Iranian proxies turn to crime to dodge sanctions
US forces still have not departed from eastern Syria, yet Tehran is already rushing to fill the void. Iranian agents have been offering cash, food, ID cards, public services and free education to war-weary Syrians, particularly in localities near the Iraq-Syria border like Al-Bukamal. In areas freshly liberated from Daesh’s pernicious ideology, these Iranian schemes include offers to join proxy militia forces and convert to Khomeinist theological principals. “From every family you find one or two people who have become Shiite,” a local observer told the Wall Street Journal. “Just like (Daesh) gave religious lessons to children after prayers, they are doing the same thing,” commented another local, who said that his village was now controlled by Iranian militias.
This has nothing to do with religion and everything to do with consolidating Tehran’s hegemony. Iran previously abused its relationship with states like Morocco, Algeria, Bahrain, Sudan and Senegal by sponsoring Shiite evangelical activity, with a view to establishing a fifth column of loyalists. Meanwhile, in western Syria, Tehran and the Assad regime have been engineering demographically loyal communities in strategically vital areas. This included handing out visas to the families of foreign militants, while populations perceived as sympathetic to the rebels were either terrorized into exile or evacuated as part of cease-fire deals.
Such sectarian strategies are gradually converting Iraq, Syria and Lebanon into vassal states, affording Tehran strategic depth in its efforts to neutralize American economic pressures and attain regional supremacy. Iran’s transnational militia assets dominate foreign territories, while engaging in money laundering, commercial activities, smuggling and exporting Iran’s theocratic model. Although Iran’s Iraqi assets are paid directly from Baghdad’s state purse, Hezbollah and Syrian militants have been experiencing wage cuts as sanctions bite. They are thus resorting to creative methods of revenue generation.
Certain Iraqi and Lebanese financial institutions have reportedly been embarking on money laundering schemes for syphoning hard currency toward Tehran. Iran’s Central Bank governor was recently in Baghdad seeking to consolidate Iranian influence over Iraq’s banking system and create a “financial apparatus” for circumventing sanctions. Iraqi militant Shibl Al-Zaidi has been using a diplomatic passport for laundering dollars via Beirut airport. Mosul residents complain about illegal paramilitary checkpoints for taxing passers-by, just as Daesh extorted money from the local populace.
President Hassan Rouhani’s recent Iraq visit produced deals in the fields of oil, trade, health and bilateral rail infrastructure. Both China and Iran are keen for this rail network to run through to Latakia, and there are discussions about an Iranian-Iraqi-Syrian “free trade area.” Iran and Iraq pledged to boost bilateral trade from $12 billion to around $20 billion, despite the Trump administration giving Iraq nine additional months to wean itself off trade with Iran. Although Iran is Iraq’s third-biggest trading partner, the $9 billion trade imbalance in Tehran’s favor means that Iraqi markets are flooded with Iranian goods.
Prime Minister Adil Abdul-Mahdi was mocked for blaming Argentina for epidemic quantities of drugs flooding into Iraq, despite his officials acknowledging that around 80 percent of narcotics arrive via Iran. Some observers estimate that Hezbollah’s worldwide narcotics and crime revenues dwarf the estimated $700 million it had been receiving annually from Tehran. Iran’s leaders have been pressuring the heavily indebted Assad regime to repay massive loans, while securing lucrative reconstruction and commercial opportunities.
Like a game of whack-a-mole, if Iran’s proxies are forced out of one economic sector, they pop up and thrive in a dozen others
Baria Alamuddin
Hezbollah’s control of the Lebanese Health Ministry grants it the fourth-largest ministerial budget of $338 million annually. Hezbollah could exploit this to offload onerous expenditure on wounded war veterans, while facilitating its position in the medical goods trade. Hezbollah’s monopolization of swathes of the economy is enmeshing Lebanon in a plethora of criminal activities. One wonders how the “Party of God” rationalizes its exploitation of Syrian refugees via people smuggling and prostitution.
The recent designation of Hezbollah in its entirety as a terrorist organization will complicate the UK’s relations with Lebanon. However, such measures must compel Lebanon to acknowledge the dangers of Hezbollah’s increasing stranglehold. With the US, Britain and others finally getting serious about isolating Iran-linked entities, Lebanon, Iraq and Syria risk being cut off from global financial and political institutions.
With US forces poised to withdraw from Syria, Iran’s allies are now resolved to pushing the Americans out of Iraq. President Donald Trump’s comments about using troops in Iraq to “do something” in Syria and “watch” Tehran have acted as a lightning rod for anti-US sentiments. Evicting Americans from Iraq is one of the few things that the Sadrists and Hashd politicians, who dominate the government, agree on.
Iran routinely evades sanctions by using Iraqi documentation for ships carrying its oil. The plethora of options for oil smuggling and sanctions circumvention — including bartering oil in exchange for goods with Far Eastern recipients reluctant to implement US measures — means that not only is Iran still able to derive oil income, but the rewards from this trade go disproportionately to state and paramilitary entities overseeing these black-market activities. Poorly implemented containment efforts may paradoxically encourage the regime to become even more reliant on its transnational assets.
Like a game of whack-a-mole, if Iran’s proxies are forced out of one economic sector, they pop up and thrive in a dozen others. The US and its European counterparts must stop working to undermine each other over Iran policy and begin cooperating to develop a more sophisticated and holistic approach if they are to eradicate these parasitic entities from the Middle East. Such a multi-faceted strategy should address money laundering, narcotics smuggling, propaganda, militancy, and sectarian incitement, while ensuring that Iran doesn’t rapidly become the dominant force in eastern Syria too.
After years of international efforts in support of stability and national unity in Iraq, Syria and Lebanon, Iran’s activities are fanning the flames of conflict and sectarianism, with catastrophic global implications. It is long past time that the international community began treating the Iranian menace with the seriousness it deserves.
• Baria Alamuddin is an award-winning journalist and broadcaster in the Middle East and the UK. She is editor of the Media Services Syndicate and has interviewed numerous heads of state.
