Kuwait Needs U.S. Support to Combat Iranian Terror Finance

The Treasury Department imposed sanctions on two Kuwaiti nationals earlier this month for their role in transferring millions of dollars from Kuwait to Lebanese Hezbollah. The two sanctioned individuals appear to have channeled their illicit transactions through a private hospital, consistent with other efforts by Hezbollah and its sponsors in Tehran to exploit humanitarian institutions for criminal purposes.

One of the Kuwaitis, Talib Husayn Ali Jarak Ismail, commonly known as Talib Jarak, owns Dar Al-Shifa, the country’s oldest and most prestigious healthcare institution, which he opened in 1963. Jarak is a Kuwaiti Shiite, a group that comprises about one-third of Kuwait’s 1.2 million citizens.

After the Islamic revolution of 1979, Iran created transnational Shiite networks throughout the region, both to cultivate political influence and to sponsor terror attacks. With U.S. sanctions tightening after Washington’s 2018 withdrawal from the Iran nuclear deal, Tehran became increasingly reliant on these networks to skirt sanctions as well.

In 2006, Jarak hired as the hospital’s CEO Ahmad Nasrallah, the brother of Lebanese lawmaker Mohamed Deeb Nasrallah, who is a member of the Shiite party Amal, Hezbollah’s junior partner in government.

According to Treasury, Talib Jarak “coordinated the transfer of millions of dollars to Hizballah from Kuwait” with the help of Jamal Husayn Abd-Ali Abdull-Rahim al-Shatti, the second sanctions target. Jarak “also travelled to Lebanon to meet with Hizballah officials to donate money to the group.”

Al-Shatti is the brother of former lawmaker Khaled al-Shatti, who was elected to Kuwait’s National Assembly in 2012 and 2016 but lost his seat in last year’s election. When a Kuwaiti court convicted Jamal’s son Abdul-Muhsin of joining a Tehran-backed armed militia that came to be known as the Abdali Cell, his uncle Khaled defended him and his companions before Kuwaiti courts.

Khaled al-Shatti styles himself as a human rights lawyer and activist and has refused to describe Hezbollah as a terrorist group, insisting that it is “a resistance movement.”

The Kuwaiti government has so far avoided confronting Shiite lawmakers and militants who sympathize with Iran and offer Tehran support. Kuwait fears that cracking down on this illicit activity might complicate the state’s relations with its Shiite citizens, except in cases that pose clear and present danger, such as in the case of the Abdali Cell. For lesser offenses, however, Kuwait has looked the other way for fear of inviting Iranian retaliation.

Iranian President Ebrahim Raisi told the UN General Assembly last week that America is committing “crimes against humanity” by imposing “sanctions on medicine.” Yet Tehran and its clients are using increasingly complicated and hard-to-detect money laundering tools and channels, including humanitarian organizations and healthcare providers.

The United States should make clear its expectation that Kuwait will prosecute Jarak and al-Shatti in its own court system. Yet for the Kuwaiti government to prosecute Hezbollah’s money laundering through Kuwaiti hospitals and banks, Washington has to show steadiness in defending its allies against possible Iranian retaliation.

One way to empower U.S. allies against Iran’s financing of terrorism and other illicit activity is for Congress to express bipartisan support for these allies in the face of Iranian bullying and to encourage the administration to show resolve in dealing with Tehran’s harassment of U.S. allies. Such a stance would help ensure consistent U.S. support for allies’ legislation and enforcement of anti-terrorism laws, regardless of the ruling party in the White House.

Hussain Abdul-Hussain is a research fellow at the Foundation for Defense of Democracies (FDD), where he contributes to FDD’s Iran Program and Center on Economic and Financial Power (CEFP). For more analysis from Hussain, the Iran Program, and CEFP, please subscribe HERE. Follow Hussain on Twitter @hahussain. Follow FDD on Twitter @FDD and @FDD_Iran and @FDD_CEFP. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.