Saudi Arabia targets alleged Hezbollah procurement agents

Saudi Arabia imposed sanctions yesterday on three Lebanese nationals and four companies in Lebanon and China due to alleged connections to the terrorist group Hezbollah. All seven entities had been previously sanctioned by the U.S. Treasury Department in 2014 or 2015, accused of being “Hizballah procurement agents” or firms under their control.

As with a similar round of sanctions by Riyadh in December against alleged Hezbollah officials, yesterday’s designations represent a partial Saudi harmonization with America’s terror sanctions list. However, broader gaps between the U.S. and Saudi lists seem likely to persist in other areas where the kingdom does not see such a direct interest in cracking down on terrorist finance.

All of the entities targeted by Saudi Arabia yesterday stand accused by the U.S. of links to activity to bolster Hezbollah’s military influence, including in areas that could be used against Saudi Arabia or Saudi proxies in places like Syria or Yemen.

For example, Ali Husayn Zeaiter was previously sanctioned by the U.S. Treasury Department in July 2014 on charges of helping Hezbollah acquire equipment “for Hizballah’s use in UAVs [unmanned aerial vehicles],”and engaging in “fraudulent methods to avoid export restrictions and otherwise conceal Hizballah as the ultimate end-user or beneficiary of these goods.” In its announcement of sanctions on Zeaiter, Treasury noted that Hezbollah was using UAVs most recently in Syria, where Saudi Arabia’s proxies now happen to be fighting the group.

The U.S. subsequently imposed sanctions last November on two firms named Labico SAL Offshore and Aero Skyzone Co. Limited, claiming that Labico was owned by Zeaiter and that he created and controlled Aero Skyzone as a front company to procure UAV equipment for Hezbollah. Yesterday’s Saudi sanctions included Zeaiter, Labico SAL Offshore, and Aero Skyzone Co. Limited.

Also sanctioned by Treasury in November 2015 were four other entities, all of which were also sanctioned by Saudi Arabia yesterday. These included Fadi Hussein Serhan, whom the U.S. said “has purchased unmanned aerial vehicles,” as well as the Beirut-based firm Vatech SARL, which the U.S. indicated Serhan “used to purchase sensitive technology and equipment for Hizballah.”

At the time, the U.S. also sanctioned Lebanese national Adel Mohamad Cherri and the China-based firm Le-Hua Electronic Field Company, which it said was controlled by Cherri. According to Treasury, Cherri “facilitated Hizballah’s efforts to procure a variety of electronics from China for transport to Yemen for use in improvised explosive devices by the Houthis.

In its announcement of sanctions on all seven of these entities, Saudi Arabia’s interior ministry declared that “the kingdom will continue to combat the terrorist activities of the so-called ‘Party of God,’” adding that “Hezbollah’s militants and extremist activities should not be tolerated by any nation or international organization.” Yet when the kingdom publicly issued a formal list of banned terrorist groups in 2014, it specifically targeted “Hezbollah in the Hejaz,” namely the terrorist group’s Saudi branch but not its central branch in Lebanon.

There is no indication that Saudi Arabia has since updated this list, which also excludes U.S.-designated Foreign Terrorist Organizations Hamas, Palestinian Islamic Jihad, and the Popular Front for the Liberation of Palestine. This omission would seem to conflict with the Saudi foreign minister’s recent remarks on CNN that “Hezbollah in Lebanon” is “the world’s number one terrorist organization.”

Saudi Arabia’s 2014 terror list did include al-Qaeda in the Arabian Peninsula. However, the kingdom’s massive air campaign in Yemen appears not to have conducted a single airstrike on AQAP, which is operating more in the open than ever before and has taken advantage of wartime chaos to capture the capitals of several Yemeni provinces. Additionally, the kingdom has apparently been hosting two prominent Yemenis under U.S. sanctions on charges of having aided al-Qaeda.

Saudi Arabia’s latest sanctions come amidst a “comprehensive review” of Riyadh’s Lebanon policies after Lebanon declined to back resolutions at the Arab League and Organization of Islamic Cooperation to condemn Iran over attacks on Saudi diplomatic facilities in Tehran and Mashhad in January. The kingdom suspended $4 billion in security assistance to Beirut last week and issued a travel warning urging its citizens to avoid Lebanon that was swiftly echoed by four other Gulf states.

Thus, the new Saudi sanctions are best understood as a reflection of Riyadh’s perceived security interests in places like Lebanon, Syria, and Yemen as it pushes back against Iranian-backed activity by Shi’ite terrorist groups such as Hezbollah. The kingdom is unlikely to follow such actions with sanctions on financial operatives for other U.S.-designated terrorist groups such as al-Qaeda or Hamas.

David Andrew Weinberg is a Senior Fellow at the Foundation for Defense of Democracies. He specializes on Saudi Arabia and the Gulf states.

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