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Hezbollah is laundering money in South American tri-border region

Hezbollah is laundering money in South American tri-border region


  • LLL-GFATF-Hezbollah Hezbollah Hezbollah is a Shi’a Islamist militant group and political party based...[+]

argentina; australia; bolivia; brazil; hong-kong; israel; south-korea; lebanon; mexico; panama; paraguay; venezuela;

Hezbollah is tapping a money-laundering ministate in Latin America that poses an escalating risk to U.S. national security, according to a report published Tuesday.

Hezbollah, the Iran-backed Lebanese militia designated as a terror group by the U.S., is tapping a money-laundering ministate in Latin America that poses an escalating risk to U.S. national security, according to a report published Tuesday.

The illicit activities in the so-called tri-border region linking Brazil, Argentina and Paraguay have long been a source of concern for U.S. security officials: After the Sept. 11, 2001, attacks, it became a surveillance target as a haven for terrorists in the Western Hemisphere.

But now Venezuela’s political crisis and Argentina’s inflation, together with entrenched corruption and lax law enforcement, are helping fuel an illicit economy estimated to be worth $43 billion a year, far surpassing Paraguay’s entire gross domestic product, according to the report. The report was prepared by political risk consultancy Asymmetrica, funded and jointly published by the Washington-based nonprofit Counter Extremism Project.

The ease of laundering ill-gotten proceeds and the economy of black market cigarettes, narco-trafficking, human trafficking and illegal arms sales have attracted criminal organizations from around the globe.

“It has become an epicenter, or a shopping mall, of all the illicit goods and money you need to fund your operations,” said Stuart Page, one of the authors of the new report.

“If you’re wanting to do something on U.S. soil, you’d get the materiel there,” said Mr. Page, a former senior Australian security official. “You can buy whatever you like, you can find whatever you like, and it’s on the verge of U.S. shores.”

After a free-trade zone was established in the region in 1970, regional drug cartels took advantage of corrupt government officials and weak border security to move their goods and launder cash around the region, say security experts. Over the years, the tri-border area effectively institutionalized corruption, those experts say.

The money going to Hezbollah from the illegal Lebanese networks is of particular concern to U.S. authorities, especially as the Trump administration ramps up pressure on Iran and its proxies. The group is a political and military force in Lebanon, playing a major role in the Syrian civil war supporting President Bashar al-Assad alongside Russia and Iran.

Argentina’s high inflation rate is helping drive illicit activities, the report’s authors said, as criminal networks sell their illegal goods and services for a higher value across their border. And as other countries such as Panama increasingly work with the U.S. to sever ties with Venezuela, the tri-border region has attracted illegal trade of goods, people and cash from Venezuela, whose government is accused by the U.S. of facilitating narco-trafficking.

Vanessa Neumann, a co-author of the report, said the region is growing to be one the easiest hubs to launder funds in the world, a place where armored trucks trundle down the streets of Brazil’s Foz do Iguaçu and Paraguay’s Ciudad del Este carrying loads of cash, but where banks that offer credit are scarce.

“It is well on its way to becoming an economically independent and fully criminalized substate,” said Ms. Neumann, a former member of the Organization for Economic Cooperation and Development’s Task Force on Countering Illicit Trade.

Drug cartels from Bolivia, Colombia, Mexico and Brazil, as well as organized crime groups from China, in conjunction with a large Lebanese merchant community, all operate in the area. So do mafias from Korea, Hong Kong and Russia, said Asymmetrica, which led an observation team to the area for its research.

Large numbers of Lebanese immigrants arrived in the region after the Arab-Israeli wars in the 1950s and again in the 1980s after the Lebanese Civil War. Even though only a small portion of the population is thought to be directly supporting Hezbollah, the criminal networks that have been uncovered over the years represent a significant risk to U.S. interests.

According to Argentine prosecutors, Lebanese individuals in the tri-border region provided support for the bombings of the Israeli embassy and a Jewish cultural center in Buenos Aires in the 1990s that killed scores of people. More recently, many of the individuals sanctioned by the U.S. for financing Hezbollah from the region are still operating there, according to U.S.-based analysts and recent court cases.

Earlier this year, the U.S. Department of Justice set up a task force of prosecutors with expertise in cases that involve drug trafficking, organized crime and money laundering to target Hezbollah’s financing operations. Analysts expect the illicit operations out of the region to catch the task force’s attention.

Federal governments in the region have acknowledged there is a problem but over the years have been unable to curb the illicit activities there.

Paraguay’s government is now working with the Drug Enforcement Administration and Brazilian federal law enforcement to cut money laundering in the region. Likewise, Argentina’s new government agreed to host more DEA agents in the region.

But the report’s authors said the extent of the problem requires a much more comprehensive solution, including stronger involvement of the standard-setting body, the Financial Action Task Force, and leveraging the power of the International Monetary Fund.

The IMF, for example, could require Argentina to bolster its anti-money-laundering and anti-corruption oversight as fundamental conditions for the bailout loans Buenos Aires is seeking from the emergency lender.

Source: Cetusnews