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Hizbullah's financial war of attrition

Hizbullah's financial war of attrition
Published 17 May 2016   Follow @RodgerShanahan

The death last week of Mustapha Badredinne, Hizbullah's chief of military operations in Syria, was certainly big news. His death highlights once again the cost in senior personnel that the civil war is exacting on the Lebanese Shi'a group. In December last year, Samir Kuntar was killed in an Israeli airstrike as was Jihad Mughniyya (the son of Imad) in January. There were even some reports that the real target of the attack that killed Jihad was Badreddine, who was supposed to have been in the same convoy.

These deaths show how costly the war in Syria is becoming in personnel terms for Hizbullah. With well over 1000 combat deaths the war has taken a toll, albeit a manageable one, on the organisation. On the flip side the years of fighting has also blooded a new generation of fighters, tactical commanders and operational planners. 

But Hizbullah has also been fighting on another, less bloody, but still painful front and one in which there are no martyrs to eulogise. Washington has been waging an active campaign against Hizbullah's financial operations, likely seeing the low oil prices and expensive Iranian military operations in Syria and Iraq as a sign of a drop in financial support from Tehran.

This has been done in the past using existing powers under Executive Order 13324: in 2015, Hizbullah support networks were sanctioned in West Africa, a Lebanese-owned company in China, individuals including Badreddine in July and other individuals and companies in October last year for their role in supporting Hizbullah financially. [fold]

A new bill designed to target Hizbullah even more specifically, the Hizbullah International Financing Prevention Act of 2015, was signed into law in December last year and action since then has been swift. In January 2016 the first individuals were sanctioned under the Act. Most importantly the Act allows the Secretary of the Treasury to prohibit foreign banks from accessing the US financial system that engage in certain specified transactions in support of Hizbullah. This has naturally caused more than a little disquiet in Lebanese banking circles.  

As well as legislative lines of operation, law enforcement have also targted Hizbullah's income streams. In February this year a multinational law enforcement operation busted a drug operation that saw Hizbullah operatives, including a senior Hizbullah money launderer, working with South American drug cartels to raise profits for repatriation back to Lebanon for Hizbullah's use.

There is nothing to suggest that either the Syrian war, or the US tightening of financial sanctions, are causing irreparable damage to the organisation, but every new sanction and every new arrest chips away at the ability of the group to fundraise freely. Even deeply ideological groups need to pay its supporters, and any long-term diminution of its ability to bestow financial largesse is something that Hizbullah will want to avoid.

Photo courtesy of Flickr user yeowatzup.

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