Argentina takes action to freeze Hezbollah assets

The group is accused of raising millions a year through illegal South American operations

People hold images of the victims of the 1994 bombing attack on the Argentine Israeli Mutual Association (AMIA) community centre, marking the 25th anniversary of the attack, in Buenos Aires, Argentina, July 18, 2019. REUTERS/Agustin Marcarian
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Authorities in Argentina have frozen Hezbollah assets and effectively designated the Iran-backed group a terrorist organisation on the 25th anniversary of a deadly bombing in the country.

The South American nation accuses the Lebanese group over the 1994 bombing of a Jewish community centre in Buenos Aires, which killed 85 people. The group and its backers in Tehran deny the claims.

The US Secretary of State, Mike Pompeo, has visited Argentina to attend commemorations to mark the attack.

Argentina also blames Hezbollah for an attack on the Israeli embassy in Buenos Aires in 1992, which killed 29 people.

The country's financial information unit ordered assets belonging to Hezbollah and its members to be frozen, the day after Argentina created a list for people and entities linked to terrorism.

"At present, Hezbollah continues to represent a current threat to security and the integrity of the economic and financial order of the Argentine Republic," the unit said.

The freezing of assets automatically puts Hezbollah on Argentina's list of terrorist organisations, a government source told Reuters.

FILE - In this July 18, 1994 file photo, firefighters and rescue workers search through the rubble of the Buenos Aires Jewish Community center after a car bomb destroyed the building, killing 85 people. Argentina announced on Wednesday, July 17, 2019, that it is creating an anti-terrorism database ahead of the 25th anniversary of its worst terror attack. (AP Photo/Alejandro Pagni, File)

US and Argentinian officials say Hezbollah operates in the tri-border area of Argentina, Brazil and Paraguay, where an illicit economy funds its operations elsewhere.

"It's been clear for so many years that this [attack on Argentinian Jewish community] was executed by Hezbollah and backed by Iran," said Toby Dershowitz, a senior vice president at the Foundation for Defence of Democracies.

"My hope is that will really inspire other countries in the region to follow suit, because they too have suffered from Hezbollah’s malign activities and those include narco-terrorism and trafficking. It is what Hezbollah is known for."

It is not yet clear whether Argentina's new designation will lead to other action against Hezbollah in the area.

But some kind of US security support, including increased sharing of intelligence, could be a part, said Benjamin Gedan, director of the Wilson Centre’s Argentina Project in Washington.

Argentina's decision to join the US in designating Hezbollah a terrorist group is a significant win for President Donald Trump's administration, and could put pressure on Brazil and Paraguay to follow suit, Mr Gedan said.

The US is looking to revive a security relationship a souring in diplomatic ties during the previous administration of president Cristina Fernandez.

Argentina’s new President, Mauricio Macri, is regarded by Washington as a partner, particularly as traditional European allies have been slower to offer support amid US tension with Iran.

"Clearly they are not a good replacement for European allies, because they don't engage Iran significantly, so they cannot put on the same commercial and economic pressure as the Europeans," Mr Gedan said of Latin America.

"But at least it gives the impression that the Trump administration is not standing alone."

He said the US put significant pressure on Argentina to prepare the announcement in time for Mr Pompeo's visit.

Argentina's investigation into the 1994 lorry bomb attack on the Argentine Israeli Mutual Association, meanwhile, has made little progress. No one has been brought to trial in that case or the Israeli embassy bombing.

Over the years, reports have indicated that the Lebanese group operates significant operations across Africa, Latin and South America, which raise  funds for the group.

Accused Hezbollah financier Nader Farhat was arrested in Paraguay and extradited to Miami this year.

Mr Farhat is accused of moving millions of dollars around the world on behalf of drug traffickers and channelling funds to Hezbollah through one of the biggest currency exchange businesses in the tri-border area.

In recent years, US authorities have turned to money-laundering legislation to try to disrupt Hezbollah operations in the area because it is difficult to prove they are directly funding the terror group.

Last year, US officials said that sanctions placed on Iran had cut into the estimated $700 million it paid to the group each year.

As such, the officials warned, the group was likely to increase its illegal overseas businesses to make up the shortfall.

The group’s secretary general, Hassan Nasrallah, has said in recent speeches that the group is being financially squeezed, calling it economic warfare by the US.

But officials say they believe Hezbollah raises a third of its revenue from South American operations, representing millions of dollars a year.

The US has imposed dozens of new sanctions on Hezbollah members, including Mr Nasrallah and his family, over the past two years.

In July 2017, Argentina’s Financial Intelligence Unit asked the government to freeze the assets of 14 Lebanese nationals in the tri-border area, accusing them of using casinos to launder cash and send money to Hezbollah.

In September 2018 Brazilian authorities arrested Assad Barakat, who they accused of financing Hezbollah through casinos in Argentina.