The U.S. Department of the Treasury, through its Office of Foreign Assets Control (OFAC), has taken decisive action against a complex network of individuals, companies, and vessels involved in smuggling oil and liquified petroleum gas (LPG) to generate revenue for Hizballah [Hizballah “Party of God,” also spelled Hezbollah] The newly imposed sanctions target three individuals, five companies, and two vessels, all of which are central to a smuggling operation that channels profits directly to Hizballah, a designated terrorist organization. The Treasury Department’s efforts are part of a broader strategy to disrupt financial networks that fund terrorism.
The network targeted by these sanctions is primarily composed of Lebanese businessmen and companies overseen by a senior leader of Hizballah’s finance team. This network has been responsible for dozens of LPG shipments to the Syrian government, with the profits fueling Hizballah’s terrorist activities. According to the U.S. Treasury, Hizballah’s illicit oil and LPG smuggling operations generate hundreds of millions of dollars, which directly support the group’s actions, including violence and regional destabilization.
Focus on Hizballah’s Financial Operations
Bradley T. Smith, Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence, emphasized the group’s damaging activities in a recent statement. “Hizballah continues to launch rockets into Israel and fuel regional instability, choosing to prioritize funding violence over taking care of the people it claims to care about, including the tens of thousands displaced in southern Lebanon,” Smith said. “Treasury will continue to disrupt the oil smuggling and other financing networks that support Hizballah’s war machine.”
This latest action is carried out under the authority of Executive Order (E.O.) 13224, which targets those engaged in terrorism or providing support to terrorist organizations. Hizballah was designated as a Specially Designated Global Terrorist (SDGT) group by the U.S. Department of State in 2001 under E.O. 13224.
Key Figures and Entities Involved
The Treasury Department has consistently targeted individuals and entities involved in Hizballah’s financial operations. Among the key figures targeted in this round of sanctions are Muhammad Ibrahim Habib al-Sayyid and Lebanese businessmen Ali Nayef Zgheib and Boutros Georges Obeid. Al-Sayyid, a senior Hizballah official, has been responsible for overseeing the group’s commercial businesses and facilitating oil deals in Southeast Asia. Zgheib, a petroleum chemistry expert, has played a key role in advising Hizballah’s finance team and managing oil smuggling activities. Obeid, meanwhile, jointly owns several companies with Zgheib that have been central to Hizballah’s energy deals.
The sanctions also extend to several businesses owned or managed by these individuals, including Heavy Oil Distribution Company S.A.L. (HODICO) and its subsidiaries. These companies, along with LPG shipment vessels, have been key components of the smuggling network that provides significant financial resources to Hizballah. Two vessels—ALPHA GAS and MARINA—were also identified as part of this network, having been used to transport LPG to Syria.
Impact of Sanctions
As a result of these sanctions, all property and interests in property of the designated individuals and entities that are located in the U.S. or in the possession of U.S. persons are blocked. Additionally, U.S. persons are generally prohibited from engaging in transactions involving the assets of the sanctioned entities or individuals. Non-U.S. persons or entities that engage in activities with these sanctioned individuals or companies also face potential sanctions risks.
The Treasury Department has emphasized that these sanctions are part of a broader effort to not only penalize individuals and entities supporting terrorism but to encourage behavioral change. OFAC maintains a mechanism for individuals or entities to petition for removal from the Specially Designated Nationals and Blocked Persons (SDN) List, provided they can demonstrate a shift in conduct.
Global Implications
The latest actions by OFAC highlight the growing complexity of Hizballah’s financial networks and their reliance on international business operations to fund their activities. As European banks and businesses increasingly withdraw from involvement with entities linked to Hizballah and other terrorist groups, U.S. sanctions continue to play a critical role in disrupting these operations.
The Treasury Department remains committed to dismantling Hizballah’s financial infrastructure, targeting not only those directly involved in the smuggling of oil and LPG but also the broader network of businesses and individuals that enable these activities. Through continued monitoring and enforcement, the U.S. aims to limit the resources available to terrorist organizations like Hizballah, undermining their ability to carry out destabilizing activities across the Middle East.
