Hezbollah runs financial operations across the European continent, including drug smuggling and blood diamond trading, Austria’s Documentation Center on Political Islam (DPI) revealed in its new report.
For context, the US Government estimates that Hezbollah’s yearly budget exceeds $1 billion, 30% of which is obtained from global illicit activities. Hezbollah’s financial operations span multiple continents and include money laundering schemes in Europe, drug trafficking in Latin America, Africa, and Europe, trade in blood diamonds in Africa, and oil smuggling in the Middle East.
DPI found that Hezbollah’s financial operations span the European continent, with particular focus on wealthier, larger nations like France and Germany.
The operations in Europe span multiple trade sectors and blur the line between licit and illicit commerce, linking the group directly to criminal networks.
These activities are largely coordinated through Hezbollah’s External Security Organization, specifically its Business Affairs Component (BAC), which has longstanding ties to Latin American drug cartels. The group facilitates drug sales in Europe and the United States, and then launders the proceeds through complex trade-based schemes, mixing illicit funds with legitimate business transactions before transferring money, often via cash couriers, back to Lebanon.
One notable example is the “Cedar Network,” uncovered in 2016, which handled cocaine shipments from South America to Europe, laundered profits through luxury goods like cars and watches, and funneled funds through Africa and into Lebanon, where they were used in part to finance weapons purchases. This infrastructure was capable of laundering millions of euros weekly.
Another method Hezbollah uses is the art market. This provides the group with discretion, because privacy in this field is protected. Hezbollah can buy and sell high-value works to conceal the origins of illicit funds. Additionally, the subjective nature of the value of art allows prices to be easily inflated or deflated as such. Art can then be sold across national borders without alerting the authorities.
At the heart of this operational activity is Nazem Said Ahmad, a high-profile art dealer based in Beirut who was sanctioned by the US in 2019 and by the UK in 2023. His location is unknown, and the US is offering a $10 million reward for his whereabouts. Ahmad was found to have exploited the UK, Belgian, and US fine art markets and smuggled blood diamonds to run financing operations for Hezbollah. Ahmad also used aliases, front companies, and fraudulent paperwork to purchase or consign luxury goods and art.
The DPI report also revealed that Hezbollah has diversified its financial operations by using cryptocurrencies, particularly Tether (USDT) on the TRON network, for more anonymous money transfers. This shift mirrors trends among other criminal organizations using the blockchain for illicit purposes, as law enforcement is less experienced in tracing Tether than, say, Bitcoin.
One prominent figure is Tawfiq Muhammad Said al-Law, who provided Hezbollah with digital wallets for cryptocurrencies to receive funds from IRGC commodity sales. In May 2023, the Israeli government seized $1.7 million in crypto from 40 wallets controlled by al-Law, marking the first time any agency seized cryptocurrency from Hezbollah.
Countering Hezbollah’s financial operations in Europe
The US is at the forefront of actions aimed at tracking and countering Hezbollah’s finances. European countries, however, are out of step with the US, both in their capacities and in their differing designations of actors linked to Hezbollah’s financial operations.
The DPI provided an example of when, in 2025, the US moved to designate Latin American drug cartels (one of which, Tren de Aragua in Venezuela, reportedly cooperates with Hezbollah) as terrorist organizations, which allows the US to apply CFT measures against the cartels. Europe did not follow suit.
One major hurdle is the distinction between Hezbollah's political and military arms. In 2019 and 2020, the UK and Germany moved from only proscribing Hezbollah’s military wing to identifying the entire group as a terror organization. However, other countries, such as France, designate only the group’s military wing as such.
DPI said that the prevailing lack of designation for Hezbollah and the IRGC over the years has allowed donations to charities and religious organizations to continue to provide funding to entities linked with both organizations.
Another barrier to countering Hezbollah in Europe is the lack of international coordination on applying Anti-Money Laundering laws across borders. This is partly due to the high cost of implementing AML measures and the complexity of the operations involved.
A final barrier is that Hezbollah’s money becomes very difficult, if not often impossible, to track once it reaches Lebanon. The money receives significant protection once it reaches Lebanon, and Lebanese banks lack independence due to political interference.
The report did note that, in 2023-2024, Hezbollah’s financial operations were impacted by Israel’s military actions and the political changes in Lebanon, which limited Hezbollah’s access to key financial hubs and routes. However, despite these setbacks, Hezbollah continues to find ways to fund its operations through illicit financial activities.
DPI argued that Hezbollah’s financial operations in Europe require a more coherent and uncompromising stance on the group’s nature and international footprint, including the end to the fragmented designation of Hezbollah. Without a unified EU designation that covers both the political and military wings of Hezbollah, legal loopholes persist, enabling continued fundraising and financial activity under the guise of legitimate operations, it said.
Finally, it said that no strategy for countering Hezbollah’s financial networks in Europe can be complete without addressing the broader problem of how embedded Hezbollah is within the Lebanese state structure, which provides Hezbollah operatives with both protection and resources. Changes in government in Lebanon and the lifting of banking secrecy would be “two meaningful steps in the right direction,” it said.
“Given the terrorist operations conducted in Bulgaria, Greece, Cyprus, Belgium, France, Italy, and Germany, Hezbollah poses a definitive security threat to Europe,” DPI concluded, adding that, “even if Hezbollah ceases to pose a direct security threat to Europe in the form of terrorist acts (and there is no indication that such a threat is off the table), Hezbollah’s financial operations in Europe nevertheless constitute a major lifeline for the group, contributing to sustaining it as a destabilizing force elsewhere in the world.”