Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is sanctioning three individuals, five companies, and two vessels that are involved in smuggling oil and liquified petroleum gas (LPG) to generate revenue for Hizballah. The network, comprised of Lebanese businessmen and companies and overseen by a senior leader of Hizballah’s finance team, has facilitated dozens of LPG shipments to the Government of Syria and channeled the profits to Hizballah. Illicit oil and LPG smuggling operations generate hundreds of millions of dollars for Hizballah and support the group’s terrorist activities.
“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,” said Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence Bradley T. Smith. “Treasury will continue to disrupt the oil smuggling and other financing networks that support Hizballah’s war machine.”
Today’s action is being taken pursuant to counterterrorism authority Executive Order (E.O.) 13224, as amended. The U.S. Department of State designated Hizballah as a Specially Designated Global Terrorist group (SDGT) pursuant to E.O. 13224 on October 31, 2001.
HIZBALLAH FINANCE NETWORKS AND OPERATIONS
Treasury has taken consistent action to target individuals directly or indirectly involved in Hizballah’s finance operations that provide critical revenue for the organization. Two prominent Hizballah officials involved in these efforts include Muhammad Qasir (Qasir) and Muhammad Qasim al-Bazzal (al-Bazzal), who manage a channel for transporting LPG and other oil distillates on behalf of Hizballah and directly receive payment for their sale. On May 15, 2018, OFAC designated Qasir pursuant to E.O. 13224, as amended, for acting for or on behalf of Hizballah as a critical conduit for financial disbursements from Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) to Hizballah. On November 20, 2018, OFAC designated al-Bazzal, an associate of Qasir, pursuant to E.O. 13224 for his support to Hizballah. OFAC has also taken a series of actions targeting Hizballah petroleum smuggling operations, including a January 31, 2024 action that targeted a Hizballah and IRGC-QF network that generated hundreds of millions of dollars’ worth of revenue through the sale of Iranian commodities including petroleum, much of it to the Syrian government.
The network designated today includes another senior Hizballah finance team official, and two Lebanese businessmen providing a seemingly legitimate front to facilitate Hizballah’s oil smuggling efforts. This network has facilitated dozens of LPG shipments to the Government of Syria, working with Syrian regime official Yasser Ibrahim, who was designated by the Department of State on August 20, 2020 for his role in corrupt business deals that benefitted Syrian President Assad.
HIZBALLAH OIL SMUGGLING NETWORK KEY FIGURES
As of late 2023, Hizballah official Muhammad Ibrahim Habib al-Sayyid (al-Sayyid) assumed responsibility for some of Hizballah’s commercial businesses from al-Bazzal. Al-Sayyid previously travelled with al-Bazzal to Southeast Asia to coordinate potential oil deals in the region for Hizballah’s finance team. He has also acted as an interlocutor between al-Bazzal and Lebanese businessman Ali Nayef Zgheib (Zgheib) on an oil project at a refinery site in Az-Zahrani, Lebanon.
Since at least late 2019, Zgheib, a petroleum chemistry expert, has advised and assisted Hizballah’s finance team behind the scenes, and has met with Qasir and al-Bazzal to coordinate their activities. As a member of Hizballah’s oil smuggling network, Zgheib secured storage tanks, likely for oil, on behalf of Hizballah. Senior Hizballah officials Qasir and al-Bazzal have made a profit from the LPG deals with Zgheib. Zgheib has met with at least one Hizballah-affiliated Lebanese Member of Parliament to discuss the financing of Hizballah oil projects and has also coordinated with Hizballah financier Muhammad Ibrahim Bazzi (Bazzi) regarding business negotiations. On May 17, 2018, OFAC designated Bazzi pursuant to E.O. 13224 for his support to Hizballah.
Lebanese businessman Boutros Georges Obeid (Obeid) is also involved in Hizballah’s energy deals, and jointly owns several companies, described below, with Zgheib.
Al-Sayyid, Zgheib, and Obeid are being designated pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Hizballah.
ZGHEIB AND OBEID BUSINESS NETWORK
Zgheib and Obeid own and manage Heavy Oil Distribution Company S.A.L. (HODICO) and several subsidiaries that have been involved in Hizballah’s energy deals, many of which have been coordinated by al-Bazzal. Zgheib serves as the Director of HODICO, while Obeid serves as the Chairman. Zgheib and Obeid also jointly manage Heavy Oil Distribution Company SAL Offshore (HODICO Offshore). Another HODICO subsidiary managed by Zgheib and Obeid, Heavy Industrial Fuels SAL HIF (HIF SAL), received a $1 million payment in 2022 from Yasser Ibrahim that was arranged by al-Bazzal, likely for LPG shipments to Syria.
Obeid is the primary owner of O.H.G. Holding SAL, another company within the HODICO group of companies, for which Zgheib serves as a director and member of the board. In 2020, Zgheib requested al-Bazzal’s assistance to manage payments for O.H.G. Holding SAL, which had encountered difficulties in transferring payments.
HODICO and HIF SAL are being designated pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Hizballah.
HODICO Offshore is being designated pursuant to E.O. 13224, as amended, for being owned, controlled, or directed by, directly or indirectly, Obeid and Zgheib.
O.H.G. Holding SAL is being designated pursuant to E.O. 13224, as amended, for being owned, controlled, or directed by, directly or indirectly, Obeid.
LPG SHIPMENT VESSELS
European Lebanese International Trade S.A.R.L. (ELIT) is represented by al-Bazzal and was responsible for dozens of LPG shipments made by the LPG tankers ALPHA GAS (IMO: 8817693) and MARINA (IMO: 9005493) to Baniyas port in Syria for Hokoul SAL Offshore Company (Hokoul), which was designated on September 4, 2019, pursuant to E.O. 13224, for being owned or controlled by al-Bazzal. Since al-Bazzal procured the MARINA in 2020, he and other Hizballah officials received payments from Yasser Ibrahim and Hokoul for shipments made by the tanker. In early 2022, al-Bazzal reached an agreement to pay for the purchase of the ALPHA GAS vessel via Hokoul. ELIT was used by al-Bazzal to cover the operating expenses for the ALPHA GAS and MARINA; Bazzal was at one time owed approximately $4 million for shipments made by the tankers. Both vessels have transported LPG to Baniyas port in Syria for Hokoul since their acquisition.
ELIT is being designated pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Hizballah.
The ALPHA GAS and MARINA are being identified as property in which Hizballah has an interest.
SANCTIONS IMPLICATIONS
As a result of today’s action, all property and interests in property of the designated persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons.
Non-U.S. persons are prohibited from causing or conspiring to cause U.S. persons to wittingly or unwittingly violate U.S. sanctions, as well as engaging in conduct that evades U.S. sanctions. OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. sanctions, including the factors that OFAC generally considers when determining an appropriate response to an apparent violation.
In addition, non-U.S. financial institutions and other persons that engage in certain transactions or activities with sanctioned entities and individuals may expose themselves to sanctions risk. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person, or the receipt of any contribution or provision of funds, goods, or services from any such person.