Treasury Targets Hizballah Finance Network and Syrian Captagon Trafficking
October 16, 2024
WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating three individuals and four associated companies involved in a Lebanon-based sanctions evasion network that generates millions of dollars in revenue for Hizballah. Hizballah’s finance team is responsible for the establishment and operation of Hizballah commercial projects throughout Lebanon, some of which are financed and facilitated by Iran. OFAC is also designating three individuals involved in the illegal production and trafficking of Captagon that has benefitted Bashar al-Assad’s regime and its allies, including Hizballah. The illegal trade in Captagon, a dangerous, highly addictive amphetamine, has become a billion-dollar illicit enterprise operated by senior members of the Syrian regime.
“Today’s action underscores Hizballah’s destabilizing influence within Lebanon and on the wider region, as the group, its affiliates, and its supporters continue to finance their operations through covert involvement in commercial trade and the illicit trafficking of captagon,” said Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence Bradley T. Smith. “Treasury will continue to expose and disrupt the illicit schemes that underpin Hizballah’s ability to continue its violent attacks.”
Today’s action targeting the Lebanon-based sanctions evasion network generating revenue for Hizballah is being taken pursuant to counterterrorism authority Executive Order (E.O.) 13224, as amended. The U.S. Department of State designated Hizballah as a Specially Designated Global Terrorist group (SDGT) pursuant to E.O. 13224 on October 31, 2001.
Today’s action targeting the illegal production and trafficking of Captagon is being taken pursuant to E.O. 13572 of April 29, 2011, “Blocking Property of Certain Persons With Respect to Human Rights Abuses in Syria”; E.O. 13582 of August 17, 2011, “Blocking Property of the Government of Syria and Prohibiting Certain Transactions With Respect to Syria”; and the Caesar Syrian Civilian Protection Act of 2019 (“Caesar Act”). These actions were also undertaken in support of the objectives of the Illicit Captagon Trafficking Suppression Act.
HIZBALLAH FINANCE OPERATIONS
Treasury has consistently targeted individuals directly or indirectly involved in Hizballah’s finance operations that provide critical revenue for the organization, including Muhammad Qasim al-Bazzal (al-Bazzal) and now-deceased Muhammad Qasir (Qasir), who have managed commercial investments and oil smuggling projects on behalf of Hizballah. On May 15, 2018, OFAC designated Qasir pursuant to E.O. 13224, as amended, for acting for or on behalf of Hizballah as a critical conduit for financial disbursements from Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) to Hizballah. On November 20, 2018, OFAC designated al-Bazzal, an associate of Qasir, pursuant to E.O. 13224 for his support to Hizballah. OFAC has also taken a series of actions targeting Hizballah petroleum smuggling operations, including designations on January 31, 2024 and September 11, 2024 that targeted core elements of a Hizballah and IRGC-QF network that generated hundreds of millions of dollars’ worth of revenue through the sale of Iranian commodities, including petroleum, much of it to the Syrian government.
In the face of continued pressure from these designations, Hizballah has leveraged sanctions evasion tactics such as transferring ownership of various companies to associates or relatives in an effort to obfuscate Hizballah’s interest in these revenue generating enterprises. Today’s action builds on OFAC’s September 2024 designations of other individuals and entities linked to Hizballah’s corporate network, which siphons revenue to the group, to include additional Hizballah finance officials masquerading as ordinary Lebanese business owners, as well as several of their companies.
KEY FIGURES OF HIZBALLAH FINANCE TEAM
The individuals and companies designated today are part of a network of commercial enterprises owned or controlled by Hizballah. These individuals are linked to Hizballah’s finance team and have registered companies in their own names in order to conceal Hizballah’s interest in the activities. The companies in turn provide Hizballah potentially lucrative business opportunities while also providing them access the formal financial system.
Silvana Atwi (Atwi) works as the secretary of senior finance team official al-Bazzal, and has been linked to other al-Bazzal-associated companies, including Alumix SAL, which was designated by OFAC on September 4, 2019 pursuant to E.O. 13224 for its ties to al-Bazzal, and Concepto Screen SAL Off-shore, which was designated pursuant to E.O. 13224, as amended, for its involvement in facilitating oil deals benefiting the IRGC-QF and Hizballah. Additionally, Atwi is the legal owner of G.M. Farm (formerly known as J.M. PHARM), a company based in Lebanon that was a signatory on Lebanon-based financial projects that Hizballah ran with Iranian involvement. These projects aimed to generate profits for Hizballah.
Haidar Houssam al-Din Abdul Ghaffar (Ghaffar) is a Hizballah finance team official, and the legal owner of Global Tradeline SARL. Global Tradeline SARL is a Lebanese company involved in importing food products to Lebanon, rebranding them, and selling them to generate profit for Hizballah. The company has also imported products for Hizballah activity. In 2022, Global Tradeline SARL made payments to al-Bazzal totaling at least half a million dollars. In addition to Global Tradeline SARL, Ghaffar directs or controls Liban Oui SARL, a dairy production operation within Hizballah’s finance team’s network that generates revenue for Hizballah.
Houssam Hamadi is a businessman and Hizballah finance team associate. He is also the legal owner of United Sons, a Lebanon-based company.
Atwi, Ghaffar, Hamadi, and Global Tradeline SARL are being designated pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Hizballah.
GM Farm is being designated pursuant to E.O. 13224, as amended, for being owned, controlled, or directed by, directly or indirectly, Atwi. Liban Oui is being designated pursuant to E.O. 13224, as amended, for being owned, controlled, or directed by, directly or indirectly, Ghaffar. United Sons is being designated pursuant to E.O. 13224, as amended, for being owned, controlled, or directed by, directly or indirectly, Hamadi.
ILLICIT TRAFFICKING OF CAPTAGON IN SUPPORT OF THE SYRIAN REGIME
Khaldoun Hamieh (Hamieh) has been identified as a Lebanon-based drug trafficker with ties to Hizballah and the OFAC-designated Fourth Division of the Syrian Arab Army (Fourth Division). The Fourth Division was designated pursuant to E.O 13894 on January 12, 2017, for its role in violent repression of civilians in Syria. Hamieh has been identified as controlling Captagon labs in the Syrian city of Sayyida Zainab, in an area that is largely under the control of Iran’s Islamic Revolutionary Guard Corps and Hizballah. Hamieh has worked with border crossing officials at the Lebanon-Syria border to transport Captagon from Lebanon into Jordan. On at least one occasion, Hamieh helped to secure safe passage for a vehicle carrying hundreds of kilograms of Lebanese-made Captagon into Syria. Hamieh, along with members of the Fourth Division, later helped to secure safe passage of the proceeds from the sale of that Captagon to the office of Ghassan Bilal, a key advisor to Maher al-Assad, the brother of Bashar Al-Assad. Ghassan Bilal and Maher Al-Assad were both designated pursuant to the Syrian human rights authority E.O. 13894 on June 17, 2020, in connection with human rights abuses in Syria.
Hamieh has sold weapons and armored vehicles to Maher al-Assad, and on at least one occasion donated nearly one million dollars to Hizballah. Hamieh’s close relationship with Maher al-Assad, the Fourth Division, Hizballah, and other drug traffickers has allowed him to smuggle Captagon into neighboring Middle Eastern countries from Lebanon and Syria while generating significant revenues for the benefit of the Syrian regime, Hizballah, and himself.
Syrian national Raji Falhout (Falhout) has been identified as leading a gang that has worked with the Syrian Military Intelligence Directorate and Hizballah to generate revenue from kidnappings and Captagon trafficking.
Adbellatif Hamideh (Hamideh) is a prominent businessman in Syria and the owner of a paper roll factory in Aleppo that has served as a front company for Captagon trafficking. From this factory, Hamideh has shipped Captagon pills worth over $1.5 billion to Europe, concealing the drugs in industrial paper rolls.
Today’s Captagon-related designations were coordinated closely with the U.S. Drug Enforcement Administration.
Hamieh is being designated for pursuant to E.O. 13582 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, the Government of Syria. Hamieh is also being designated pursuant the Caesar Act for being a foreign person that knowingly provides significant financial, material, or technological support to, or knowingly engages in a significant transaction with, the Government of Syria.
Raji Falhout is being designated pursuant to E.O. 13572 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, the Syrian Military Intelligence Directorate.
Hamideh is being designated pursuant to E.O. 13582 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, the Government of Syria.
SANCTIONS IMPLICATIONS
As a result of today’s action, all property and interests in property of the designated persons described above, and of any entities that are owned directly or indirectly, 50 percent or more by them, individually, or with other blocked persons, that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons.
U.S. persons must comply with OFAC regulations, including all U.S. citizens and permanent resident aliens regardless of where they are located, all persons within the United States, and all U.S.-incorporated entities and their foreign branches. Non-U.S. persons are also subject to certain OFAC prohibitions. For example, non-U.S. persons are prohibited from causing or conspiring to cause U.S. persons to wittingly or unwittingly violate U.S. sanctions, as well as engaging in conduct that evades U.S. sanctions. Violations of OFAC regulations may result in civil or criminal penalties.
Non-U.S. persons are prohibited from causing or conspiring to cause U.S. persons to wittingly or unwittingly violate U.S. sanctions, as well as engaging in conduct that evades U.S. sanctions. OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. sanctions, including the factors that OFAC generally considers when determining an appropriate response to an apparent violation.
In addition, non-U.S. financial institutions and other persons that engage in certain transactions or activities with sanctioned entities and individuals may expose themselves to sanctions risk. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person, or the receipt of any contribution or provision of funds, goods, or services from any such person.
OFAC may impose civil penalties for sanctions violations based on strict liability, meaning that a person subject to U.S. jurisdiction may be held civilly liable even if such person did not know or have reason to know that it was engaging in a transaction that was prohibited under sanctions laws and regulations administered by OFAC. OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. economic sanctions, including the factors that OFAC generally considers when determining an appropriate response to an apparent violation. For additional information on complying with U.S. sanctions and export control laws, please see the Department of Commerce, Department of the Treasury, and Department of Justice Tri-Seal Compliance Note.
Furthermore, engaging in certain transactions with the individuals designated today entails risk of secondary sanctions pursuant to E.O. 13224, as amended. Pursuant to this authority, OFAC can prohibit or impose strict conditions on opening or maintaining, in the United States, of a correspondent account or a payable-through account of a foreign financial institution that knowingly conducts or facilitates any significant transaction on behalf of a Specially Designated Global Terrorist.
The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the Specially Designated Nationals and Blocked Persons (SDN) List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897 here. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please click here.
