United States Institute of Peace

The Iran Primer

US Sanctions Iran Currency

      On June 3, the United States imposed sanctions for the first time on Iran’s currency, the rial. Foreign financial institutions may now face penalties if they “knowingly conduct or facilitate significant transactions” involving the rial― which has already lost half its value since January 2012. The executive order’s objective is to render the currency unusable outside of Iran, a senior administration official said during a conference call. Iran conducts very little trade in the rial. So the measure may also be aimed at further depreciating its value and making Iranians feel more uneasy about holding their own currency. The executive order also authorizes new penalties on Iran’s automotive industry. And it allows the sanctioning of any individuals who help Iranians and others previously blacklisted by the Treasury.

      The Obama administration has now implemented nine sets of sanctions on Iran. An official said that the timing of the latest measure was not tied to the June 14 presidential election. So the timing may have more to do with pressuring Iran ahead of nuclear negotiations expected to resume after the election hiatus. The following is the complete text of the White House press statement, including links to the executive order and the president’s message to Congress.
            Today the President approved a new Executive Order (E.O.) to further tighten U.S. sanctions on Iran and isolate the Iranian government for its continued failure to meet its international obligations.  
            This new action targets Iran’s currency, the rial, by authorizing the imposition of sanctions on foreign financial institutions that knowingly conduct or facilitate significant transactions for the purchase or sale of the Iranian rial, or that maintain significant accounts outside Iran denominated in the Iranian rial.  While the rial has lost half of its value since the beginning of 2012 as a result of our comprehensive sanctions, this is the first time that trade in the rial has been targeted directly for sanctions.
            Taking aim at a major revenue generator for Iran, the E.O. authorizes the imposition of new sanctions against those who knowingly engage in significant financial or other transactions for the sale, supply, or transfer to Iran of significant goods or services used in connection with Iran’s automotive sector, building on the sectoral sanctions in the Iran Freedom and Counter-Proliferation Act of 2012 (IFCA) that target Iran’s shipping, shipbuilding, and energy sectors. 
            Further increasing the pressure on the Iranian government, the E.O. authorizes the imposition of additional sanctions on persons who provide material support to Iranian persons and certain other persons designated pursuant to Iran sanctions authorities that are included on the list of Specially Designated Nationals and Blocked Persons (SDN List) maintained by the Department of the Treasury. 
            The E.O. also implements and builds upon certain sanctions set forth in the IFCA, signed into law by the President on January 2, 2013, as a part of the National Defense Authorization Act for Fiscal Year 2013. 
            Pursuant to today’s action, the following activities will be subject to sanctions:
The Iranian Rial:  The significant transactions for the purchase, sale of, or holding of significant funds or accounts outside Iran denominated in the Iranian rial. 
Iran’s Automotive Sector:  The sale, supply, or transfer to Iran of significant goods or services used in connection with the manufacturing or assembling in Iran of light and heavy vehicles including passenger cars, trucks, buses, minibuses, pick-up trucks, and motorcycles, as well as original equipment manufacturing and after-market parts manufacturing relating to such vehicles. 
Material Support to the Government of Iran:  Providing material support to Iranian persons and certain other persons designated pursuant to Iran sanctions authorities that are included on the SDN List (in each case other than certain Iranian depository institutions).  This provision includes an exception for certain Iranian depository institutions and certain activities relating to the pipeline project to supply natural gas from the Shah Deniz gas field in Azerbaijan to Europe and Turkey.
            The steps taken today are part of President Obama’s commitment to prevent Iran from acquiring a nuclear weapon, by raising the cost of Iran’s defiance of the international community.  Even as we intensify our pressure on the Iranian government, we hold the door open to a diplomatic solution that allows Iran to rejoin the community of nations if they meet their obligations.  However, Iran must understand that time is not unlimited.  If the Iranian government continues down its current path, there should be no doubt that the United States and our partners will continue to impose increasing consequences.


Part I: Iran-Syria Religious Ties

Mehdi Khalaji

            Iran and Syria are unlikely bedfellows. Iran has been an Islamic republic—and the world’s only modern theocracy—since the 1979 revolution. Syria has been a rigidly secular and socialist country since Hafez Assad took over in 1970. Ethnically, Iran is predominantly Persian, while Syria is predominantly Arab. Yet Tehran and Damascus have one of the region’s strongest alliances—based in part on religion. Iran is Shiite-dominated and Syria is predominantly ruled by Alawites, a Shiite offshoot. They share a common interest in the survival of a minority in the Middle East, which is about 85 percent Sunni Muslim.

      The ties were again reflected in the Iranian regime’s call for volunteers to protect Shiite shrines in Syria in early May 2013, after Syrian rebels reportedly ransacked the shrine of Hojr Ibn Oday, a revered Shiite figure, in Damascus. The Nusra Front, a Sunni militia affiliated with al Qaeda, claimed responsibility for exhuming Oday’s remains. Syria is home to some 50 Shiite shrines and holy places. For centuries, Iranians have performed pilgrimages to Syria. The holiest is the Tomb of Zaynab (left) on the outskirts of Damascus. Mehdi Khalaji explains the religious ties that bind two of the most strategically important countries in the Middle East.
What religious doctrines do Shiites and Alawites share? How have the Iranian and Syrian regimes bonded through belief?
            The Alawite sect is a relatively minor branch of Shiism. Alawis share the Shiite belief that leadership of the Islamic world—and rights to interpret the faith—should have descended through Prophet Mohammed’s family after his death. They believed that Ali—who was both the prophet’s cousin and son-in-law—should have become the first caliph in the 7th century. Shiite literally means “follower of Ali.” In contrast, Sunnis believe that leadership should instead be inherited by the prophet’s early advisers. Ali was briefly the fourth caliph, but otherwise leadership of the Islamic world has since been largely dominated by Sunnis.
            Since the 9th century, Alawites struggled for legitimacy and recognition from other Muslims. One important breakthrough was a fatwa issued in the 1970s by Musa Sadr, an Iranian cleric and head of Lebanon’s Shiite community. He formally announced the acceptance of Alawites as Shiites, a move that significantly opened the way for the sect’s recognition within the general Shiite community.
            In recent decades, Twelver Shiites have also made serious efforts to minimize theological differences between mainstream Shiism and Alawites. This has been partly due to the decline of Arab nationalism and rise of the religious factor in making political alliances and defining identity. The shift is palpable in many ways. Shiite clergy use Damascus as a bridge to connect Shiites in Iran, Iraq, Kuwait and Lebanon together. The Syrian government has allowed Shiites to visit various holy sites, especially the Sayyidah Zaynab Mosque.
How are Alawites different from Shiites?
            Alawites, or “Alawis,” are primarily known in the Islamic orthodoxy as “Nusayris.” Nusayri-Alawi is an esoteric sect that is relatively unstudied because members have historically kept core beliefs secret.
            In terms of theological principles, rituals, and jurisprudence, Twelver Shiism and the Nusayri-Alawi faith have few commonalities. (Iran practices Twelver Shiism, so named because of the belief in twelve divinely ordained Imams, or leaders.) For centuries, Nusayri-Alawis were actually considered heretics by both Shiites and Sunnis and often faced persecution. For instance, they venerate Ali as a supreme and eternal God.
            They were only embraced by Muslims under certain advantageous political circumstances. Their historical position is similar to the Church of Jesus Christ of Latter-day Saints among Christians. Both experienced difficulties being recognized by the orthodoxy. Both are secret sects. And outsiders have minimal access to their core beliefs and administration. 
            One major difference between the two Shiite branches is the source of religious authority. Twelver Shiites are led by an ayatollah, who is the source of emulation on juridical issues and rituals. The faithful are also obligated to pay religious taxes to their ayatollahs. But Alawis do not have ayatollahs. So the two sects have not historically had the same religious-financial bonds. 
What are the political bonds between Iran’s Shiites and Syria’s Alawites?
            The political bonds between Shiites and Alawites are more about identity and survival of a minority than about religious doctrine. The Middle East is dominated by Sunnis. Iran and Iraq are the only Shiite majority countries in the region, while Syria was for decades the only major Arab country ruled by the Shiite offshoot. Iraq was ruled for nearly a quarter century by Saddam Hussein, a Sunni. So Iran and Syria have had natural psychological bonds that turned into a political alliance over common religious identity. The bonds were further fostered after the rise of a Shiite-dominated government in Iraq—the country that separates them—in 2003. This nascent Shiite bloc was dubbed the “Shiite crescent” by Jordan’s King Abdullah.
            The bonds are also strategic for two isolated governments. The Assad regime’s need for allies in Iran and Lebanon made it ignore the theological differences between Twelver Shiism and Nusari-Alawis. The Islamic Republic of Iran, spurned by the region’s Sunni-led governments, made ties with Alawite brethren in Syria particularly appealing—even though Tehran has actually never referred to Damascus as an Alawi regime. Its official policy toward Muslim countries has been to highlight Islam rather than its specific branches.
            In the end, Iran and Syria actually have very different types of government. Syria’s ruling elite may be Alawite, but the government’s official ideology is Ba’athism, a secular mix of socialism and pan-Arabism. The Ba’ath party is also not only Alawite. It also includes some Sunnis and Christians.
            The governments in Syria and Iran also have different ties to their constituencies. The Alawites are only about 12 percent of the Syrian population. Syrians are predominantly Sunni. In Iran, more than 90 percent of the population is Shiite.
Mehdi Khalaji, a senior fellow at The Washington Institute for Near East Policy, studied Shiite theology in the Qom seminary of Iran. 


Online news media are welcome to republish original blog postings from this website in full, with a citation and link back to The Iran Primer website (www.iranprimer.com) as the original source. Any edits must be authorized by the author. Permission to reprint excerpts from The Iran Primer book should be directed to permissions@usip.org

Part II: Shiite Holy Sites in Syria

Garrett Nada

            Syria is home to some 50 sites holy to Shiites. Some have been badly damaged in the fighting between Syrian government forces and rebels since 2011. At least one shrine has been reportedly desecrated by Sunni extremists. Several top Iranian officials have condemned attacks on holy sites. “Such acts could ignite the fire of religious rifts among followers of the divine religions,” warned Foreign Minister Ali Akbar Salehi in May 2013. The following are profiles of seven major holy sites in Syria.

Sayyidah Zaynab Mosque and Shrine
      The gold-domed shrine, located near Damascus, is one of the holiest sites in Shiite Islam outside of Iraq and Saudi Arabia. It houses the remains of Zaynab, granddaughter of the Prophet Mohammed and daughter of Ali ― the fourth leader of the early Islamic empire and one of the most revered figures in Shiism. She was taken captive after her brother Hossein fell in battle against the Ummayad Dynasty near Karbala, which is in present-day Iraq. The shrine commemorates the seventh-century tragedy. The adjoining mosque was completed in 1990 and can accommodate more than 1,000 worshippers.
            Thousands of Iranians reportedly used to visit the site each year before the Syrian conflict erupted in 2011. Shiite fighters from Lebanon and Iraq have since flocked to the area to protect the shrine from extremist Sunni rebels. One Iraqi was reportedly shot by a sniper in May 2013.
Shrine of Hojar Ibn Oday
      Hojr Ibn Oday was a close supporter of Ali, the cousin and son-in-law of the Prophet Mohammed. Ali was also the first imam, or Shiite leader. Oday led the early Muslims to victory in several battles. But the Ummayad Dynasty killed him and his sons in 660. His remains were enshrined in Adra, which is now a Damascus suburb.
      Syrian rebels reportedly ransacked the shrine in late April 2013. The Nusra Front, an al Qaeda affiliate, claimed responsibility for unearthing Oday’s remains. Iranian officials reacted angrily to the desecration. “Undoubtedly, such savage acts by the terrorists in Syria are indicative of their disbelief in Islam,” Iran’s parliamentary speaker, Ali Larijani, said on May 4, 2013.
Sayyidh Ruqayya Mosque
      The Sayiddah Ruqayya Mosque houses the grave of Sukayna, the daughter of Hossein. She was captured after the Battle of Karbala and died at age four in an Ummayad prison. But her remains were moved to their current location in Damascus, according to tradition.
      In 1985, Iranians reportedly funded construction on the mosque surrounding the tomb. Pilgrims have traditionally taken home small pieces of clay from Karbala as keepsakes.
      In May 2012, Sunni extremists assassinated the mosque’s imam, Sheikh Abbas al Laham, according to Iranian news outlets.
Al Nuqtah Mosque
      The al Nuqtah Mosque in Aleppo houses a stone believed to be stained with Hossein’s blood. After the Battle of Karbala, the Ummayad army captured members of Mohammed’s family and forced them to march to Damascus. They stopped near a Christian monastery near Aleppo, according to one version of the story. A monk saw light emanating from Hossein’s head at the end of a spear. He paid the soldiers to let him spend the night next to the head. The monk placed it on a stone, which was stained red from Hossein’s blood. He spent the night talking to it and weeping, and he converted to Islam. The head was then taken to Damascus.
            The Allepo site was reportedly turned into a mosque in the 10th century. An explosion in 1920 destroyed much of the structure. But a group of Shiites rebuilt it in the 1960s.
Bab al Saghir Cemetery
      The ancient Damascus cemetery contains the graves of several prominent companions of the Prophet Mohammed including:
• Umm Kulthum, daughter of Ali and Fatima (Mohammed’s daughter)
• Bilal ibn Rabah, Mohammed’s muezzin (caller to prayer) and one of the first Muslims
• Sukaynah, another daughter of Hossein
• Fidha, the maid of Fatima
            The heads of Hossein’s 16 companions who fought with him at Karbala are also buried here. Pilgrims tie small strips of cloth to grates of the tombs and ask the deceased for assistance. They return to collect the strips after the petition has been granted. Some spend the night in the cemetery in hopes of receiving blessings.
The Great Mosque of Damascus
      The ancient mosque in Damascus is one of the world’s oldest and largest Muslim houses of prayer. It is in the center of the old city, which was designated as a U.N. world heritage site in 1979. The mosque is a popular destination for Sunni and Shiite pilgrims.
      The site was originally home to a Roman temple dedicated to Jupiter. It was then converted into a church in the fourth century. The church’s main draw was a unique relic ― the head of John the Baptist. The Ummayad Dynasty razed the church and built the grand mosque in the early seventh century.
      The Great Mosque of Damascus was known for detailed mosaics depicting paradise across its walls. But the Turkic conqueror Timur destroyed the mosque 1401. The Arabs rebuilt it. It was rebuilt again after a fire damaged the structure in 1893.
            The mosque is particularly significant to Shiites because captured members of Mohammed’s family were imprisoned in the complex after the Battle of Karbala. Some Shiites believe Hossein’s head was buried beneath a shrine inside the mosque. Others contend it was taken to Egypt, where another mosque has a shrine thought to house the head. Both Christians and Muslims visit shrine containing the head of John the Baptist.
The Great Mosque of Aleppo
      Built by the Ummayad Dynasty in the eighth century, the mosque is the largest and one of the oldest in Aleppo. It houses the remains of Zecharia, father of John the Baptist, according to tradition. The mosque has been destroyed, rebuilt and expanded several times. Most of the main structure was built between the 11th and 14th centuries.
      The mosque was severely burnt during clashes between Syrian rebels and government forces in October 2012. The rebels gained control of the area surrounding the mosque in early 2013. But the 11th-century minaret collapsed in April amidst another round of fighting. The heavy damage to the U.N. world heritage site prompted international outrage.
Garrett Nada is a Program Assistant at USIP in the Center for Conflict Management.
Online news media are welcome to republish original blog postings from this website in full, with a citation and link back to The Iran Primer website (www.iranprimer.com) as the original source. Any edits must be authorized by the author. Permission to reprint excerpts from The Iran Primer book should be directed to permissions@usip.org

Photo credits: 

Hojr Ibn Oday by Anwar Rizvi (Flickr: Zareeh of Hujr ibn Adi) [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

Sayyidah Ruqayyah Mosque by Bernard Gagnon (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC-BY-SA-3.0-2.5-2.0-1.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

Al Nuqtah Mosque by Toushiro (Own work) [Public domain], via Wikimedia Commons

Bab al Saghir Cemetery by Attariyaa via Photobucket

The Great Mosque of Damascus by James Gordon from Los Angeles, California, USA [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

The Great Mosque of Aleppo by Preacher lad (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0) or GFDL (http://www.gnu.org/copyleft/fdl.html)], via Wikimedia Commons



Report: Sanctions Empower Regime

            Sanctions have had  the unintended consequence of empowering the Iranian regime, according to a new report by the Center for Arms Control and Non-Proliferation. Sanctions have signaled international opposition to Iran’s proliferation activities. But Iran has continued to defy demands by the international community to halt sensitive aspects of its nuclear program.
Tehran’s negotiators have stipulated that they will not make concessions without the lifting of sanctions. Yet the multilayered set of measures would “be difficult to lift in the timely, sequential way that a compromise would require,” according to the report. Increased emphasis on sanctions could be impeding a negotiated solution to the Iranian nuclear issue. The following are excerpts, followed by a link to the full report.

Political Impact
            Inadvertently helping the government and its allies: Sanctions have helped the existing Iranian regime to consolidate its power and help its allies. The state has taken a
more active interventionist role in the economy to manage the economic turbulence induced by
sanctions, and it has been able to allocate favors and take other measures that keep its supporters from feeling the full pain of sanctions. On the whole, it is likely that this dynamic
has increased reliance on the state which, in turn, may have the indirect effect of blunting
criticism of the government and its policies...
Have Sanctions Affected Iran’s Nuclear Decision-Making?
            Sanctions signal international resolve & commitment to a peaceful resolution: A key way in which sanctions have succeeded is as a signaling mechanism: sanctions show that the international community is united against Iran’s continued defiance, and that it is willing to take significant action to facilitatea negotiated solution. The unprecedented degree of international unity against Iran’s nuclear program can be seen in the imposition of UN Security Council sanctions, which require approval by Russia and China, nations which have previously been reluctant to sanction Iran.
            However, Iran has not halted its nuclear development: Iran has not yet acceded to the desired limits on its nuclear program –it has continued to enrich uranium to levelsclose to weapons-grade, and it has proceeded with the upgrading and expansion of nuclear facilities. This continued progress suggests that sanctions alone are unlikely to convince Iran to change course: robust negotiations in which incentives (including sanctions relief) are offered to Iran will be necessary to persuade Iran to comply with international demands.
            There are some signs that Iran will be persuaded: In recent months, despite some shows of grandiose anti-Western rhetoric from Iranian leaders, there are some indications of a willingness to make a deal. For instance, in November 2012, a report from Iran’s ministry of intelligence argued that diplomacy was a “necessary” way to resolve the problem and avoid a military attack.
            More recently, in talks with the P5+1 countries (the United States, the United Kingdom, France, Germany, Russia, and China) in late February in Almaty, Kazakhstan, Iranian officials appeared less hostile and more open to the negotiating process, and gave signals that they would be willing to accept some of the international community’s demands, such as the suspension of 20% enriched uranium fuel.
            Compared with previous negotiations, in Almaty, the P5+1 exhibited increased willingness to ease sanctions. This shift in the Western negotiating position, notably described as a “turning point” by Iranian foreign minister Saeed Jalili, contributed to a positive shift in the tone of the negotiations, although the talks ultimately yielded no concrete results. However, an increasing reliance on sanctions and the apparent inflexibility of the measures have created doubts in Iran about Western intentions: Sanctions have increased in both scope and number, and the sanctioners’ willingness to lift the measures has appeared dubious, with therecent limited exception of the first round of Almaty talks in February.
            In this way, the complexity of the set of sanctions may be impeding negotiations by creating doubts in Iran about whether negotiations in fact will lead to significant reductions.
There are two main reasons that an increased emphasis on sanctions could be impeding a negotiated solution. First, existing sanctions overlap with one another in complex ways, which means it will be difficult to start rolling them back, even if Iran does start to make the desired concessions…
            Second, and more importantly in the long term, many sanctions have been imposed on Iran for actions unrelated to nuclear proliferation, such as support for terrorist groups and human rights abuses. This means that making concessions on its nuclear program is unlikely to help Iran get the full relief from sanctions it seeks. From Iran’s perspective, there may be no useful alternative to waiting out the sanctions and continuing its nuclear development to increase its bargaining power.
            For sanctions to serve as a true tool of leverage, sanctioning nations need to be able to credibly promise that they will lift sanctions if they get what they want, which is a key weakness of current Iran policy. According to the International Crisis Group, under the current “Spider Web” of sanctions, the international communityhas given up the “nimbleness” it needs to make sanctions an effective tool at the negotiating table.

US Charges Iran More Active Worldwide

            On May 31, two senior U.S. officials detailed Iran’s growing role in extremist activities worldwide. Tehran was directly or indirectly involved in the planning of attacks in Europe, Southeast Asia and Africa in 2012, said the officials. The following are excerpts from the background briefing.  
            SENIOR ADMINISTRATION OFFICIAL ONE:  Yesterday we released at the State Department the annual Country Reports on Terrorism for 2012.  And one of the most noteworthy conclusions when we put that report together was a marked resurgence of terrorist activity by Iran and Hezbollah.  The tempo of operational activity was something we haven’t seen since the 1990s, with attacks plotted in Europe, Southeast Asia, and Africa in 2012 alone.
            We believe this is an alarming trend.  It’s borne out by the facts and it merits closer inspection as we evaluate the landscape of terrorist activity globally.  Add to this, of course, is the deepening commitment both Iran and Hezbollah have made to fight and kill on behalf of the Assad regime in Syria.  That involvement, of course, is hardening the conflict and threatening to spread the violence across the region.
            Hezbollah and the Iranian leadership share a similar world view and strategic vision and are seeking to exploit the current unrest in the region to their advantage.  This approach has increased sectarian tensions and conflict and serves further as a destabilizing force during a time of great change throughout the region.
            But there’s also an encouraging trend at work and one I think that’s received relatively little attention in our view, and that’s the increasingly firm response among governments around the world to these actions.  We’re seeing prosecutions of Hezbollah operatives in multiple jurisdictions around the world, ongoing investigations, and discussions about proscribing the group as a terrorist organization. 
            Now just to recap a couple of the notable incidents in 2012 that we also covered in our report, in February of this year the Bulgarian Government publicly implicated Hezbollah in a July 2012 bombing in Burgas that killed five Israelis and one Bulgarian citizen and injured 32 others.  In March of this year, a court in Cyprus found a Hezbollah operative guilty of charges stemming from surveillance activities carried out in 2012 against Israeli tourists.  Thailand is currently prosecuting a Hezbollah member for his role in helping plan a possible terrorist attack in that country.  We understand that trial will begin in mid-June.  The Qods Force is suspected of directing terrorist attacks in Georgia, India, Thailand, and Kenya in 2012. 
            You will also recall that the Qods Force was implicated in a 2011 plot to assassinate the Saudi Ambassador to the United States in Washington.  Manssor Arbabsiar was sentenced yesterday to 25 years in prison for his involvement in that plot.  We see no signs of this activity abating in 2013.  In fact, our assessment is that Hezbollah and Iran will both continue to maintain a heightened level of terrorist activity and operations in the near future.
             Now turning to Syria, Hezbollah has long been involved in the conflict and, of course, is making no – no longer making any effort to disguise or downplay the extent of its commitment to kill or die on behalf of the Assad regime.  A large number of Hezbollah fighters are now operating in Syria, even though the Lebanese Government has sought to disassociate Lebanon from the Syrian crisis in the best interest of the Lebanese people.  The group is openly undermining that policy and working closely with Iran to provide a range of support to the Assad regime, including fighters, weaponry, and training a large pro-regime militia.
            We judge that Iran and Hezbollah have enlisted Alawite, Iraqi, Shia militant and terrorist groups to participate in counter-opposition operations in Syria.  All of this support is helping the regime brutally crack down on the opposition, kill civilians, and is contributing to regional instability, notably in Lebanon.  And unfortunately, it’s clear that both Hezbollah and Iran’s involvement in Syria is only deepening as they take whatever steps are necessary to ensure that their close ally survives.
            Countering these activities continues to be a priority for the U.S. Government, but we’re also seeing other governments begin to take their own actions in response to Hezbollah’s global presence and operational activity.  Governments are beginning to see Hezbollah for what it is, and there is a shift underway that we detect in the way that other governments are viewing the organization.
            I mentioned the prosecution a minute ago of Hezbollah operatives in Cyprus and the Bulgarian Government’s finding Hezbollah responsibility for the Burgas attack.  These attacks – these activities, of course, led to the most serious discussion we’ve seen within the EU to designate Hezbollah as a terrorist organization.  Crucially, France and Germany have called for Hezbollah’s military wing to be added to the EU’s terrorism list, and we’re watching that discussion very, very closely.
            Recently Bahrain designated Hezbollah as a terrorist organization and is proposing that the GCC take up similar action across the GCC against Hezbollah.  The Arab League Chief Nabil Elaraby recently weighed in on Hezbollah, urging it to stop fighting alongside the Assad regime, urging Hezbollah to reconsider its stance and not get involved in the killing in Syria and stressing that only – the only way to protect Lebanon is to protect Lebanon’s internal unity.  That was issued in an Arab League statement, and I think that reflection of Arab League view is certainly a turnaround in the way Hezbollah is being viewed across the Arab world.
            Of course, Hezbollah’s actions have been condemned by numerous Lebanese political figures for placing Lebanon at risk and placing the country’s interest and those of – and placing Hezbollah’s interest and those of Iran and Assad above those of the Lebanese people.  President Sulayman recently urged Hezbollah to withdraw from Syria. 
            Looking again at the global picture, in Southeast Asia, in mid-June, the Thai Government will begin its prosecution of a Hezbollah operative who was detained in January 2012 and who led police to a warehouse located outside of the city – outside of Bangkok, where police found several thousand kilograms of explosives and bomb-making material.  We’ve also seen countries beginning to crack down on Iran’s terrorist activities with Nigeria and Kenya arresting and prosecuting Iranian operatives who were in their countries engaged in various illicit activities.
            I think I’ll stop there, but it does give you a sense of the global scope of activity we’re seeing on both of these – both the – both Iran and Hezbollah’s part, and as was emphasized in our report released yesterday.  Thank you. 
            SENIOR ADMINISTRATION OFFICIAL TWO:  As a result of all of these activities, and actually a lot of other activities, in our efforts to combat its financial support and its financial activities, we’ve adopted over the last couple of years a new approach.  Traditionally, over the years, what we’ve focused on is trying to go after the terrorist financing as terrorist financing activities of Hezbollah, and we certainly continue to do that.  But what I think you’ve seen over the past several years is expanding the aperture of those efforts in two ways.  The first is taking a comprehensive approach to targeting all of Hezbollah’s illicit activities, and secondly, to focus more than ever before on Hezbollah’s financial activities within Lebanon and trying to make even the Lebanese financial system a hostile environment for Hezbollah to be operating in, so again, a comprehensive approach, an approach that focuses not just on the periphery, but challenging Hezbollah’s ability to conduct financial activities through the Lebanese financial system. 
            We’ve done that a number of ways.  First of all, as I said, in the traditional way of focusing on Hezbollah as a terrorist organization, we’ve implemented a number of financial sanctions with respect to Hezbollah targeting their ties with the Iran Qods Force and just their general conduct within Lebanon.  And I could be happy to go into some of those designations, if people are interested.
            Secondly, we focused on Hezbollah’s activities within Syria and its alliance with the Assad regime and the violence that it’s waging upon the Syrian people and tried to highlight that through our financial and economic sanctions.
            And then finally, and what I think is the most innovative aspect of our strategy, is focusing on Hezbollah’s illicit financial activities, to include its links with narcotics trafficking.  We’ve taken a number of actions in which Hezbollah has been implicated under our drug kingpin sanctions program, and using Section 311 of the Patriot Act to target financial institutions within Lebanon that have been involved in these narcotics money-laundering activities and that have had links to Hezbollah.  These include actions we’ve taken against the Lebanese Canadian Bank, and just within the past couple of months, against two exchange houses within Lebanon – the Rmeiti Exchange and the Halawi Exchange. 
            We’ve combined this with intense engagement with the Lebanese Government to try to ensure that all Anti-Money Laundering and Counter-Terrorism Financing Rules and regulations and international standards are being applied throughout the Lebanese financial system to ensure the Lebanese financial system is clean and safe and integrated into the international financial system appropriately.  But we’ve also made clear that if Lebanon is unable to apply Anti-Money Laundering and Counter-Terrorism Financing laws and regulations and international standards in an appropriate fashion, then it puts its access to the international financial system at risk.
            QUESTION:  Two questions:  One, is there any estimate of the – obviously Iran is making a large effort to supply Assad with arms, Qods Force personnel, advisors, and the like.  Is there an estimate of what, in terms of resources, how much Iran is spending on this, how many billions, for example, per year?  And two, there was a recent episode that’s come to light through Israeli and Nigerian officials, where they claim to have nabbed a Hezbollah cell in Nigeria that was planning attacks on Western targets and Israeli targets.  Do you have any information on that?
            SENIOR ADMINISTRATION OFFICIAL ONE:  We are watching very closely those reports coming out of Nigeria.  We don’t have anything further than what is – has been announced, both by the Nigerian and the Israeli Governments.  But it, again, is reflective of this global scope of operational activity that we’ve been encountering over these last 18, 24 months, and it’s something that we’re very concerned about.  Africa, across the continent, has been an area that Hezbollah in particular has been active.  Of course, they’ve used Africa for fundraising and traditionally, but they’ve been operationally active in a number of African countries, as have the Iranians, as we saw in the case in Kenya recently.
            SENIOR ADMINISTRATION OFFICIAL TWO:  With respect to Hezbollah financing, Iran has always been and remains the primary financial supporter of Hezbollah, and Hezbollah survives on the resources that it derives from its Iranian support.  That’s not to say that it doesn’t derive funds from other places…But Iran still is vital to all of that.  This is one of the reasons, as I said before, why we focus so heavily on ensuring that the Lebanese financial system is not a conducive environment for Hezbollah financial activities. 
            QUESTION:  Homeland Security in November was talking about the links of Hezbollah with drug traffic organizations in Mexico.  Are you not concerned about that at all? 
            SENIOR ADMINISTRATION OFFICIAL ONE:  We are quite concerned about Hezbollah and its global reach.  We don’t have evidence of an operational network – Hezbollah across South America, but it’s something that we watch for very, very, very closely.  We know that Hezbollah as an organization does benefit from fundraising activity or commercial activity that ultimately benefits the organization back in Lebanon.  But as for an operational link to activities in South America, Central America, or Mexico, we don’t have that.
            QUESTION:  I was wondering if you have any estimate on the number of fighters that Hezbollah has in Syria right now.  And I know you said you expect more terrorism in the next year from Hezbollah, but given their involvement in Syria, how will this shape you think Hezbollah’s military calculation going into war with Israel or other conventional things they’ve done in the last few years?
            SENIOR ADMINISTRATION OFFICIAL ONE:  I don’t think we have an estimate on the number of fighters.  I mean there are, of course, a lot of people trying to look at this question.  I think it’s fair to say, however, that the organization has made an all-in commitment to defend and support the Assad regime and is throwing whatever resources are required at that, and of course as reports indicate is suffering the consequences as well in terms of fighters being killed in Syria as well.  But we don’t have an estimate of the numbers. 
            With regard to what these trends indicate for what we can expect for the future and what this means for Hezbollah’s – the potential for destabilizing activity with regard to Israel, I mean I think that’s something that the organization has made a part of its identity.  It is a destabilizing force within the region.  It certainly is so within Lebanon and its actions in Syria and its declarations to essentially define the Syrian conflict as a sectarian conflict, which of course is sparking an intensified fight within the country of a sectarian nature.  These are further indications that the organization itself plays a destabilizing role within Lebanon and then more broadly in the region if we needed further evidence of that.
            QUESTION:  Two questions:  Firstly, do you see any connection between what’s happening in Syria and the sort of surge of sectarian violence in Iraq, number one? And number two, you said we don’t have any evidence of operational networks in Central or South America or Mexico.  Did you have evidence of operational networks in Thailand, Bulgaria, Cyprus, prior to the commission of these attacks last year?  Were you surprised that they had this ability to launch these attacks in these places? 
            SENIOR ADMINISTRATION OFFICIAL ONE:  When we released the report, we noted that the increase in activity is something we haven’t seen since the 1990s.  And the 1990s was a period, of course, where Hezbollah also was operationally active, committing attacks in multiple parts of the world, to include Europe.  So the fact that Hezbollah had operational networks historically in Europe is not new to us, is not surprising.  And in fact, we were already in the spring of 2012 having numerous conversations with European governments about the danger that Hezbollah was posing, and that was on the basis of information we were aware of that indicated an increased operational tempo in Europe. And those conversations coincided then with the events that played out in the summer to include the attack in Bulgaria.  So we were not surprised that – when – ultimately when we started to see the evidence play out and then in the course of the court case in Cyprus.
            QUESTION:  Iran announced a couple of days ago that it is extending a $4 billion line of credit to Syria.  They’re saying that it’s for economic purposes, for reconstruction, and development of business and things like that.  Do you think something like this, given the situation on the ground in Syria, is plausible?  Is it even possible, considering that Iran is heavily under sanctions, financial sanctions, and Syria to some extent as well? 
            SENIOR ADMINISTRATION OFFICIAL TWO:  It’s an important issue to point out that while the Iranian economy is going down the tubes as a result of its own mismanagement of its economy and as a result of comprehensive international sanctions, and while the Iranian people are suffering as a result of that, that Iran still manages to find resources to send to terrorist organizations like Hezbollah and to support the Assad regime’s violence against its own people in Syria. 
            The fact of the matter is, is that Iran and organizations like Hezbollah are acting irresponsibly in this regard and we have a whole wide array of sanctions that we are prepared to deploy when we see financial institutions or other types of institutions around the world that are engaged in sanction-able activity.  And we’ve demonstrated that we’re prepared to use that, and we implement financial sanctions all the time with respect to entities that are involved in financial activities with Iran. 
            Iran is often big on promises.  If we see financial activity that is sanction-able – and that’s an awful lot of different types of financial activity with Iran – we will certainly exercise our tools and ensure that the financial institutions involved are isolated from the international financial system. 

Connect With Us

Our Partners

Woodrow Wilson International Center for Scholars Logo