June 1, 2022No Comments

ITSS Verona 2021/22 Webinar Series: “The View From Africa”, with Ilas Touazi and Michele Tallarini

For its third event of "The View from" Series, Ilas Touazi from University of Sétif 2 and Michele Tallarini, ITSS Verona, Africa Team, discuss US-China competition in Africa, touching upon regional dynamics, trade, BRI, questions of debt, and Chinese military presence in the continent.

June 1, 2022No Comments

Ashik Bonofer on the Economic Crisis in Sri Lanka

Dr Ashik Bonofer talks about the ongoing economic crisis in Sri Lanka,  those responsible, and what the situation in Sri Lanka means for the future of stability in the region. Dr Bonofer is an Assistant Professor at Madras Christian College in Chennai, India. Dr Bonofer specializes in International Relations, Foreign Policy, South Asia, Asia- Pacific, Human Rights, Refugees and Mixed Migration.

In this session, Dr Bonofer discusses the economic crisis in Sri Lanka, the multiple actors in the crisis, the resulting conflict and the necessary reforms that the Sri Lankan government will have to roll out in response to this conflict.

InterviewersJoseph Moses and Alberto Trame.

May 31, 2022No Comments

Lisa Gaufman on Russia’s Information Warfare in Ukraine

Dr. Lisa Gaufman received her PhD from the University of Tübingen, Germany, in 2016. She then joined the Institute for Intercultural and International Studies at the University of Bremen as a postdoctoral research fellow. She is the author of "Security Threats and Public Perception: Digital Russia and the Ukraine Crisis" (Palgrave, 2017). Her research interests centre around the intersection of political theory, international relations, media and cultural studies.

In this podcast interview, Dr. Lisa Gaufman explores in-depth the development of Russian strategy of information warfare in Ukraine.

Interviewing Team: Fabrizio Napoli and Davide Gobbicchi.

May 30, 2022No Comments

The Geopolitics of the Energy Transition’s Momentum

Authors: Riccardo Bosticco and Michele Mignogna.

Introduction

The main result that Putin has achieved until now with the aggression of Ukraine is a solid stance from the European Member States to halt gas imports from Russia. This and other green commitments have pushed the EU and the whole world to give renewed impetus to renewable energy. Moreover, the relation between climate and industry policies is increasingly evident. In a broader context of power competition trade, investment policies in the energy and climate sectors play an ambivalent role: energy dependencies have been conceptualized as mutually benefitting; yet, the current war unveils their risky nature. After a brief description of the renewables’ geopolitical dimensions, this article outlines what is at stake for the EU’s primary areas of energy cooperation. 

The Impact of Renewable Energy on Geopolitics

Renewable energies have the potential to transform interstate energy relations. Renewables have fundamentally distinct geographic and technological properties than coal, oil, and natural gas. Sources are plentiful but intermittent; their production is increasingly decentralized and utilizes rare earth resources in clean tech equipment and, lastly, their distribution is predominantly electric and entails tight management standards and long-distance losses. This contrasts sharply with fossil fuel resources’ geographically fixed and finite character, their reliance on massive centralized production and processing facilities, and their ease of storage and transit as solids, liquids, or gases worldwide.

The energy transition provides a chance to rethink and revise long-standing trading relationships. It also allows countries to engage in previously closed energy value chains. Significantly, the future of the energy world will likely redefine the concept of energy security. However, in this society, the impulse to produce things domestically will collide with the logic of size and global supply networks. The energy transition will rewire the planet, but how much of it will transcend international borders is still unclear. A crucial element will be the commerce of minerals, distinct from that of oil, gas, and coal in terms of location. Nonetheless, such business will follow a familiar pattern: resources will be harvested in one region of the world, transported to refineries and processing centers, and then transformed into final goods. Diversification, bottlenecks, extraction disputes, and rent-seeking dynamics will all be present, although with different details.

Such developments will require a significant shift in energy strategies, indicating that areas pursuing industrial policies rather than decarbonization may reap climatic advantages. The previous energy map established a link between natural resources and markets. Yet, the new energy map will be much more complex.

The Geopolitics of the Energy Transition and the EU

Bringing together the words ’geopolitics’ and ‘renewables’ leads to the study of renewables and related security risks, the effects of the energy transition on traditional energy relations, possibilities of mutually beneficial ties, and windows of opportunity for countries to move up in the global power hierarchy. The energy transition is indeed a process where the industrial advantage is likely to bring with itself political benefits and leadership status. In the context of the current war in Ukraine, this is becoming clearer every day. Yet, the energy transition is expected to become part of power competition as the most impellent challenge – posed by the war as well as climate change and the security risks with it – of our times and will likely create amities and enmities.

Take the example of Russia. In the past decade, Russia has perceived the EU’s energy transition problematically. The EU-Russia energy relationship was primarily based on gas, oil, and coal. Nonetheless, the association is characterized by different conceptions of energy and energy security, although both actors recognize the potential of energy interdependence. While the EU and European countries are more enthusiastic concerning the transition, Russia’s discourses are more conservative yet try to defend the role of natural gas in the energy transition.

While it is difficult to predict an essential role played by Russia nowadays, given the progressive isolation it is forced to, the energy wire will see China having high stakes in renewable developments and geopolitics. Concerning relations with the EU, some have argued that the energy transition is likely to be the determinant of the future of EU-China relations. Energy in EU-China relations does not play the same role as relations with Russia. While the renewable sector has encouraged interdependence between the two powers in the past, more recently, nationally oriented policies have hindered the precedent path.

Still, the energy transition will significantly shape relations between the EU and the Arab states. While Bahrain, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates are challenged by balancing relating with the US and China, managing regional crises, the pandemic, and containing Iran as the primary regional rival, the last point precisely is preventing some of the Arab states in the Gulf region to act assertively against Russia. Nonetheless, looking ahead to the 2020s, how those countries manage the energy transition will have consequences on internal and external political and economic environments. Especially Gulf countries envision a sustainable future, thus setting the stage for redrawing energy investments. In this context, the EU will play a crucial role, opening to the Gulf’s market interests and advancing regional security interests.

Conclusion

Overall, the current war is not only highlighting the strategic value of energy resources and energy ties but also how the transition to new energy systems is likely to rewire the world. In a context where the main political divide on the global stage is between liberal and illiberal forces and strong energy dependences revealed security threats, future systems of alliances will have to account for this. For the EU, the energy transition will have to deal with Russia, act as cohesively as possible, and strengthen its strategic thinking concerning big partners such as China and the Gulf States. The transitions’ stakes entail a strategic opportunity to avoid past errors.

May 26, 2022No Comments

Will the new Transatlantic Data Framework withstand a ‘Schrems III’ in European Courts?

Authors: Beatrice Gori, Giovanni Tricco and Giorgia Zaghi.

On March 25, amid a week of summits in Brussels overshadowed by the Ukrainian war, Joe Biden and Ursula Von Der Leyen in a joint meeting unexpectedly announced a new transatlantic data privacy agreement in principle, clearly showing  the political status nearby the issue. Since the fall of the previous privacy shield in 2020 the data flows between the two transatlantic actors have been surrounded by uncertainty, making it difficult for companies, particularly SMEs, to conduct business. Transatlantic data and information flows between the United States and the European Union are estimated to be valued at over $7.1 trillion dollars with over 5300 companies participating, including technology behemoths such as Google, Meta and Microsoft. Therefore, a new agreement is well expected by both sides of the Atlantic since the Court of Justice of the European Union (CJEU) decision in Schrems II which called for the unproportionate capability of US surveillance capabilities and the lack of an effective redress body for European data owners.

The new Transatlantic data pact is expected to heal such gridlocks and foster the data economy in the near future. However, a text has not been published, raising serious doubts among privacy experts. Max Schrems, the Austrian privacy activist who has torn down the two previous agreements, welcomed the new pact as “a lipstick on a pig” calling for future challenges in front of the European judicial system. The line between whether such a new agreement will fulfill the CJEU criteria or pave the way for a Schrems III is exceedingly thin. Nonetheless, the question is surrounded by different controversies, indeed The CJEU highly criticized US practices without taking into account the national capabilities of its Member States. Several reports, including one from theEuropean Fundamental Right Agency (FRA) and from the United Nations High Commissioner for Human Rights, outlined how surveillance programs conducted by European intelligence services allegedly vary from collecting traffic metadata from diverse sources to monitoring web forums and intercepting cable-bound transmissions.

Indeed, in Europe surveillance activities fall under the scope of national security, which is a matter of national competence according to the Treaty of the European union (TEU), therefore European courts cannot legislate or address changes to its Member States. The EU courts’ approach has provoked anger and disbelief among US national security experts: “mix of judicial imperialism and Eurocentric hypocrisy”, as pointed out by Steven Baker a partner in the law firm Steptoe & Johnson LLP and former general counsel of the National Security Agency (NSA). Therefore, while the CJEU’s Schrems II decision emphasized how the current laws inadequately protect the right of non-nationals to judicial redress in the United States, additional surveillance and intelligence reform should be addressed even in the EU to create a political momentum for legislative intervention in the American congress. Until that moment as underlined by Peter Swire it is “unrealistic for the EU to demand changes to U.S. national security legislation when European countries themselves are not averse to similar practices.”

Image Source: https://www.bbc.com/news/world-europe-57489588

Swire's forecast appears to have come true, in the fact sheet released by the US government no legislative amendments are mentioned; instead, it calls for the establishment of a new redress mechanism and other safeguards to satisfy the CJEU’s request via a Presidential Executive Order (EO). Such a process would raise doubts regarding the capacity of the new mechanism to be independent and able to investigate wrongdoings by the American Intelligence Communities (IC). Theoretically, this would represent the same issues of the Ombudsman of the old-fashioned Privacy Shield. However, an intriguing solution t has been envisaged by experts. They call for the creation of an independent redress authority via a regulation of the Department of Justice (DOJ) which will be independent by the executive, in conjunction with EOs from the President that would confer to the newly redress authority concrete capability to effectively investigating redress requests and for issuing decisions that are binding on the entire American IC. A non-statutory solution according to them that would – theoretically – satisfy the request of the European courts in Schrems II.

The European Data Protection Board (EDPB) made the point clear in its statement saying that it will direct “special attention to how this political agreement is translated into concrete legal proposals.” Therefore, until a text is missing just speculation can be made. Indeed, at the moment the political agreement made on 25 March 2022 is just the latest step on the ‘intense negotiations’ on a Privacy Shield replacement, as stated by the European Commissioner of Justice Didier Reynders, who announced that the works for a final text is undergoing in order to have the final agreement for late 2022. He pointed out that: "It is difficult to give a precise timeline at this stage, but we expect that this process could be finalized by the end of this year. On the European side there is trust in the work and commitment of American officials. Indeed, the U.S. Department of Commerce Deputy Assistant Secretary for Services Christopher Hoff said to IAPP that the United States made unparalleled commitments to significantly increase privacy and civil liberties safeguards through the establishment of the new multi-layered redress mechanism, assuring that it will be independent and binding in its safeguards on how the court is set up, as well as the protections for the judges' selection and removal. In addition, he pointed out that he strongly believes that the agreement will be durable and that all the features surrounding the new agreement will be much clearer at the appropriate time.

The stakes are high, indeed, in case the agreement will not survive the scrutiny of the CJEU legal uncertainty will persist and future economic losses for the digital economy of the EU and the US will increase. Accordingly, to forecasts of DIGITALEUROPE by 2030 if a stable agreement that enables lawful and consistent data transfer is not assured the European Union economy could lose €1.3 trillion in cumulative economic growth by 2030, €116 billion in annual exports and 1.3 million job losses, primarily high-skilled professions. On the other hand, if a stable mechanism of data transfer will be assured the EU economy would gain €720 billion in cumulative extra growth by 2030, equivalent to an increase of 0.6% in GDP on a yearly basis, €60 billion in annual exports, of which half coming from the manufacturing sector, boosting the position of European SMEs and 700 thousand new jobs will be created. Therefore, it is critical that the text of the new agreement will include proper safeguards as requested by the CJEU in Schrems II in order to ensure a long-standing Transatlantic Data Flow Agreement, on which the European data economy may foster, as well as, the protection of the rights of europeans being guaranteed in the years ahead. 

May 23, 2022No Comments

Dr. Ali Fathollah-Nejad on Iran’s Nuclear Policy and the JCPOA

In this interview conducted by the "Iran Desk" at ITSS Verona Dr. Ali Fathollah-Nejad addresses and analyzes Iran's nuclear policy and the revival of the JCPOA. The interview focuses on the possible outcomes of Iran's nuclear policy, the effect of Iran's nuclear policy in the region, and the international response and reaction from the international community.

Dr. Ali Fathollah-Nejad is a German–Iranian political scientist focusing on Iran, the Middle East, and the post-unipolar world order. He is an associate fellow with the American University of Beirut’s Issam Fares Institute for Public Policy and International Affairs (AUB-IFI) and author of the much-acclaimed book Iran in an Emerging New World Order: From Ahmadinejad to Rouhani (2021). Ali holds a Ph.D. in International Relations from SOAS.

Interviewers: Shahin Modarres, Yasmina Dionisi and Filippo Cimento.

May 23, 2022No Comments

Competition or Cooperation: What drives the U.S. Strategy in the Arctic?

Author: Irene Senfter.

Arctic politics: past and present

The Arctic region was a prominent theatre during the Cold War as it is home to Russia’s Northern Fleet, Russia’s second-strike nuclear capabilities, and North America's North Warning System. Gorbachev’s reassessment of the region as a “zone of peace” in 1987 inaugurated three decades of peaceful and cooperative regional governance. Sadly, Russia’s recent violation of the UN charter when invading Ukraine in 2022 does not bode well for a region that until recently has been relatively isolated from world politics

By purchasing Alaska from Russia in 1867, the United States has become an Arctic nation. However, except for the Cold War period, the region has received somewhat limited consideration in US national security strategy. The US has never developed an Arctic identity comparable to Russia or Canada. In 2013, the first US Arctic strategy document was released under President Obama. It is currently being updated under President Biden. 

This article will follow a structural realist approach to explore three main drivers of US strategy in the Arctic: access control of the Arctic Sea, freedom of navigation on Arctic Sea lanes, and regional security dilemma. A fourth driver, climate change, is examined through a liberal institutionalist lens.

Image Source: www.pixabay.com

Arctic competition: a realist perspective

According to Mearsheimer’s theory of structural realism, states operate in an anarchic international self-help system and strive for maximum power to assure state survival. Great powers struggle to become regional hegemons and want to prevent other states from becoming hegemons in their regions. From this perspective, the United States’ objective in the Arctic is to prevent Russia from becoming a regional hegemon. The Arctic region is of great strategic importance to the Russian government.  To achieve its goal, the US needs to control access to and exit from the Arctic Sea through a strong naval presence in the Bering Strait and allied military cooperation in the Chukchi Sea and the GIUK (Greenland-Iceland-UK) gap. 

Unlike other states, the US is not primarily interested in the extraction of natural resources and the development of new trade routes enabled by the receding Arctic ice masses. However, freedom of navigation on the Northern Sea Route (NSR) is a critical factor in preventing Russian regional hegemony in the Arctic. Just as the US insists on freely navigating the South China Sea, it strongly opposes Russia’s policies of mandatory registration and escort of vessels where the NSR runs through Russian territory or waters. It also disputes Canada’s sovereignty claim on the Northwest Passage.  Notably, China has declared itself as a “near-Arctic” nation and has presented plans for a Polar Silk Road,evoking the spectre of rising Chinese influence in the region.

Mearsheimer argues that states will use every opportunity to gain a strategic advantage over their adversaries. For realists, power derives from military strength and economic might, and states can never be sure about their adversaries’ intents. This dynamic is currently feeding a security dilemma in the Arctic.  Many observers view the Russian military build-up in the Arctic as potentially offensive to Western security. Russia has been building or upgrading military bases in the Arctic and modernising its nuclear submarine fleet located at the Kola Peninsula. New Russian hypersonic gliders could evade the North Warning System. All Arctic states have boosted their northern presence in reaction to heightened tensions. Russia looks at NATO’s increased presence in the Arctic region with suspicion, especially at Finland’s and Sweden’s recent NATO membership plans.

The US Department of Defense has instructed the US AirforceArmy, and Navy to increase capabilities, presence, cooperation with allies, and resilience in the Arctic. Alaska is already the most militarised of all US states, and in 2022 it will host the highest number of F-35 jets in the world. A deep-water port to be constructed in Nome will allow servicing of the heavy vessels that can blockade the Bering Strait. In this context and against common complaints, a large fleet of icebreakers is not necessarily of strategic importance to the US. 

Arctic cooperation: a liberal institutionalist perspective

According to liberal institutionalism, institutions enable cooperation between states as they encourage states to forego short-term benefits for long-term gains. Mearsheimer disputes that international institutions can change state behaviour in the military realm. However, he acknowledges their effectiveness in the environmental sphere. With its ambitious research projects and numerous working groups, the Arctic Council is a premier example of cooperation on climate change, environmental protection, sustainable development, and human security. Climate change in the Arcticis proceeding twice as fast as on the rest of the planet as the receding ice exposes more seawater. Seawater is darker than ice and absorbs rather than reflects heat. Rising sea levels are causing severe coastline erosion at a high cost to the mainly indigenous population. The permafrost is thawing, freeing up yet more carbon and causing damage to housing and infrastructure. Currently, the Arctic Council has paused all official meetings in reaction to Russia invading Ukraine in February 2022. 

Climate mitigation efforts, sustainable development, and Arctic scientific knowledge benefit communities living on all American coastlines and areas exposed to extreme weather and wildfires. Therefore, it is in the interest of the United States to find a way for the Arctic Council to continue its work. Despite the intense security competition between the US and China, American political leaders know that dialogue on environmental issues must continue. The work of the Arctic Council could be isolated from geopolitics in a similar way. 

Conclusion

Arctic geopolitics has limited bearing on the global balance of power, but global power play impacts Arctic security significantly. Sea access control, freedom of navigation, security dilemma management, and climate change in the Arctic are of national interest to the US and shape its Arctic strategy. This analysis shows how the US seeks to protect free and open domains in the Arctic. The challenge for the US and all Arctic nations consists in guaranteeing a stable and sustainable Arctic space for the benefit of the people who live in the Arctic and beyond. 

May 19, 2022No Comments

The Consequences of Ukrainian War on U.S.-China Relations

Author: Francesco Cirillo.

The war in Ukraine is shaking the European security system and also influencing Washington's strategies in the Indo-Pacific. With the focus on Europe, the US has slowed down its diplomatic and political activity in Asia while keeping a close eye on Beijing's moves. The latest moves such as Beijing's ratified security agreement with the Solomon Islands has alarmed Canberra, a close US ally, as well as the Americans. For Washington, the move is seen as an attempt by Beijing to strengthen its diplomatic and politico-military position in the South Pacific. Another hot dossier concerns the thorny issue of Taiwan. With the Russian invasion Washington is analysing how it can support Taipei in terms of military aid without bothering the People's Republic of China.

In recent months, with the outbreak of war in Ukraine, there have been growing concerns that in the near future Beijing might attempt an armed attack to occupy and annex Taiwan, which Beijing calls one of its 'rebel provinces'. At the moment, however, there seem to be no signs of a possible Chinese attack. The war has been a total game changer, causing concern within Xi Jinping's leadership. According to the Wall Street Journal, Chinese big tech companies are scaling back their business in the Russian Federation market, as they are intimidated by possible sanctions that the US and the West might apply against them. But recently a War Game was broadcast on NBC news, simulating an invasion of Taiwan by the People's Republic of China and a subsequent military confrontation with the US in the Pacific.

Image Source: https://pixabay.com/photos/mao-zedong-mao-tse-tung-chairman-mao-15983/ 

In fact, within the US federal agencies, preparations are being made for a possible war confrontation with Chinese forces. Despite the tension within some Chinese academic circles, it is theorised that a kind of competitive coexistence could be found with Washington, which would aim to exclude a warlike confrontation. In January 2022, Professor Wang Jisi , lecturer at the School of International Studies and President of the Institute of International and Strategic Studies at Peking University, wrote and published an essay entitled 'A Hot Peace: Is a Paradigm in U.S.-China Relations Emerging?'. In this short essay, the academic theorises that despite the mistrust between Washington and Beijing on various dossiers ranging from the Hong Kong issue to the mistrustful view of international relations via Taiwan, it is necessary to maintain and consolidate a channel of communication between the two leaderships in order to cooperate when the interests of both the People's Republic and the United States converge. According to Wang Jisi, this would lead the current status of Sino-US relations not towards a new 'Cold War' but towards a so-called 'Hot Peace', in which Beijing and Washington, despite competition in various fields, mutual mistrust and different visions concerning the status quo of the international chessboard will necessarily have to cooperate in certain dossiers of global importance.  

The war in Ukraine puts Beijing in front of a dangerous strategy: on the one hand it publicly pushes both Moscow and Kiev to find a point of convergence to open a diplomatic mediation table; on the other hand it wants to avoid being included in possible economic sanctions. Moreover, it adds that there could be a remote hypothesis that is at the moment difficult to realise: with a severely weakened post-war Russia, China, in exchange for financial aid, would ask the Kremlin for possible access to military technology in the experimental phase in order to study it and acquire know-how.

At the moment, however, China is focused on other dossiers and preparing for the Party Congress, but with an eye on the economic consequences that the conflict could bring globally. 

May 19, 2022No Comments

“He who accepts… survives”: Tales from Syria

The ITSS Verona Middle East team interviews a Syrian gentleman who wishes to remain anonymous for security reasons. He details his experiences of returning to Syrian after 12 years. He recounts his experiences from collecting his allotted rations, to experiencing the energy crisis currently affecting Syria, and more about life under dictatorship and civil war.

Interviewers: Anna Lorenzini and John Devine.

May 17, 2022No Comments

How innovation in terrorism financing explains Hezbollah’s financial success

Author: Camilla Cormegna.

Introduction

Terrorism financing is vital for a terrorist organisation to operate and carry out terrorist activities, but resources are also spent to provide community services such as welfare, education, public and protection service replacing governments as the main providers. An example of this is demonstrated by Hezbollah, the focus of this analysis, whose social services offered to the Lebanese Shiite population allows it to secure political supports while acquiring a sacred and untouchable status in Lebanon. To sustain its organisational establishment while pursuing ideological and political objectives, Hezbollah is estimated to earn $1 billion annually through various sources. 

Hezbollah depends on an array of revenue resources, although the bulk of its funding comes from Iran’s state-sponsorship, which provides around $800 million annually. This external funding comes with drawbacks, as sponsorship undermines group’s autonomy and pressures and sanctions on Iran negatively affect the state’s financing of Hezbollah. Therefore, Hezbollah is forced to innovate and diversify the sources of income to ensure financial sustainability. The group now leverages drug and human trafficking, diamonds smuggling, money laundering, propaganda televisionlocal exactions, and diverting charitable contributions

The article argues that Hezbollah owes its success to innovation in terrorism financing, making it one the most proficient and technically skilled terrorist groups in the world. Innovation refers to ability of terrorist groups to develop and adopt new financial techniques when pressured by countering terrorist financing strategies. This process can entail different phenomena such as the introduction of new tradeable commodities, new methods of production, new supply sources, and new market opportunities. The article presents Hezbollah’s success by exploring three profitable ventures that demonstrate the group’s ability to exploit lucrative opportunities: their sophisticated money-laundering scheme, the terror-crime nexus and the group’s ties with Venezuela, and the role of the Lebanese diaspora. 

Image Source: unsplash.com

A sophisticated money laundering scheme

Hezbollah runs an extensive network of illicit trade involving cars and drugs to launder money. In 2015 it was reported that Hezbollah purchased used cars in the United States which were then shipped and sold in West Africa while at the same time, drugs were shipped from Colombia to Europe. Both proceeds were sent to Lebanon through Hezbollah controlled money laundering channels and then deposited into the financial system. It is estimated that between 2007 and 2011, Hezbollah, with the help of the Lebanese Canadian Bank (LCB) and exchange houses, laundered $300 million. The LCB case shows the innovative adaption of Hezbollah, as after the 2011 scandal which detected and closed LBC’s money service businesses (MSBs), the terrorist organisation soon replaced MSBs resuming with the money laundering. This caseillustrates how Hezbollah’s facilitators are leveraging global trade and financial institutions to carry out illegal activities and how complex and sophisticated their system is, but it also demonstrates how facilitators among the Lebanese diaspora community are vital in supporting the organisation.  Moreover, counterterrorism financing (CTF) deficiencies and constraints allow Hezbollah to thrive and exploit the cross-border movement of funds. Financial intelligence units’ effectiveness is achieved through information sharing which is geographically circumscribed, and compliance with the Financial Action Task Force (FATF) legislative and regulatory standards is lacking in the Middle East

The terror-crime nexus with FARC and Venezuela’s role

As the money laundering scheme briefly introduced, Hezbollah has developed its own criminal activities such as the drug trade and it has done so by developing a strategic cooperation with FARC. Although their relationship is not political neither revolutionary but done to guarantee funds and financial independence through the diversification of income sources, the coupling of these organisations allows them to share operational knowledge, making them a “hybrid narc-terrorist network”. Hezbollah’s involvement with FARC and the drug trade was revealed in 2008 through the US and Colombian Operation Titan which dismantled a cocaine smuggling and money laundering ring which profited both organisations. 

Hezbollah is also tangled up with the Venezuelan government, which guarantees a safe haven to carry out their operations. Hezbollah’s involvement with Venezuela started in the 1980s, when the organisation started to deepen its association with many Lebanese immigrants in Latin America who fled the civil war. In 2005, the then Iranian and Venezuelan presidents Ahmadinejad and Chavez came together in a series of commercial ties, laying the foundations of their relationship. There is evidence that the Venezuelan government launder Hezbollah’s money while providing them with material support for their activities, but it also employs Hezbollah sympathisers as Ministers generating revenue through the distribution of narcotics. It is the case of the current Minister of Industries and National Production El Aissami of Iraqi-Lebanese descent, involved in the drug trafficking and in the issue of diplomatic passports for Hezbollah facilitators. In this environment characterised by corruption and bribery, Hezbollah continues to thrive because Latin American countries do not recognise Hezbollah as a terrorist organisation, thus failing to enforce CFT frameworks while facilitating illicit financial flows. Moreover, Venezuela is noncompliant with 31 out of the 40 FATF recommendations, demonstrating how the regime has no intention in addressing terrorism concerns.

The role of the Lebanese diaspora

Hezbollah’s presence in international diaspora communities provides the organisation with access to criminal ventures and funds. The diaspora is comprised of Lebanese emigrated mainly to Europe, Latin America, North America, and West Africa between 1975 and 1990. Hezbollah acquired financial support from the diaspora through its commitment to the fight against Israel and the West and it translated the support into an array of financial sources as well as financiers and facilitators. A cultural practice embedded within the diaspora is the sending of remittances to Lebanon and to Hezbollah, considering its legitimate status among Shia at home, as a method of support. However, third-party funding is risky for terrorist organisations, as donors may lose interest in the cause or law enforcement activity can lead to a decline in donations. In West Africa, the Lebanese diaspora is heavily involved in the diamond trade, as diamonds are a source of donation and as an informal tax to support the organisation back home. In Venezuela, Hezbollah-tied family clansparticipate in the local drug trade and money laundering, operating with protection from the regime. In Europe, Hezbollah raises money through charities which is legal in European countries because Hezbollah is not listed as a terrorist organisation, only its military wing is banned, allowing the group to raise money and collect donations for Hezbollah-tied associations. A terrorism designation would freeze al funds, financial assets, and economic resources of the group and would be a powerful CTF approach given the group’s vast network.

Conclusion

The case of Hezbollah is emblematic of innovation in terrorist financing because to achieve financial independence and to anticipate CTF approaches the group has evolved and diversified its sources of funding. This, in turn, has allowed the organisation to become one of the most technically capable and proficient terrorist groups in the world. With the advancement of technology, will the group continue to innovate its income sources by developing fund-raising schemes using cryptocurrencies? Maybe. Hezbollah has already received some cryptocurrency funding through the Iranian government, and in 2018 it was reported to have used crypto to fund part of its operations. Cryptocurrencies offer anonymity and may be used to diversify even more its portfolio, but because their supply is not flexible and their price can be controlled, terrorist organisations have so far shown reluctance to use them. Moreover, as long as the traditional financing methods are stable and not hampered by CTF efforts, the possibility of financing through cryptocurrency will not increase.