Janes Terrorism Special Report:

Hizbullah's transnational funding networks

This is an extract from a special report developed as part of a series by Janes focusing on the fundraising mechanisms of key non-state armed groups. Full access is available to subscribers here

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Key Points

Introduction

In an operation planned by the United States Drug Enforcement Administration (DEA) and executed by Moroccan authorities in March 2017, Kassim Tajideen was arrested during a flight layover and extradited to the US to face charges of money laundering. The arrest ended an almost 15-year investigation into suspected money laundering by the Tajideen family’s extensive networks on three continents on behalf of Hizbullah.

Tajideen was designated a ‘specially designated global terrorist’ (SDGT) by the US government in 2009 and sentenced in 2019 by a US Federal Court in Washington to five years in prison and fined USD50 million for his role in a money-laundering scheme for Hizbullah.

Tajideen, who ran a series of shell companies and import/export concerns across the Middle East, Africa, and Europe with his two brothers and an extended network of family members, has been described within Hizbullah circles in Lebanon as the key to the organisation’s extensive international fundraising networks. His brothers, Ali and Husayn, were designated SDGT in 2010 for their role in financially supporting Hizbullah.

Although one Hizbullah insider described to Janes the arrest – and subsequent guilty plea in 2018 to a single charge of money laundering – as a “minor hiccup, [because] the Tajideen operation has always been designed for arrests”, the investigation provided key insights into an ongoing fight by US and European security and intelligence services, as well as financial regulators around the world to access Hizbullah’s financial networks, which began in 2003 with an arrest in the Belgian port city of Antwerp.

Whatever impact Tajideen’s arrest and conviction had was further lessened in May 2020 when – citing concerns about Tajideen’s advanced age, short sentence, and the Covid-19 pandemic – a US federal judge ordered his release just 18 months into his sentence. He was deported to Lebanon in July.

During an investigation in 2003 into unrelated Sunni Muslim activists in the country the Belgian Federal Police arrested Tajideen, his wife, and their son on charges of “large-scale tax fraud, money laundering, and trade in diamonds of doubtful origin, to the value of tens of millions of euros” while operating a shell company out of the port of Antwerp. According to Belgian police, the company was linked – via complex ownership schemes of import-export companies, international shippers, and retail merchant operations – to an international network that raised money by smuggling or importing commercial goods into Africa in exchange for local currency. This was then used to pay local merchants for diamonds, rare timber, and other natural resources throughout Africa, which could then be sold or smuggled for hard currency and subsequently transferred through an international network of banks in Belgium, Portugal, and Lebanon.

The multi-billion dollar companies controlled by Tajideen have provided millions of dollars annually to Hizbullah for more than two decades, according to insiders in Lebanon who have worked with the Beirut-based shell companies that control the network. Janes was told that the Beirut companies represented only a fraction of the group’s extensive international fundraising operations.

For example, in 2010 and 2011 the US Treasury accused Hizbullah – via the Tajideen network – of laundering hundreds of millions of dollars through the now defunct Lebanese Canadian Bank (LCB). Hizbullah denied the allegations. The LCB faced indictments and fines brought by the US Drug Enforcement Agency, and it agreed to settle the action. HSBC USA was also caught in a money-laundering scandal in 2012 with potential links to Hizbullah for which it settled “potential civil liability for three apparent violations of the Global Terrorism Sanctions Regulations”. The US Office of Foreign Assets Control concluded that HSBC’s actions “were not the result of willful or reckless conduct”.

The Tajideen-controlled companies, which the insiders claimed were directly controlled by Hizbullah’s leadership, represented only a fraction of the group’s aggressive international fundraising networks. These span the collection of donations from the Lebanese Shia diaspora, to directly engaging in drug trafficking from South America to the United States and Europe, and to taxing drug smuggling and other international criminal activities conducted by members of the community that are not directly under Hizbullah control.

An Israeli intelligence official, who focuses on Hizbullah activities in Africa and South America and wished to be identified as ‘Avi’, told Janes , “It’s been taking place since the 1980s and the … group – [Shia] families in Africa and South America – have always been expected to pay taxes and make religiously-mandated donations to the resistance [as Hizbullah describes itself], but since the summer war of 2006 [with Israel], we have seen Hizbullah being much more aggressive about running their own companies and directly investing the profits, not just taxes or donations, from criminal or corporate activity around the world.”

He said, “Yes Iran backs the group to the tune of hundreds of millions of dollars annually and the relationship is good but Hizbullah’s leadership knows that they are but a card to be played by the Iranians, it would be foolish to rely on only one stream of income.” He added, “Because of the extensive [Shia] diaspora in Africa, South America, and even North America, the party has long sought to diversify its economic operations. So to fight it is to confront a complex tangle of donations, taxes, direct investment, drug trafficking, legal imports and exports, criminal scams on a low level and on a high level. They will use any method at their disposal to increase income and are very fine business minds. So … to understand ‘Hizbullah fundraising’ you are actually talking about a complex and diverse web of operations that spans most of the third world [sic].”

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