Reassessing the Transnational Terrorism-Criminal Link in South America’s Tri-Border Area

The international terrorist presence in Latin America is concentrated in several “hotspots” where terrorist organizations have found financial and logistic support, as well as a supporting base. Among these areas are Venezuela and its Margarita Island, Trinidad and Tobago, the Iquique area in Chile, and the Tri-Border Area (TBA, or Triple Frontera) in South America.

The TBA, which includes the Brazilian city of Foz de Iguazú, the Argentinean Puerto Iguazú, and Ciudad del Este in Paraguay, has served in the past twenty years as an operational and logistic center for international terrorist groups, such as the Lebanese Hezbollah, as well as transnational criminal organizations. This area has a population of approximately 700,000 people; including roughly 30,000 inhabitants of Arab descent. The Arab community, which constitutes one of the largest immigrant groups in the region, is predominantly Lebanese, especially in Ciudad del Este and Foz de Iguazú. The local Lebanese population is largely Shia. [1]

The Triple Frontera is one of the most important commercial centers of South America, with approximately 20 thousand people transiting on a daily basis from the neighboring states to the free-trade area of Ciudad del Este in Paraguay. The intense volume of people and goods entering the TBA, together with its porous borders, are two important factors that originally attracted criminal and armed groups to this area. Additionally, the relative ease with which money is locally laundered and transferred to and from regions overseas constitutes a very powerful incentive to maintain a base of operations in the TBA. Therefore, transnational criminal groups such as the Mexican and Colombian drug cartels, Chinese and Russian mafias, and the Japanese Yakuza all appear to have a strongly rooted presence in this South American region. Within the TBA, the epicenter of organized crime is Ciudad del Este – an important hub of drug and human trafficking, and the smuggling of goods, weapons, contraband and counterfeit products. [2]

According to Brazilian intelligence sources, financial and ideological support of international terrorist groups in the TBA dates as far back as the early 1980s [3], and continued to grow during the following decades. By the end of the 1990s the TBA was described by U.S. authorities as the “main focus of Islamic extremism in Latin America” (U.S. Department of State, Patterns of Global Terrorism 2000). Despite often contradictory reports and official denials by the countries involved regarding the extent and nature of international terrorist activities taking place in the TBA in the aftermath of 9/11, both the U.S. Department of Treasury and the U.S Southern Command continued to indicate that the TBA remained one of the main terrorism-financing centers in Latin America. The same sources added that local cells in this area have been regularly involved in illicit activities and have kept close contact with criminal organizations, especially drug cartels (AFP-Spanish, October 11, 2003; March 3, 2004).

In March 2008, the Israeli Minister for Internal Security, Avi Dichter, reiterated the concern over international terrorist cells operating in the TBA, a fear echoed by the conservative Spanish Foundation for Social Research and Analysis (FAES) [4] –

which described the TBA as “a crucial center of Islamic terrorism financing, as well as of smuggling of weapons and contraband” (Los Andes Online [Mendoza], March 17; El Tiempo Ve [Puerto La Cruz], August 9).

The Triple Frontier as a Source of Terrorist Financing

Despite these claims, it remains difficult to assess the TBA’s current role in terrorism financing. It is similarly difficult to estimate the precise amount of money actually transferred to terrorist groups. It is often a complex task to separate contributions to terrorism from simple remittances, as it is equally complex to differentiate between money laundered on behalf of criminal organizations or money destined for terrorist groups. For example, between 2003 and 2006, Manhattan district attorney Robert Morgenthau traced billions of dollars channeled through New York City banks from money-laundering operations in the TBA, and although the attorney was convinced that some of this money was channeled toward terrorists, by the end of the investigation Morgenthau was compelled to admit he could not tie any of the $19 billion in laundered money directly to terrorists (Diario El Pais [Montevideo], April 4, 2006; New York Times, September 28, 2006).

A significant part of the money transfers in this area is done through informal value transfer systems, such at the hawala system. Since these money transfers take place outside the conventional banking system, they are consequently harder to identify and trace. [5]

Nevertheless, there is still some relevant data regarding the volume of the monetary transfers that are made from this region to international terrorist organizations, showing the existence of a connection between the TBA and the funding of international terrorism. In the context of releasing the 2006 and 2007 International Narcotics Control Strategy Report, the US Department of State affirmed that money is laundered and channeled toward the financing of terror in this South American region on a yearly basis, [6] adding that the level of these monetary transfers is conspicuous, being in the order of tens of millions (La Nación [Buenos Aires], March 1 2008). A 2005 intelligence report from Paraguay claimed that roughly 20 million dollars are collected in the triple frontier region each year to finance the Lebanese Hezbollah and the Palestinian Hamas (ANSA Noticiero En Español, July 18, 2005).

The Hezbollah Connection

Hezbollah’s presence in the TBA dates back to the 1980s, when the organization first established logistical and financial cells in the region, taking advantage of the extensive network of immigrants of Lebanese origin residing in the area. [7]

Later, Hezbollah operatives in the TBA increased their activities and became operational in the 1990s. In fact, it is believed that part of the planning and executing of the 1990s terrorist attacks in Argentina took place in the TBA. For example, at the beginning of the investigations for the March 1992 bombing of the Israeli Embassy in Buenos Aires it was reported that the late Hezbollah operative Imad Mughniyah entered Argentina through the TBA in 1992 to oversee the execution of the attack, using this area as a safe heaven. [8]

According to Paraguayan intelligence sources, over 46 Hezbollah operatives lived in the TBA until the year 2000, including Alí Khalil Mehri, the regional fundraiser for Hezbollah (CNN, November 7, 2001). Mehri, a resident of the TBA of Lebanese origin, was arrested in Ciudad del Este in 2001 and accused of selling fake software to finance terrorist groups, such as Hezbollah. Mehri fled before he could be tried (ABC Digital, March 11, 2007).

Among the most significant discoveries regarding the Hezbollah network in the TBA and its strong connection with local criminal activities was the uncovering of the “Barakat Clan” – an inter-related group of Lebanese residents of the TBA involved in both criminal activities and terrorism-financing. The clan revolved around the financial operations of Assad Ahmad Barakat, co-owner of one the largest shopping centers in Ciudad del Este, the Galeria Page Mall, used as a front to finance Hezbollah and recruit supporters for the organization (AFP-Spanish, March 9, 2006). In raiding Barakat’s apartment, the police found Hezbollah material and propaganda, including tapes praising martyrdom operations and speeches of Hezbollah Secretary Hassan Nasrallah (Clarin [Buenos Aires], December 9, 2007).

The U.S. Department of the Treasury later identified Ahmad Barakat as a Specially Designated Global Terrorist (SDGT) in June 2004 (La Gaceta Tucumán [Argentina], December 7, 2006; U.S. Department of the Treasury, Office of Public Affairs, JS1720, June 10, 2004). Nine other individuals and two enterprises were added to the list in 2006. One individual designated as a SDGT was Muhammad Yusif Abdallah, a regional Hezbollah leader and Barakat’s partner at the Galeria Page Mall. Abdallah was heavily involved in Hezbollah fundraising, and he gave the group a percentage of the profits deriving from the shopping mall (U.S. Department of the Treasury, Office of Public Affairs, December 6, 2006).

The Barakat Clan also included Ali Muhammad Kazan (who helped raise over $500,000), Farouk Omairi and his son Khaled Omairi. Farouk and Khaled Omairi were accused of involvement in narco-trafficking, money laundering, and terrorism financing (AZ Central.com, July 12 2006; La Nacion, August 25, 2007) Additionally, in May 2003 Paraguayan police arrested Lebanese merchant Hassan Abdallah Dayoub while in possession of 2.3 kilos of cocaine. Investigations later revealed that Dayoub, a cousin of Ahmad Barakat, was in charge of the “wing of narco-traffickers” of the Barakat Clan, [9] further proving the terror-criminal nexus behind Hezbollah’s fundraising operations in the TBA (Diario ABC Digital, May 12, 2003; March 12, 2007).

Although no major terrorist cells operating in the TBA have been found since the Barakat clan case, there are still reports of Islamic radicals residing in the area. In 2007, Lebanese businessman Kassen Hijazi, a resident of Ciudad del Este and owner of the Telefax Company, came under scrutiny for suspect money transfers to shadowy enterprises in Beirut, running an international money-laundering scheme and operating a Hezbollah financial front (AFP-Spanish, March 4, 2007; BBC-Spanish, December 15, 2007). [10] Finally, in August 2008 news sources reported that the United States was looking for a group of ten Lebanese citizens resident in the TBA who were suspected of being connected with international Islamic terrorist groups (ABC Color, August 5). The suspects were given Paraguayan visas in Lebanon (UPI Reporte LatAm, August 5).

Other Terrorist Groups Active in the Triple Frontier

Reports have also emerged of an al-Qaeda, Hamas and Gama’at al-Islamiya presence in the area. [11] The al-Qaeda connection with the TBA was, however, much stronger before the 9/11 attacks. For instance, in 1995 al-Qaeda leader Khalid Shaykh Muhammad spent twenty days in Brazil visiting alleged al-Qaeda sympathizers in Foz (Epoca-O’Globo [Rio de Janeiro], 2006; Estado de São Paulo; March 9, 2003; Washington Post, March 18, 2003). In 1996 the Brazilian Federal Police discovered that Lebanese explosives expert Marwan Al Safadi, who participated in the 1993 World Trade Center attack in New York City, also resided in the TBA in the 1990s (Epoca-O’Globo [Rio de Janeiro], 2006). In 1999, the Argentinean Office of the State Intelligence Secretary (Secretaría de Inteligencia del Estado – SIDE) reported the presence of al-Qaeda operatives in the Triple Frontera, stating that dormant cells were involved in financing and recruitment for terrorist groups, making as well the unusual claim that they were at the same time cooperating with local Shia groups (Clarin, September 16, 2001).

After 9/11 numerous police operations took place in the area, identifying al-Gama’at al-Islamiya suspects like Egyptian citizen Al-Mahdi Ibrahim Soliman, who was detained on April 15, 2002, in Foz. Egypt requested Soliman’s extradition in 2002, accusing him of being involved in the 1997 Luxor terrorist attacks; however, the Brazilian Supreme Court rejected the petition (O Estado de São Paulo, April 16, 2002). [12] Other suspects included Lebanese native Ali Nizar Darhoug, along with his nephew Muhammad Daoud Yassine, both accused of raising approximately 10 million dollars for al-Qaeda and Hamas. Following their arrest, Yassine was able to flee the country due to Paraguay’s lack of specific legislation on terrorism financing, while his uncle was held on tax-evasion charges (ANSA Noticiero En español, July 18, 2005; O Estado de São Paulo, April 16, 2002).

Conclusion

In sum, although reports regarding al-Qaeda activities in the area are tenuous, the later episodes referring to ongoing Hezbollah operations show that in the aftermath of 9/11 the extent and nature of Hezbollah activities in the area has diminished considerably due to increased law enforcement efforts. However, logistical operations and fundraising are still taking place in the triple frontier. It remains possible that individuals involved in support activities might become operational if ordered to do so. In this sense, the ongoing cooperation between the tri-border countries and the United States has been crucial in keeping illicit activities under tight control in the area, while the push for changes at the legislative level to better regulate terrorism-financing and money laundering-related crimes can also contribute to increasing the effectiveness of law-enforcement operations in the area.

Notes:

1. Mariano César Bartolomé, Elsa Llenderrozas, “La Triple Frontera desde la Perspectiva Argentina: Principal Foco Terrorista en el Cono Sur Americano” [The Tri-Border Area From the Argentinean Perspective: Main Terrorist Hotspot in the Southern Hemisphere], Center for Hemispheric Defense Studies, REDES 2002.

2. Rex Hudson, Terrorist and Organized Crime Groups in the Tri-Border Area (TBA) of South America” Federal Research Division, Library of Congress, July 2003.

3. Mariano César Bartolomé, Elsa Llenderrozas, p. 8.

4. Foundation for Social Research and Analysis; https://www.fundacionfaes.net

5. Benedetta Berti, “Assessing The Role Of The Hawala System, Its Role In Financing Terrorism, And Devising A Normative Regulatory Framework,” MIT International Review, Spring 2008.

6. Anne W Patterson, Assistant Secretary for International Narcotics and Law Enforcement Affairs, “Release of the 2006 International Narcotics Control Strategy Report,” On-the-Record Briefing, March 1, 2006

7. Rex Hudson.

8. Carlos Fayt, “Criminalidad del Terrorismo Sagrado. El Atentado a la Embajada de Israel en Argentina,” La Plata, Argentina: Editorial Universitaria de La Plata, 2001.

9. Rex Hudson, p. 30.

10. Testimony of General Bantz J. Craddock, Commander, United States Southern Command, Hearing of the House Armed Services Committee, “Fiscal Year 2006 National Defense Authorization budget request,” March 9, 2005.

11. Rex Hudson.

12. Brazilian Federal Supreme Court, “Ext 836 / EG – EGITO-EXTRADIÇÃO,” October 24, 2002.