ILLICIT FINANCE- Mr. Joseph Humire

Good morning once again. It's always a pleasure to be here with you, sharing once again with my colleagues here, Ms. Selina Reula, and hearing once again from the director of the financial unit in Fintrack, and also from the leader of the group, Egmont, Sarah Paquette. What Sarah said and what Selina is going to say, I believe, really is very conceptual about what illicit finance is. What I hope to share in the next few minutes is to give you a very key case study related to Hezbollah in Latin America and how illicit finance happened. I'm going to switch to English as the panel is speaking in English. Regardless, I still wanted to do my introduction in Spanish. What I'm going to do is give a case study. Two phenomenons that were essentially thought of probably a little more than a decade ago as very separate phenomenons have been converging over time. I'm talking specifically about the phenomenon of international terrorism and the phenomenon of transnational organized crime. Over the years, many analysts suggested that these were very different activities and there is essence that, as famously, one writer said, they had different motivations. Criminals, obviously, are motivated by profits and terrorists are motivated by political causes. Now, that is true for the most part. However, there are connections and increasingly a convergence of the two phenomenons, particularly within the illicit finance domain. I'm going to talk to you a little bit about a case study, both historic and actual, in terms of Hezbollah's presence in the region. So, Latin America is no stranger to the presence and activities of Hezbollah in Latin America. In fact, in the early 1990s, it was a victim to the largest Islamist terrorist attack in the Western Hemisphere prior to September 11th in the United States. I'm referring to the two bombings, first in Buenos Aires, both in Buenos Aires, Argentina. The first happening against the Israeli embassy in 1992 and the second happening, an attack on the Jewish cultural center called the AMIA in the same city in July of 1994. Together, there are more than 114 casualties and many more injured. The important thing to recognize here is there were Latin Americans that died. There were Argentinians that died in these attacks. These attacks weren't necessarily just against other nations outside of the region, but specifically on Latin Americans. In these attacks, there's an interesting aspect of it when it comes to the financing of the attack. One of the individuals, these are the individuals that are being accused by the Argentine government for being involved in the attack. Former and some current active government officials of Iran and then one now deceased high-ranking member of Hezbollah. But this individual right here, Mohsen Ravani, was interesting in the sense that he was the masterminder, according to Argentine prosecutors, the mastermind of the attack because he prepared the logistics for that attack. There was also a bombing the day after the AMIA attacked. So the AMIA attack happened on July 18th, 1994. On July 19th, the day after, there was an attack on Alashirikana's flight 0091. That was a flight flying from Cologne, Panama, to Panama City that crashed, killing all 25 passengers on board. And in that attack, much like the AMIA attack, there has not been yet perpetrators that have been indicted and convicted of those attacks, but it was also suspected to be at the hands of Hezbollah. More recently, there has been information that some of the financiers of that attack reside in Venezuela. So give me a quick anecdote of the financing aspect of the AMIA attack, because this has been very not well known. So the attack essentially took about 10 years to create the capabilities for Hezbollah to carry out such a high-level terrorist attack. We have to remember that more than 25 years ago, it was very poorly understood that Hezbollah could actually have a capability to carry out an attack far away from its home base in Lebanon. It was actually probably considered impossible that they would be able to do such a feat. But nonetheless, the preparations for this attack took about 10 years in the making, when the first Iranian operatives arrived at their embassy in Buenos Aires. So from the period of 1983 to 1993, the embassy of Iran in Buenos Aires grew exponentially from approximately 13 diplomatic representation inside the country to more than 63 officials by 1983, the year before the bombing. The majority of those officials were cultural attaches. And what those cultural attaches represented was the only legitimate commercial link that Iran and Argentina had was in the business of the beef trade. At the time, Argentina was one of the top five exporters of beef to Iran, which was very normal because Argentina was one of the top exporters of beef around the world. The Argentine beef is very high quality. But instead of enjoying that commercial relationship as most countries would do with bilateral trade, Iran took advantage of that relationship and used it as a cover platform to insert its intelligence operatives and others. So many people arrived from Iran with the title of cultural attache and were accepted and accredited by the Argentine foreign ministry to grow their embassy to the size of having 63 diplomats in the country in 1983 because they were using the pretext of the halal certification process. Because Iran is an Islamic country, any import of beef into the country has to be certified by the religious and cultural standards. Argentina did not understand any of that. It's very foreign to their cultural and religious practice, but they also didn't want to interfere, meaning that it's a religious cultural issue. Well, that gave the pretext for Iran to abuse that trade relationship and to grow an intelligence presence that essentially helped finance the terrorist attack under the guise of cultural exchange. There are elements of this case that are still to this day not known, but are well-documented by the prosecutors of the AMIA case, including its connections in Peru. Two weeks before the bombing, an Iranian businessman arrived in Buenos Aires, Argentina, and expedited a business visa from Argentina to Peru and traveled to Puno, I'm sorry, traveled to Piura, Peru along the northern border with Ecuador and returned to Buenos Aires on July 17th, 1994. If you look at the, remember the dates that we showed on the previous slide? That's the day before the bombing. Because the connections that come through specific zones that are mostly free trade zones in Latin America has become to connect a network that was used to initiate the attack in Buenos Aires, but used to grow a network that's now present in just about every country in Latin America. So this is a quick case study of what is a concept that Selena knows very well because at her institution, the National Defense University, and specifically at the William J. Perry Center, has done a lot of academic work on, which is the concept of convergence. So what is convergence? So as I was mentioning in my opening that for a long time, this idea that criminals and terrorists will work together was considered a transactional relationship, meaning that they may be cooperating on small operations from time to time because of necessity, but there isn't a strategic link between the two. Well, that was mostly correct, except for the fact that there is a prominent connection among their logistics. That doesn't mean that terrorists are abandoning their political cause and just turning to drug profits or other criminal profits, or vice versa, the criminals are now taking up the cause of these terrorist organizations, but in the logistical domain, and I'm talking specifically within the illicit finance domain, there have been multiple connections that drive this convergence to be able to occupy illicit economies throughout the world. This is a study by the Combating Terrorism Center at West Point from 2014, a report called Risky Business, where they did a empirical study of 2,700 known criminals and terrorists in a registered database. And when they did the network analysis of this study, they found that 97%, 97% of known criminals and terrorists that were indicted on one or the other charge had logistical connections, meaning they were either financiers, fixers, or facilitators of terrorist groups as well as criminal organizations, mostly drug trafficking. If you look at the purple dots, those purple dots are mostly drug individuals or entities in this study. The red dots are the terrorist entities or individuals. The green dots are what they call in the study suspected individuals. Those are the convergence points. Those are the logistical. To put it very simply, if you're an accountant for the Sinaloa cartel and Hezbollah then comes to Mexico, you're a good candidate to be an accountant for Hezbollah as well. And so these convergence points are what's essentially dominating and connecting what once was very separate phenomenons. And if you heard me yesterday, you know that there's certain spaces in certain countries where this convergence is now getting facilitated by state institutions. You heard the presentation from yesterday for those that heard it about how Venezuela has become essentially a global hub for the convergence of these two phenomenons. But if you look at its overlapping circles, you have the organized crime element and you have the terrorist element and you have the facilitators, fixers, and financiers being the glue between the two. But you add a third circle, which is the regime itself. And this is in select countries. It's not, thankfully not too many countries around the world but there are some that are providing state institutions to support these activities. In the case of Venezuela, the immigration services have documented thousands of known criminals and suspected terrorists to be able to provide them cover identities to be able to facilitate their movements all around the world. Last year, I wrote a report for the Atlantic Council that's available publicly on their website called the Maduro-Hezbollah Nexus where I document the specific fixers, financiers, and facilitators that are the convergence points of Hezbollah with the Maduro regime. You might have heard in many statements, both political and press statements, about Hezbollah's presence in Venezuela but there's very few documentation or reports that substantially argue or provide more clarity on that point. So the purpose of this report was to do such that. And there's two takeaways really from the report. These are two diagrams from the report. The first takeaway is if you look at the presence, it's the little map on the right, on the left-hand side I guess for you guys. If you look at the presence, essentially they are mostly located along the Caribbean coast of Venezuela because they're tied to import-export businesses. Middlemen essentially for Hezbollah and the Maduro regime that use the import-export industry of Venezuela to be able to use it as a cover for action and money laundering for drug trafficking, terror finance, and other activities. The second point is that most of these individuals are working to co-opt the Lebanese community. Now let me be very specific on this point. The Lebanese community in Latin America is a very good community that's been very active in business, in community development, in tourism, and has been a healthy aspect of the economies of many countries, not prominently Brazil, Paraguay here in Panama, and Venezuela in Colombia. But just like the Lebanese people in Lebanon, they are victims of terrorist organizations such as Hezbollah that look to co-opt those communities and steer them towards the illicit actors. In the case of Venezuela, being that Venezuela is a country with a lot of illicit activity, that presence is more profound. So this report's available to the public where I go into a little more detail about who these individuals are and how it connects from high-ranking officials in the Maduro regime to high-ranking officials from Hezbollah and to Iran. And I'll be very quick because I know I'm running out of time, but essentially you might have heard about recently a potential of Iranian warships en route to Venezuela. It looks like thankfully they changed course and I think they're moving to the Mediterranean. But nonetheless, the logistical apparatus that was required to be able to potentially do that if it does ever happen in the future requires on networks that are built in third-party countries. In the case of these, these are the oil tankers that were moving from Venezuela to Iran in 2020, where you would see Algeria, Serbia, and Turkey used as third-party countries to facilitate that movement. You can add Mauritania to that list. You can add, I'm forgetting another country to that list, but they're building these third-party country networks to be able to facilitate movement that didn't exist in the past. But this is the crux of the message I would like to leave with you with today, especially for the parliamentarians that are in attendance. One of the very practical results of this specific forum, the Parliamentary Intelligence Security Forum, which goes back to 2016, at least for me, when I first participated with Congressman Pittenger, is that this has been the leading forum to advocate for the designation of Hezbollah as a terrorist organization in Latin America to be able to empower the financial intelligence units to have the ability to prevent potential terrorist actions. We have to always keep in mind that the difference between anti-terrorism and combating transnational organized crime is that in anti-terrorism, you have to prevent the action. You cannot wait till the bomb goes off because then it's too late. And these three countries, beginning with Argentina in July of 2019, became the first country in the history of Latin America to designate Hezbollah as a terrorist organization that's provided them with more capabilities to their financial intelligence units and provided more connectivity to the international community that's growingly concerned on these. Paraguay followed, Colombia, Guatemala, and Honduras are the five countries. I highly endorse and recommend that Panama joins this growing list of community countries throughout the world. We have now more than 63 countries worldwide that have recognized Hezbollah as a terrorist organization that provides more than just the same language, but also provides the ability to have practical cooperation at a level that becomes much more clear than to clear up any confusion as to the definition of what Hezbollah could be. Hezbollah is a multidimensional organization. They have political party representation in Lebanon. They do social projects in the southern part of the country, but they're also a major terrorist organization. They're also a transnational criminal organization. And so in that sense, we have to clear up that confusion by providing legal definitions that allow the international community to combat that convergence. And with that, I end, and I'll pass the podium to my colleague, Selena. Thank you once again.