July 18, 2017 | Policy Brief

Congress and the Administration Need to Reinvigorate HIFPA

July 18, 2017 | Policy Brief

Congress and the Administration Need to Reinvigorate HIFPA

On December 18, 2015, the Hizballah International Financing Prevention Act (HIFPA) was signed into law by President Obama after years of congressional pressure. The previous administration had resisted supporting the legislation because it thought it might adversely impact negotiations on the nuclear deal with Iran. While the administration said it was committed to fighting terrorism, Iranian proxies were seldom targeted for sanctionable activities.

Although it signed HIFPA into law, the Obama administration did not fully leverage its provisions. But now Congress and the executive branch have the opportunity to implement the legislation fully and use both HIFPA and all other tools at the disposal of the U.S. government to pursue Hezbollah operatives and financiers around the globe, including in the Western Hemisphere.

Already, the threat of sanctions prescribed in HIFPA has been successful in pressuring Lebanese banks to shut down accounts linked to Hezbollah, though others continue to provide banking services to the terrorist group. A portion of Hezbollah’s connection with the modern banking sector has been disrupted, but Hezbollah retains its ability to finance its global activities by raising hundreds of millions of dollars via illicit activities in South America and West Africa. This makes the full implementation of HIFPA all the more important, since the law was designed not only to target Hezbollah within Lebanon, but to also target Hezbollah’s growing use of international criminal enterprises to raise and launder money.

Hezbollah has increasingly turned to South America, especially in jurisdictions of lax enforcement, to set up “cultural centers” and utilize corrupt law enforcement officials to further their malign conduct. These areas include wide swaths of Paraguay and Bolivia, as well as the Tri-Border region where Paraguay meets Brazil and Argentina. Chile, Venezuela, Ecuador and Panama have also been used by Hezbollah to coordinate its regional activities.

Hezbollah’s presence in these areas is not new; in 2006, the Treasury Department designated Hezbollah operatives for their actions in the region. Despite these designations as well as Drug Enforcement Agency (DEA) actions such as Project Cassandra, Operation Titan, and Operation Perseus, Hezbollah’s global criminal networks have not been fully exposed. On a related note, in 2014, the Government Accountability Office found that the State Department’s strategy for countering Iranian influence in the Western Hemisphere did not include many of the elements prescribed by Congress.

Several actions still need to be taken to implement HIFPA fully and pair its authorities with criminal prosecutions and joint efforts by the Treasury Department, State Department, Homeland Security, DEA, local law enforcement entities, and Southern Command to root out Hezbollah networks in South America and continue to pursue their recruitment activities.

First, HIFPA required the administration to report on Hezbollah’s global network and determine if Hezbollah should be designated as a significant foreign narcotics trafficker under the Foreign Narcotics Kingpin Designation Act. This designation would allow law enforcement to target Hezbollah in countries and jurisdictions that have not labeled the group as a terrorist organization.

Hezbollah members remain active in major drug trafficking activities and logistics, including the Ayman Jomaa ring which the Treasury Department has documented. Treasury has also designated banks such as the Lebanese Canadian Bank, which helped Hezbollah launder profits from its drug sales. The bill also asked the administration to report on whether Hezbollah met the criteria to be labeled as a Transnational Criminal Organization under Executive Order 13581. Despite ample evidence that Hezbollah is operating as a major drug trafficker and Transnational Criminal Organization, little has been done to target Hezbollah as an organization for these activities.

More can and should be done. Under existing authorities, the administration can take significant steps to curtail Hezbollah’s criminal and drug trafficking activities. The U.S. can also apply financial sanctions such as section 311 of the USA PATRIOT Act to target money-laundering financial institutions in the Tri-Border region. Hezbollah officials should certainly be prosecuted in the U.S. under the Racketeer Influenced and Corrupt Organizations Act, which combats acts of terrorism, drug trafficking, money laundering, bribery, and other illegal activities.

Lastly, the U.S. needs to pursue individuals and institutions that provide support to Hezbollah. Congress and the administration should demand accountability of individuals around the globe that engage in institutionalized corruption that allows Hezbollah to recruit and train operatives under the protection of foreign governments. These individuals could be targeted under the Global Magnitsky Human Rights Accountability Act, including visa bans and asset forfeiture for the suppression of basic human rights and corruption.

Reducing Hezbollah’s global reach is imperative in limiting the group’s facilitation of mass atrocities in Syria, terrorist plots against the West, and destabilizing activities in Lebanon. The U.S. should view the fight against Hezbollah as a critical national security priority. 

Tyler Stapleton is deputy director for congressional relations at the Foundation for Defense of Democracies. Follow Tyler on Twitter @Ty_D_Stapleton.


Cyber Cyber-Enabled Economic Warfare Hezbollah Iran Lebanon