Choke the money flow: The next step in the war against Hezbollah

The battlefield has evolved and the weapons are financial regulations, international cooperation, and cutting-edge technology.

By Gregg Roman, Middle East Forum

Hezbollah is reeling from the death of leader Hassan Nasrallah and top commanders. Over the past two weeks, Israel has systematically killed or removed from the battlefield thousands of Hezbollah fighters and commanders.

If Israel wants to defeat Hezbollah, however, it must not only defeat it on the battlefield; it must also dry up its resources so the terrorist group no longer can launder money, fund salaries or subsidize goods for its members.

This will require economic warfare beyond the sanctions Western countries now slap on the group. Hezbollah’s financial networks, spanning continents and infiltrating legitimate businesses, demand the multi-pronged pursuit of economic warfare against the group.

The Captagon trade, Hezbollah’s golden goose, floods the Middle East with synthetic drugs and fills the group’s coffers. Israel must spearhead a coordinated effort with law enforcement agencies in Saudi Arabia, the United Arab Emirates, and Jordan to choke off the group’s supply lines.

Lessons from Operation Cassandra, which exposed Hezbollah’s drug trafficking network, provide a roadmap for targeting key players and disrupting this lucrative trade.

In the digital realm, Hezbollah has embraced cryptocurrency, exploiting its anonymity to launder money and fundraise. Israel must deploy blockchain analysis tools and partner with major exchanges to flag and freeze suspicious transactions.

Artificial intelligence-driven algorithms can unmask patterns in crypto movements, revealing Hezbollah’s digital fingerprints.

International sanctions must tighten their noose. Beyond known operatives, Israel should extend sanctions to family members and business associates, cutting off Hezbollah’s ability to operate through proxies.

Banks in Lebanon, West Africa, and South America need heightened scrutiny, with pressure applied through bodies like the Financial Action Task Force to blacklist non-compliant countries.

Hezbollah’s labyrinth of front companies and shell corporations needs unraveling. A yet-to-be-implemented Department of Defense strategy offers a chance to dismantle Hezbollah-linked businesses in the tri-border area of Argentina, Brazil, and Paraguay.

Investigations must expand into West Africa’s used car trade and diamond industry, havens for Hezbollah’s illicit finances. A shared database among allied nations can track these entities, shining a light on their shadowy transactions.

Hawala networks, informal money transfer systems that Hezbollah favors, require modern countermeasures. Financial intelligence units must infiltrate these networks, collaborating with local authorities in the Gulf states and Southeast Asia to dismantle Hezbollah-linked hawala operations.

After Al Qaeda’s 1998 East Africa embassy bombing and the September 11, 2001, terror attacks, the Treasury Department worked with hawala networks in the Horn of Africa to ensure greater transparency.

Hezbollah-favored networks must face the same scrutiny.

Lebanon’s banking sector remains a weak link in the financial chain, but Israel lacks direct influence over these institutions. Western allies, however, can take decisive action.

These powers should impose secondary sanctions on Lebanese institutions facilitating Hezbollah transactions, effectively forcing compliance through fear of losing access to the global financial system.

Simultaneously, Western countries must leverage their economic ties and diplomatic channels to pressure Lebanon’s central bank into implementing stricter anti-money laundering measures.

Even in the age of digital finance, physical cash remains king for terrorist organizations. Enhanced cooperation with global customs and border agencies, coupled with cutting-edge scanning technologies at ports and border crossings, can intercept Hezbollah’s bulk cash smuggling operations.

The battlefield has evolved. The weapons are financial regulations, international cooperation, and cutting-edge technology. Starving Hezbollah can undermine the group’s military capabilities and global influence without firing a single shot.

drug tradeeconomic warfareHezbollahMoney laundering