ACIS IP 97

For six years, Hezbollah has played a central role in expanding Iranian regional power through recruiting, training, and coordinating the battlefield activities of Shiʻi militias in Syria. These Syrian, Iraqi, Pakistani, and Afghani militias serve Iran's Islamic Revolutionary Guards Corps (IRGC) and Iran's Supreme Leader Ayatollah Ali Khamenei. Hezbollah also has been working to enhance the battlefield capabilities of the Iranian-backed Houthi forces in Yemen.  At the same time, Hezbollah itself fielded considerable number of its own fighters in Syria that enabled the Iranian-backed army of Syrian President Bashar al-Assad to recapture territory from anti-regime rebels.  Thus, after six years of on-going offensive combat operations, Hezbollah has emerged as the most lethal and effective fighting force in the Arab world.

 Yet during July 2019, Hezbollah's battle-hardened brigades have been withdrawing from their positions in Syria. Some of them are redeploying to positions in southwestern Syria and southern Lebanon opposite the borders with Israel. At the same time, Hezbollah is now under severe financial pressure from U.S. sanctions, both against the militant organization directly and against its main financial backer – Iran.  At the height of its power but facing the imminent prospect of that power being eroded through a large reduction in its financial resources, Hezbollah has incentive to attack Israel sooner rather than later.  Iran, whose economy has been severely compromised by the international compliance with crippling U.S. economic sanctions, is now confronting European naval forces in the Persian Gulf in addition to the United States Navy. Tehran would likewise benefit from an open war with Israel to change the terms of its current crisis. Thus, when Hezbollah's Secretary-General Hassan Nasrallah recently promised in a television interview that Israel would be attacked in the case of any war with Iran, the world was put on notice that the Hezbollah card has been put on the table.

During a wide-ranging, three-hour interview on Hezbollah's al-Manar television channel on July 12, 2019, Nasrallah showed a map of Israel and marked sites of main population centers that Hezbollah has targeted for a future war. Nasrallah then promised to send Israel "back into the stone age," in defense of Iran.  While the interview was held ostensibly to mark the occasion of Hezbollah's 2006 war with Israel, Nasrallah's remarks highlighted Hezbollah's central role in Iran's push for regional hegemony. Hezbollah's Secretary-General explicitly warned that any war with Iran would involve attacks on Israel by both Iran and Hezbollah, even if Israel was not an active participant in that war. 

Nasrallah's underscoring the threat of massive attacks from Hezbollah's formidable missile arsenal, perhaps meant to obscure the threat from conventional forces that have been recently redeploying to Israel's border. In the same July 12 interview, Nasrallah acknowledged Hezbollah's withdrawal from the battle zones in Syria.  However, Hezbollah's secretary-general attributed the reduction of forces in several operational theaters to the re-establishment of the Syrian army control of those areas.  Declaring "the Syrian army has greatly recovered," Nasrallah asserted: al-Assad's military "has found that today it does not need us." The Hezbollah chief also adamantly denied that the group’s draw-down of forces  was due to the financial pressure it is experiencing from U.S. sanctions, stating, "All dealings with the Syria file have nothing to do with the sanctions or the financial austerity."

Hezbollah has implemented an austerity program whose cost-cutting measures affect all sectors of organization's activities. Employees have experienced across-the-board pay cuts in Hezbollah's education, media, medical, and military sectors, with some cuts reaching as high as 40 percent.  Married fighters are reportedly receiving only half their salaries and single fighters even less.  Additionally, Hezbollah has closed approximately one thousand offices and apartments in Lebanon as well as reducing its social services budget.  These reductions weaken Hezbollah's political power within Lebanon as its political wing is less able to dole out benefits to its various constituencies.

According to the U.S. State Department's Assistant Secretary for Diplomatic Security, Hezbollah generated about $1 billion in annual revenues prior to the re-imposition of U.S. sanctions on Iran and the recent spate of U.S. sanctions on key figures in Hezbollah's financial apparatus.  These revenues were derived from the direct infusion of funds from Iran as well as revenue generated from Hezbollah’s international business enterprises and investments, its international donor networks, and its extensive money-laundering activities.  As an officially designated terrorist organization, Hezbollah's money-making activities are in the cross-hairs of the U.S. Treasury Department, which has adopted a series of measures aimed at closing them down.

In April 2019, the U.S. began offering a $10 million reward for information on three key figures in Hezbollah's financial network: Adham Tabaja, Ali Charara, and Mohammad Bazzi. Tabaja, whose businesses in Lebanon, Iraq, Ghana, and Sierra Leone have been targeted by the U.S. Treasury Department, enjoys direct ties to Hezbollah's senior leadership.  Charara, whose Spectrum Investment Group Holdings SAL has likewise been targeted by the U.S. Treasury, is considered Hezbollah's wealth manager.  Bazzi, who was placed on the U.S. Treasury's Specially Designated Global Terrorist list in May 2018 for funding Hezbollah from his multi-continental business holdings, works closely with the Central Bank of Iran.

On July 9, 2019, the U.S. Treasury Department targeted key members of Hezbollah's political establishment, Hezbollah Members of Parliament Amin Sherri and Muhammad Hasan Ra’d, as well as Wafiq Safa, the head of Hezbollah’s liaison and coordination unit.  These figures manipulate the Lebanese state's political and financial institutions to support Hezbollah, compromising Lebanon's banking system, in particular.

Among Hezbollah's various revenue streams, Iranian funding constitutes the lion's share.  Iran supplies Hezbollah funds in cash as well as through Iranian charities, in addition to delivering material items such as sophisticated weaponry and small arms.  Prior to the re-imposition of U.S. sanctions, Iran's annual cash transfers to Hezbollah stood at $700 million, according to the U.S. Treasury Under-Secretary for Terrorism and Financial Intelligence –accounting for more than two-thirds Hezbollah's total known revenue sources.

 The almost three-quarters of a billion dollars from Tehran represents more than a three-fold jump in Iranian direct funding prior to outbreak of the Syrian civil war.  The financing enabled a parallel three-fold increase in the number of Hezbollah fighters, who presently number approximately 25,000 active-duty combatants and a similar number of reservists.  The funds are transferred to Hezbollah through the close cooperation of the Central Bank of Iran and the IRGC's Qods Force.  With Hezbollah at loss to continue to fund its expanded forces, the world recently witnessed the odd spectacle of Hezbollah's supposedly impoverished Houthi allies in Yemen conducting a multi-million dollar 'fund-raiser' for the organization.

Since early July, cash-starved Hezbollah has been redeploying its forces to the mountainous region near the Syria-Lebanon border, according to the Syrian Observatory for Human Rights.  More recently reports have emerged of Hezbollah positioning forces on the Israeli border in Lebanon and, more significantly, in southwestern Syria, where Israeli defences against an invasion are less developed.

On July 22, 2019, a Hezbollah operative Mashour Zidan was assassinated in the Syrian Golan. Although there are conflicting reports about whether Zidan was killed in his car by an IED or rocket launched from an aerial drone, it has been presumed that he was the target of an Israeli operation.  Zidan was a central figure in Hezbollah's clandestine "Golan File," who reportedly oversaw the development of secret caches of explosive devices, light weapons, machine guns and anti-tank missiles in villages near the Israeli border. Following the Syrian army's resumption of control of the Syria's strip of territory along eastern edge of the Golan Heights, Hezbollah's Golan File has been working to create clandestine forces there along the current Syria-Israel border that are prepared to attack Israel on command.

For Israel, this represents a new and troubling threat.  While Hezbollah already possesses formidable defensive capabilities in southern Lebanon, the new offensive capabilities Hezbollah gained through its combat experience in Syria now makes the group capable of launching sophisticated ground operations into Israeli territory from Syria's Quneitra and Deraa governates.

Presently, Hezbollah is unable to pay the salaries of its approximately 50,000 active-duty combatants and reservists. Hezbollah cannot allow fighters with Syrian combat experience to simply remain idle within Lebanon without employment or financial support. A build-up of forces in southwestern Syria would serve both Hezbollah's internal needs and strategic interests.  Hezbollah's military build-up also creates a foothold for the IRGC Qods Force in this sensitive area. 

If Hezbollah and the IRGC attempt a rapid build-up of forces, Israel would be compelled to undertake a large-scale, pre-emptive operation.  Such action could then provide Hezbollah and Iran the pretext to attack Israel. 

Consistent limited actions by the Israeli Defence Forces to prevent a rapid force build-up by Hezbollah seems to be Israel's best course of action.  However, calibrating such actions so they remain below the threshold of a provocative retaliation by Hezbollah is complicated by the fact that the south-western Syrian theatre, in contrast to southern Lebanon, lacks the tacitly acknowledged norms between Hezbollah and Israel that create mechanisms for defusing tensions. 

Now that Hezbollah has put southwestern Syria into play, it may become difficult take Iran's Hezbollah card off the table.

 *Dr. Micha’el Tanchum is a senior fellow at the Austrian Institute for European and Security Studies (AIES), a fellow at the Truman Research Institute for the Advancement of Peace, the Hebrew University, Israel, and non-resident fellow at the Centre for Strategic Studies at Başkent University in Ankara, Turkey (Başkent-SAM).  @michaeltanchum 

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