New Sanctions Target Hamas and Hezbollah Amid Renewed Cooperation

The U.S. has accelerated the pace with which it is sanctioning Iran’s terrorist proxies in the Middle East as part of a concerted strategy to curtail Tehran’s malign efforts to dominate and destabilize the Middle East, which have sharply escalated since the 2015 Joint Comprehensive Plan of Action (JCPOA). The intensified sanctions campaign keeps with the letter and spirit of the nuclear deal. In an August 2015 letter to Rep. Jerrold Nadler (D-NY), President Barack Obama wrote, “Critically, I made sure that the United States reserved its right to maintain and enforce existing sanctions and even to deploy new sanctions to address those continuing concerns [over Iran’s destabilizing regional activities].”

The latest batch of sanctions directly targeted individuals and entities with close links to Tehran which have played a vital role in propagating Iranian influence in the Palestinian territories and Lebanon. On January 31, the State Department designated Hamas leader Ismail Haniyeh and Harakat al-Sabireen, a Hezbollah-style terror group active in the West Bank and Gaza Strip, as Specially Designated Global Terrorists (SDGTs), noting that they are “sponsored and directed by Iran.” The State Department sanctions were followed in short order by the February 2 designation of six individuals and seven businesses affiliated with Hezbollah by the Treasury Department’s Office of Foreign Assets Control (OFAC). “The Treasury Department will continue to sever Hizballah from the international financial system, and we will be relentless in identifying, exposing, and dismantling Hizballah’s financial support networks globally,” said Treasury Secretary Steven Mnuchin announcing the sanctions.

The new sanctions targeting Hezbollah and Hamas come at an opportune time, as the terrorist organizations have moved to reconcile and reinvigorate their cooperation as part of the Iran-led “resistance” axis in recent months. Iran has exerted considerable influence over Hamas, the Sunni Islamist terror group in control of the Gaza Strip, dating back to 1993 when Iran pledged $30 million in annual support for Hamas’ anti-Israel operations. Hamas had consistently enjoyed this financial support, in addition to military training, until disagreements over Iran’s role in Syria created a rift between the two parties. Hamas’s opposition to Iranian interests in Syria also alienated it from the Assad regime and Hezbollah, the other partners in the “resistance” axis. In 2012, Hamas leadership lost their safe haven in Damascus due to the group’s support for the Syrian opposition.

As Hamas’s isolation increased and the Iran-led intervention in Syria ensured Assad’s continued survival, Iranian favor once again returned to Hamas to the tune of “tens of millions of dollars.” At Iran’s behest, the Assad regime and Hezbollah have also moved to repair their fractured relations with Hamas in recent months in order to rebuild the “resistance” axis. The effort to reintegrate Hamas into the Iranian sphere of influence furthers Iran’s hegemonic ambitions and indicates with major combat winding down in Syria and Iraq that Iran is now seeking to reorient its focus to “resistance” activities against Israel. The decision to reprioritize hostilities against Israel is understandable given that the Iran-led resistance axis reached the apex of its popularity in the Arab world in the years following the 2006 Israel-Hezbollah war, while Iran and Hezbollah’s meddling in Iraq, Syria, and Yemen has served to inflame sectarian tensions throughout the Middle East and erode their standing.

Giving credence to this notion, Hamas’s second in command, Saleh al-Arouri, led a Hamas delegation to Tehran in October 2017 that met with Quds Force Commander Qassem Soleimani, who assured them that “Iran’s support to the resistance is the main priority now.” Arouri, who has vacated his safe haven in Qatar and set up shop in Hezbollah’s Beirut stronghold, subsequently met with Hezbollah Secretary General Hassan Nasrallah on November 1. According to media reports of the meeting, both sides stressed their willingness to place their “misunderstandings” over Syria in the past and form a united resistance front against Israel.

Israel is viewing Hamas’s rapprochement with Iran and Hezbollah warily. Israeli Defense Minister Avigdor Liberman accused Hamas, which has found it increasingly difficult to attack Israel from Gaza, of attempting to set up terrorist infrastructure in south Lebanon in order to facilitate attacks against Israel. “We will not allow [a situation where] on the one hand Hamas talks about the humanitarian crisis [in Gaza] and on the other hand it will try to carry out terrorist attacks from the West Bank or to build terrorist infrastructures in southern Lebanon,” warned Liberman. “The sudden friendship between senior Hamas official Saleh al-Arouri and Hezbollah [chief] Nasrallah is something we are following, and every development will have an appropriate response.”

Iran, under the direction of Qassem Soleimani, has created a veritable foreign legion of proxy militias in Syria, Iraq, and the broader Middle East working in concert as a transnational movement to bolster Iranian influence and carry out Iranian foreign policy objectives throughout the region. Nasrallah has indicated a desire to marshal these forces against Israel in the event of a future war. “I’m not saying countries would intervene directly — but it [an Israeli attack on Lebanon] would open the door for hundreds of thousands of fighters from all around the Arab and Islamic world to participate in this fight — from Iraq, Yemen, Iran, Afghanistan, Pakistan,” warned Nasrallah in June 2017.

The Hamas-Hezbollah reconciliation lays the groundwork for a future struggle with Israel that may encompass fighting on multiple fronts with Hamas, Hezbollah, and other Iranian proxies all joining the fray. The Trump administration should proceed with urgency in its quest to financially disrupt the efforts of Hamas, Hezbollah, and the Iranian proxy network to sow instability in the Middle East. One such mechanism at the administration’s disposal is to continue to urge the Financial Action Task Force (FATF), the global anti-money laundering and anti-terror finance standards body, that Iran should remain listed as a high risk jurisdiction for its ongoing anti-money laundering/combating financing of terrorism (AML/CFT) deficiencies at its upcoming plenary meeting in June 2018.

The AML/CFT counter-measures against Iran were suspended in June 2016, and since that time, Iran has made only nominal efforts to bring its financial system into compliance with international banking standards. Crucially, Iran has ramped up rather than curtailed its illicit finance of terrorism since the suspension took effect. Iran has sought to define deviancy down in justifying its enhanced support for terrorist groups such as Hamas and Hezbollah (to say nothing of Palestinian Islamic Jihad, Al-Sabireen, the Taliban, the Houthis, the IRGC-Quds Force, and a host of sanctioned proxy militias in Iraq and Syria)  unilaterally branding them as “anti-colonial” or “liberation” movements rather than terrorist organizations.

The Trump administration must not allow this charade to stand—especially since Iran’s hardline power centers will continue to resist any meaningful impediment to financing the regime’s favored regional proxies. Iran’s material support for Hamas and Hezbollah has sown instability, and its encouragement of the terrorist groups’ reconciliation has served to strengthen Iran’s hand in the region. Clearly emboldened, the Iranian threat appears on the cusp of metastasizing. On February 10, Iran infiltrated Israeli airspace with a drone, an unprecedented escalation.

Weakening the standards for Iran would send the wrong message that Iran and other rogue actors stand to gain concessions through provocations. Accordingly, the FATF was justified in maintaining Iran on its gray list, but the international community must remain vigilant against Iranian attempts to enact cosmetic changes to its financial regulations.

Jordan Steckler is a research analyst at United Against Nuclear Iran (UANI).