Before the terrorist attacks on the United States in 2001, Israel’s embassy in Argentina was attacked in 1992 by radical Islamists. Some of the attackers had ties to ties to state sponsor of terrorism Iran. 30 people died. There was another attack in 1994, also in Argentina, at a Jewish community center, AMIA. 85 people were killed. The year before the 1994 AMIA attack, six people were killed in New York in the World Trade Center incident, an eerie precursor to the largest terrorist attacks on U.S. soil eight years later.
The Western Hemisphere, and in Latin America is particular, is one of those global regions of the world where radical Islamic terror attacks are relatively rare, at least when compared to other global hotspots such as the Middle East. Regardless, the Buenos Aires and the World Trade Center attacks in the 1990s, and a few other less publicized incidents, should’ve served as a wake up call to U.S. policymakers that the enemy was branching out from its Middle East comfort zone.
For decades, individuals and groups linked to radical Islamic networks have operated below the radar throughout the Western Hemisphere including, the most obvious place, the United States, but also in Central America, South America, and even in the Caribbean. As discussed in the 9/11 Commission report, radical Islamists have snuck in to the United States from our northern border and our southern border. And they will continue to do so.
One of the groups that embedded itself in South America decades ago is Hizbollah. The South America Tri-Border region is one many areas of concern where Hizbollah and fellow terrorist travelers engage in criminal activity to, primarily, launder and counterfeit money to fund or facilitate legitimate and illegitimate business such as illegal drugs or human trafficking. The proceeds from these criminal enterprises are used to fund global terrorism.
SOUTHCOM’s commander Admiral James Stavridis testified last year before a Senate Committee on terrorism in the Americas and on recent Iranian activities in various countries. Stavridis told Senators Iranian adventurism in Latin America “is of concern principally because of the connections between the government of Iran, which is a state sponsor of terrorism, and Hezbollah. We see a great deal of Hezbollah activity throughout South America, in particular. [The] tri-border of Brazil is a particular concern, as in Brazil, Paraguay and Argentina, as well as [other] parts of Brazil and in the Caribbean Basin.”
Even with the occasional public comments from high-ranking U.S. officials on terrorism in the Americas, taxpayers rarely hear much about Hizbollah in Latin America, or about any of these nefarious actors in the region, because the latin American and the Caribbean, I believe, is one of the least understood parts of the world by American policymakers. This fuels, or doesn’t, the news and policymaking cycles. It is a shame. Without secure borders or robust regional cooperation with allies across the entire hemisphere, America is less secure and vulnerable.
Every every now and then, however, a story surface that is worth a mention and that helps tie it all together in a way that makes it interesting for a wider audience. Last week in South Florida, four individuals associated with three Miami companies were indicted for, among other things, devising an illegal financing for Hezbollah terrorists. The alleged transactions included a scheme to export export controlled electronics to Paraguay through the Port of Miami. The proceeds from the sale of the electronic equipment somehow ended up in the Hizbollah coffers.
According to the U.S. Justice Department, Samer Mehdi, 37, of Paraguay, Khaled T. Safadi, 56, of Miami, FL, Ulises Talavera, 46, of Miami, FL, Emilio Jacinto Gonzalez-Neira, 43, of Paraguay, Cedar Distributors, Inc., Transamerica Express of Miami, Inc., and Jumbo Cargo, Inc., were indicted on charges of conspiracy, 18 U.S.C. § 371, violating the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. §§ 1701-1706, and smuggling electronic goods from the United States to Paraguay, 18 U.S.C. § 554. If convicted, the trio face lot of jail time and hundreds of thousands to millions of dollars in fines.
The alleged terror financiers were shipping electronic goods, including Sony Playstation units, that cannot be exported to certain places without a license from the U.S. government (authorization that will likely not happen to certain places no matter if they had applied for a license). It turns out that this group was not only shipping export controlled items, but shipping them to an entity in Paraguay with terrorist ties the U.S. Government has on a terrorist watch list.
A brief sidebar on export controls and the Sony Playstation. Playstation units come with instructions warning users that the units cannot be exported to certain places of the world without U.S. government approval. The Playstation user agreement states that:
the Software may contain technology that is subject to certain restrictions under the U.S. Export Administration Regulations, and may not be exported or re-exported to U.S. embargoed destinations, or persons and entities prohibited by the U.S. Export Administration Regulations. In addition, Software may not be exported or re-exported to persons and entities prohibited by the U.S. Export Administration Regulations.
One of the lawyers for the indicted defendants tries to use humor in a rather lame attempt to deflect the seriousness of the charges. “Terrorism?” the defense lawyer Tein told the Associated Press. “More like ‘The Great Sony Playstation Caper.’ The indictment literally charges them with selling Playstation 2 video games to Paraguay. That’s some weapon of mass destruction.”
Not sure what question the defense team was responding do, and I could not access the complete indictment due to download issues at the DOJ website, but this matter has more to do with export controls, sanctions violations, and dealing with a terrorist organization that has murdered civilians, than weapons of mass destruction. Not much humor in that.
Trivializing violations will not make the matter go away. A lawyer must do what he or she thinks are in the best interest of the client; however, doing business with Hizbollah-linked organizations is bad for business and bad for America. Is compliance with U.S. export controls and economic sanctions especially burdensome? I do not think so.
Compliance with U.S. export controls and economic sanctions certainly adds transaction costs to a deal, but so do other regulations such as Customs and potentially many others that apply to particular goods and services. While reasonable persons disagree as to their effectiveness, until the Congress and the President say otherwise, it’s the law.
This case is a good example of how interconnected the Western Hemisphere has become commercially and, one hopes, politically. Most nations in Latin America and the Caribbean have weak, and in some cases, non-existent regulatory systems at par with U.S. export controls and economic sanctions. This must change. According to colleagues in the region, the banking sector in South America is especially in need better screening, as well as cooperation standards, with U.S. counterparts.
Of course economic sanctions and export controls are tools. These tools and other like them such as visa restrictions are most effective when part of a policy focused on attaining specific goals. Sanctions and export controls, alone, a policy does not make. In this particular Sony Playstation case, if these fellows were sending money to Hizbollah or using Hizbollah-connected entities blacklisted by the United States, then the indictments are more than well worth it. It sends a message to market and to terrorist that Uncle Sam is policing the international financial system and, over the long run, it will help keep America, and the region, safe.