing, and money laundering activities.
The Department of State, Department of the Treasury, and other federal departments and agencies are required to brief the Congress, every 180 days, on the disposition of Hizballah’s assets and activities related to fundraising, financing, and money laundering.
This Law ceases to be in effect 30 days after the President certifies to the Congress that Hizballah:
- is no longer designated as a foreign terrorist organisation; and
- is no longer listed in the Annex to Executive Order 13224.
After the terrorist attacks in New York and Pennsylvania, and on the Pentagon committed on 11/9/2001, U.S. President George Walter Bush signed Executive Order 13224 (relating to blocking property and prohibiting transactions with persons who commit or support terrorism) on 23/9/2001 giving the U.S. government a tool to obstruct terrorist funding. This tool allowed to disrupt the financial support network for terrorists and terrorist organisations by authorising the U.S. government to designate and block the assets of foreign individuals and entities that commit, or pose a significant risk of committing, acts of terrorism.
Originally, 29 individuals and entities were designated by the President and listed in an Annex to Executive Order 13224. One year later, Executive Order 13268 dated 2/7/2002 provided authority for the designation and blocking of assets of additional individuals and entities. For that purpose, Executive Order 13268 authorised both the Secretary of State and the Secretary of the Treasury to designate individuals and entities pursuant to specific criteria.
This bill was introduced in the House of Representatives on 20/7/2017, approved and sent to the Senate on 10/26/2017. As of the day of this article, the Act was already read twice at the Senate and placed on Senate Legislative Calendar under General Orders. If approved, it will be sent to the President for signature.
This bill amends the Hizballah International Financing Prevention Act of 2015 to impose specified sanctions on:
- foreign persons that knowingly assist in or provide support for fund raising or recruitment activities for Hizballah;
- agencies of foreign governments that provide Hizballah with financial support, arms, or other assistance (export license requirements are included in addition to sanctions if such government is a state sponsor of terrorism); and
- Hizballah, including by reason of Hizballah’s significant transnational criminal activities.
In this bill, the Congress expresses its consent to monitor and place sanctions on financial institutions that serve any member of the Lebanese parliament or any cabinet official of the Lebanese Republic who is a member of Hizballah or identifies as such.
The bill prescribes reporting requirements (or reporting modifications) with respect to:
- foreign persons that knowingly assist or provide significant financial, material, or technological support for foreign persons assisting Hizballah;
- financial institutions that are owned or organized under the laws of state sponsors of terrorism;
- Hizballah’s racketeering activities;
- combating illicit tobacco trafficking networks used by Hizballah and other foreign terrorist organizations to finance their operations;
- the estimated net worth of senior Hizballah officials and how these funds were acquired and used; and
- countries that support Hizballah or in which Hizballah maintains important logistics networks or financial networks and steps such countries are taking to disrupt such networks.
The Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 is also amended by this bill to sanction foreign financial institutions that facilitate efforts by Iran or the Islamic Revolutionary Guard Corps to aid Hizballah.
This bill became Law on 1/7/2010. It mainly sets the legislative framework to enable the execution of the following initiatives:
- impose strong additional sanctions on the government of Iran to support more effective international diplomatic efforts to address Iran’s illicit nuclear efforts and support for international terrorism;
- confirm that U.S. concerns regarding Iran are strictly the result of that government’s actions;
- highlights the urgency that Iran disclose the full nature of its nuclear program and provide the International Atomic Energy Agency (IAEA) unrestricted access to its facilities following the September 2009 revelation that Iran is developing a secret uranium enrichment site near Qom;
- impose, by the President, the full range of sanctions on individuals or entities with ties to the Iranian Revolutionary Guard Corps’ (IRGC) because of the IRGC involvement in Iran’s nuclear program, international terrorism, and domestic human rights abuses;
- adopt additional measures by the United States to prevent the diversion of sensitive dual-use technologies to Iran;
- enable the President to take measures to respond to violations of human rights and religious freedom in Iran;
- allow responsible U.S.-based nongovernmental organizations to establish and carry out operations in Iran to promote civil society and foster goodwill among the people of Iran;
- prevent the United States from issuing a license for the export of nuclear materials, services, or technology to a country that is providing similar materials, services, or technology to another country that is not in full compliance with its obligations under the Nuclear Non-Proliferation Treaty unless their provision does not undermine U.S. nonproliferation policies; and
- highlight that the people of the United States have feelings of friendship for the people of Iran and regret that developments in recent decades have created impediments to that friendship!
This bill declares it to be U.S. policy to prevent further penetration of Iran and Hizballah into the Western Hemisphere (means the United States, Canada, Mexico, the Caribbean, South America and Central America) and to prioritise diplomatic efforts to engage countries in the hemisphere to disrupt and degrade Hizballah’s illicit networks operating in the region.
According to the terms of this bill, the Department of State is required to submit a strategy to prevent hostile activities by Iran and disrupt and degrade Hizballah’s illicit networks in the hemisphere. It must also provide to the relevant congressional committees annual briefings that review its efforts to implement such strategy and U.S. bilateral and multilateral engagement with respect to Hizballah in the hemisphere.
Under the instructions of the President, the Department of State should prioritise U.S. diplomatic engagement with countries in the hemisphere in order to increase cooperation and build the capacity of the governments of those countries to prevent such activities and disrupt and degrade such networks.
The bill also amends the Hizballah International Financing Prevention Act of 2015 (see above) to require the President to instruct:
- the U.S. Permanent Representative to the Organisation of American States (OAS) to work to secure OAS support for a resolution that would declare Hizballah to be a terrorist organisation and address such illicit networks; and
- the U.S. Ambassador to the Organisation for Security and Cooperation in Europe (OSCE) to work on securing a report on compliance by participating states with the Consolidated Framework for the Fight Against Terrorism, with regard to Hizballah; and
- S. diplomats to work with international forums to identify government entities in Latin America and the Caribbean that support individuals affiliated with Hizballah in the hemisphere.
The framework is a decision (No. 1063) adopted by the OSCE’s Permanent Council on 7/12/2012, identifying terrorism as one of the most important causes of instability in the security environment and formalising commitments of the OSCE participating States to co-operate fully in the fight against terrorism, in accordance with their obligations under international law, in order to find, deny safe haven to and bring to justice, on the basis of the principle of “extradite or prosecute”, any person who supports, facilitates, participates in or attempts to participate in the financing, planning, preparation or perpetration of terrorist acts or provides safe havens.
In July 2013, the E.U. designated Hizballah’s “military wing” a terrorist organisation, and in February 2016, the U.S. Drug Enforcement Administration and U.S. Customs and Border Protection partnered with counterparts in France, Germany, Italy, and Belgium to arrest top leaders of the European cell of Hizballah’s External Security Organisation Business Affairs Component, a cell that supposedly engages in international drug trafficking and money laundering to support Hizballah’s terror activities, and in May 2017, the United States and Saudi Arabia sanctioned a member of Hizballah’s executive council which oversees the organisation’s political, organisational, social and educational activities, for his involvement in terrorist activity.
In this Resolution dated 29/6/2017, the House of Representatives recalls, among others, the abovementioned events and, addressing the E.U., expresses:
- appreciation to the E.U. for the progress made in countering Hizballah since the E.U. designated Hizballah’s military wing as a terrorist organization;
- support for the continued, increased cooperation between the United States and the E.U. in preventing Hizballah’s criminal and terrorist activities;
- support to transcontinental efforts within Europe to share intelligence information among police and security services to facilitate greater cooperation in tracking, apprehending, and prosecuting terrorists, foreign fighters, and potential offenders;
- encouragement to the E.U. to implement sanctions against Hizballah-affiliated terrorists in tandem with the United States; and
- urgency to the E.U. to designate Hizballah in its entirety as a terrorist organization and increase pressure on the group, including through:
- facilitating better cross-border cooperation between E.U. members in combating Hizballah;
- issuing arrest warrants against members and active supporters of Hizballah;
- freezing Hizballah’s assets in Europe, including those camouflaged as charities; and
- prohibiting fundraising activities in support of Hizballah.
With reference to the 2006 conflict with the State of Israel, in which the United States claimed that Hizballah forces utilised human shields to protect themselves from counterattacks by Israeli forces, including storing weapons inside civilian homes and firing rockets from inside populated civilian areas, this bill states that it shall be U.S. policy to condemn Hizballah’s use of human shields as a gross violation of internationally recognised human rights and act against those that engage in such practice.
The President is thereby urged to use U.S. influence at the United Nations Security Council to secure support for a resolution imposing multilateral sanctions against Hizballah for its use of human shields. He is also required to 1) transmit to Congress and update a list of each foreign person or entity that is a member of, or acting on behalf of, Hizballah and that is responsible for, or complicit in, the use of human shields and each foreign person, entity, or instrumentality of a foreign state that has supported or facilitated such person or entity; and 2) impose U.S.-based property blocking and visa sanctions, including revocation of existing visas, against such person, entity or instrumentality.
However, the President may waive the application of sanctions for up to 120 days if he reports to Congress that such waiver is vital to national security interests.
The President is also required to report to Congress on whether the following persons or instrumentalities meet sanctions criteria:
- the Secretary General of Hizballah;
- members of the Hizballah political bureau;
- other senior members of Hizballah or other associated entities as the President determines appropriate; and
- any person, agency, or instrumentality of a foreign state that provides material support to Hizballah’s use of civilian human shields.
The bill was introduced in the House of Representatives on 15/2/2018 in order to:
- Require the President to determine whether Hizballah should be designated as a:
- “significant foreign narcotics trafficker” in accordance with the requirements for additional determinations under section 804(h)(1) of the Intelligence Authorisation Act for Fiscal Year 2000, and/or
- “transnational criminal organisation” as such term is defined for purposes of the list of specially designated nationals and blocked persons maintained by the Office of Foreign Assets Control of the Department of the Treasury.
- Require the Secretary of the Treasury, not later than 1 year after the date of the enactment of this Act, to issue a report to the Committees on Financial Services and Foreign Affairs of the House of Representatives and the Committees on Banking, Housing, and Urban Affairs and Foreign Relations of the Senate containing an estimate of the total assets under direct or indirect control by Hizballah-linked leaders of political parties or movements who are located in the United States.
The bill is based on the facts that Hezbollah has been linked with South American drug trafficking organisations and identified by the Drug Enforcement Administration as a major supplier of cocaine into the United States.
It also recalls that on 11/1/2018, Attorney General Jeff Sessions announced the creation of the Hezbollah Financing and Narcoterrorism Team to investigate individuals and networks providing support to Hezbollah’s narcoterrorism activities, and on 8/6/2016, Michael Braun, a former head of the Drug Enforcement Administration’s Special Operations Division, testified before the Committee on Financial Services of the House of Representatives, with regards to Hizballah’s activities, that “hundreds of tons of cocaine, over a 15-year period and move massive amounts of currency, hundreds of, millions, perhaps billions of dollars in currency around the world in the most sophisticated money laundering scheme that we have ever witnessed”, and in 2011, the Drug Enforcement Administration indicted Ayman Saied Joumaa, a Lebanese-Colombian dual national having ties to Hizballah, for using a global network of companies operating out of Latin America, West Africa, and Lebanon to launder as much as /200,000,000/USD a month in drug proceeds for Mexican and Colombian cartels.
As of the day of this article, the bill was referred to the Committee on Foreign Affairs.
The Transnational Criminal Organisations sanctions program was implemented by the OFAC since 2011 following the issuance of Executive Order 13581. It declares a national emergency to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the growing threat of significant transnational criminal organisations.
It is justified by the activities of significant transnational criminal organisations which had reached such scope and gravity that they threaten the stability of international political and economic systems, and by the ascertainment that such organisations were becoming increasingly sophisticated and dangerous to the United States, because they were increasingly rooted in the operations of foreign governments and the international financial system, thereby weakening democratic institutions, degrading the rule of law and undermining economic markets.
The sanctions stated in the program block the property and interests in property of persons listed in the Annex to Executive Order 13581, or persons that are determined by the Secretary of the Treasury, in consultation with the Attorney General and the Secretary of State:
- To be a foreign person that constitutes a significant transnational criminal organisation;
- To have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked pursuant to Executive Order 13581; or
- To be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to Executive Order 13581.
Sources: U.S. Congress; OFAC; other U.S. official sources.