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Havoc in the Middle East backgrounder

How Hezbollah Makes Money

It’s expensive to maintain and supply Hezbollah’s estimated arsenal of over 65,000 missiles and rockets aimed at Israeli population centers. Here’s how the world’s best-funded terror group supports itself. Share this:

Hezbollah's Iranian Sugar Daddy

Tehran provides Hezbollah with large sums of money to fund its operations.

Since 2001, Iranian support for its terror proxy has fluctuated from about around $200 million to up to $1 billion a year. This has allowed Hezbollah to obtain advanced weaponry—including its highly advanced rocket arsenal—and pose an asymmetric and conventional military threat to Israel and the West.

Iran also has an extensive smuggling network and uses its IRGC and intelligence apparatuses to funnel money to its terror proxy. The United Nations Interim Force in Lebanon (UNIFIL) forces signed “protection agreements” with Hezbollah and turned a blind eye to Hezbollah’s weapons giving them even more leverage.

Bribing the Locals in Lebanon

While providing social services to the Shiite community in Lebanon, Hezbollah manipulates the population’s feelings of repression and resentment at Christians and Israeli Jews. It is a ‘social jihad’ intended to increase its popularity and its grip on the local population.

Hezbollah provides orphanages, summer camps, clinics, and related organizations, all of which help solicit donations.

The group’s portrayal of splitting itself into wings (i.e. a military wing separate from political activity) helps in this endeavor by distancing social services from jihad, although both are fundamentally linked.

Much of this money earned has actually gone towards rewarding the families of suicide bombers.

Zakat as a Religious Obligation

Zakat is an annual obligatory tax on all Muslims and is one of the five pillars of Islam.

Jihad is one area that can receive this money, and mosques and other Islamic organizations often have boxes to put money specifically for zakat.

Hezbollah has helped create mosques and other associations, including charities, to raise funds and exploit the mandatory tax, including in Germany, according to a report from the country’s Interior Ministry. The money from these mosques goes directly to financing the terror group’s activity in Lebanon.

Beyond Germany, European Union (EU) members of Lebanon-based peacekeeping forces pay Hezbollah to not attack them, which is another source of European funding.

Criminal Activity Outside of Lebanon

Hezbollah’s transnational criminal activity extends throughout the entire world and is a major source of funding.

One aspect is fraudulent enterprise that includes counterfeiting, money laundering, and related acts. Hezbollah, for example, has a $20-$30 million illicit scam industry in the US alone, which includes cigarette smuggling, credit card fraud, faulty PlayStations, laptops, brand name clothing, and numerous other goods.

In December 2011, federal prosecutors accused three Hezbollah-linked financial institutions with laundering over $480 million. Furthermore, Iran produces counterfeit US dollars, among other currencies, that in part funds Hezbollah, largely from a printer located in Baalbek, Lebanon.

Sanctions Take a Bite Out of Hezbollah Profits

The US, Canada, Israel, and the Netherlands have designated all of Hezbollah as a terrorist organization and have sanctioned it.

Several Gulf Arab states have also sanctioned the group, but several European countries only designate Hezbollah’s “military wing,” thereby leaving room for fundraising through European channels by distinguishing militant activity from political activity.

The United Kingdom banned Hezbollah’s terror wing in 2000 and its military wing in 2008. Australia also banned the military wing in 2003.