Strategic Horizons --
Abstract
Hezbollah has transformed South America's Tri-Border Area into a lucrative hub for financing its global operations. Exploiting weak state institutions, corruption, and porous borders, the group launders money through illicit trade, drug trafficking, and extortion, fueling its militant activities abroad. The United States faces a direct security threat as Hezbollah’s operatives leverage Latin America’s criminal networks to expand their reach, including into the American homeland. Despite existing counterterrorism measures, Washington’s approach remains inadequate. This article argues that the United States must pressure Brazil to formally designate Hezbollah as a terrorist organization, revitalize the 3+1 Group to enhance regional intelligence cooperation, and impose stricter sanctions on Paraguayan officials complicit in Hezbollah’s corruption. Without decisive action, the group’s influence will continue to grow, undermining American security interests in both hemispheres.
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Deep in the jungles of the Tri-Border Area—where Puerto Iguazú, Argentina; Foz do Iguaçu, Brazil; and Ciudad del Este, Paraguay converge—lurks a persistent yet often ignored threat to US national security and regional stability. Lebanese Hezbollah has entrenched itself in this lawless frontier, constructing a vast financial network that fuels its global operations. Exploiting weak institutions and rampant corruption, the group launders the profits of its illicit drug trade with impunity, alongside counterfeiting, crypto mining, and a web of other criminal enterprises—all in service of its broader campaign for global influence. The Tri-Border Area provides Hezbollah not only with a steady revenue stream but also with a secure base for planning future attacks.
This Latin American financial lifeline enables Hezbollah to bankroll its militant campaigns across the Middle East, South America, and even within the United States—all while funneling narcotics across the US–Mexico border. Yet Washington has failed to mount a sufficient response. Bureaucratic inertia, diplomatic hesitancy, and regional political dynamics have stymied effective countermeasures. To confront this threat, the United States must overhaul its approach: revitalizing the 3+1 Group to strengthen intelligence coordination, tightening sanctions on corrupt Paraguayan officials, and applying diplomatic pressure on Brazil to formally designate Hezbollah as a terrorist organization. Absent such decisive action, Hezbollah’s foothold in America’s backyard will only deepen, further imperiling US security interests.
Figure 1. The Friendship Bridge connecting Ciudad del Este (shown) and Foz do Iguaçu. (Author’s original photo)
Hezbollah’s Regional Fundraising and Ties to Global Terror
The Tri-Border Area—where Argentina, Brazil, and Paraguay meet—has long been a haven for illicit activity. Weak state institutions, endemic corruption, and porous borders provide Hezbollah with an ideal environment to raise funds and operate with near impunity. Nowhere is this more evident than in Ciudad del Este, Paraguay, where the Barakat clan has constructed a sophisticated financial network that fuels Hezbollah’s global operations.
In Ciudad del Este, Paraguay, the Barakat clan has built a criminal empire, operating a network of illicit shopping centers that fuel Hezbollah’s financial machine. Chief among them is Galería Page, a notorious hub where counterfeit electronics and clothing flow into the hands of unsuspecting Paraguayans and Brazilians. The sales may appear mundane, but the reality is far more insidious. Hezbollah operatives use this trade to launder money, finance their militant operations, and establish a secure base for planning future attacks—both in the region and beyond, including in the United States.
At the heart of this financial web is Assad Ahmad Barakat, a US-designated terrorist and former Hezbollah treasurer. He is widely credited with establishing—if not outright modernizing—Hezbollah’s fundraising apparatus in Ciudad del Este. Though currently imprisoned in Paraguay for white-collar crimes, his network remains intact, continuing to generate a steady stream of revenue for Hezbollah’s global operations.
Within the walls of Galería Page, another known Hezbollah financier, Mohammad Fayez Barakat, runs Big Boss International Import Export—an operation exposed in 2008 for transferring approximately USD 88,000 to Hezbollah operatives abroad. The US Treasury designated Galería Page a Specially Designated Terrorist Entity in 2006, yet neither sanctions nor law enforcement have succeeded in shutting it down. Both Galería Page and Big Boss International remain open for business, serving as financial conduits for Hezbollah’s activities, funneling money to the Shi’ite militant organization.
But the scope of Hezbollah’s operations in Latin America extends beyond counterfeit goods. The group has embedded itself in the drug trade, using Ciudad del Este as a critical node for trafficking narcotics from Paraguay to Europe. The group ships tons of cocaine under the guise of legitimate exports—charcoal, for instance—successfully evading detection. Yet Hezbollah does not act alone. The group has forged alliances with some of the region’s most formidable transnational criminal organizations, including Brazil’s Primeiro Comando da Capital (PCC), Colombia’s Fuerzas Armadas Revolucionarias de Colombia (FARC), and Mexico’s Zetas. These partnerships give Hezbollah access to US drug markets, where their illicit trade generates vast sums that are funneled back to militants in Lebanon. The consequences are dire. The drugs Hezbollah moves into the United States and Europe give Hezbollah the financial means to fund their jihadist warfare around the globe and fuel addiction and stability in the West.
Beyond narcotics, Hezbollah maintains a tight grip on the local Lebanese diaspora through a ruthless racketeering campaign. The Barakat clan employs coercion and fear, extorting business owners of Lebanese ancestry under the threat of violent retribution. Their methods are brutal—refuse to pay, and family members in Lebanon face harm, torture, or death. Though extortion does not match the profitability of drug trafficking, it serves another purpose: control. By instilling fear, Hezbollah ensures that the local population remains submissive, unwilling to interfere with its operations or cooperate with authorities.
Hezbollah’s presence in the Tri-Border Area is neither incidental nor marginal. It is deliberate, entrenched, and expanding. The network of illicit finance, drug trafficking, and racketeering does more than sustain Hezbollah’s war chest—it entrenches its influence in the Western Hemisphere, positioning the group as a persistent and evolving threat to US national security.
Threat to US National Security:
Hezbollah’s Latin American financial network operates as a double-edged sword. On one side, it fuels the Shi’ite extremist group’s ability to launch attacks against American interests in the Middle East, Latin America, and the homeland. On the other, it bankrolls these operations with the very narcotics that are devastating American communities. The connection is neither theoretical nor distant—it is already playing out on US soil.
In early 2024, US Border Patrol agents apprehended a 22-year-old Lebanese national, Basel Bassel Ebbadi. He claimed Hezbollah had trained him and that he planned to carry out a bombing in New York City. His arrest exposed a troubling reality: Hezbollah is not just financing operatives in Latin America; it is training them. Worse, it is exploiting the chaos at the US–Mexico border to smuggle them in. Islamist terrorists, disguised as migrants, infiltrate the United States, positioning themselves as sleeper cells, ready to strike at Hezbollah’s command. US authorities are now investigating whether Ebbadi’s training or funding came from Hezbollah’s networks in Paraguay or Venezuela.
Ebbadi may be the first known Hezbollah operative caught crossing the southern border, but he is unlikely to be the last. His case underscores a larger, more insidious reality: Hezbollah’s Latin American tentacles have already reached the American homeland. Senator Marco Rubio, now Secretary of State in the new Trump administration, has warned that the Iranian-backed militia possesses “an asymmetric capability to conduct attacks against US targets in case of a broader conflict around the world.” The implications are alarming. As an Iranian proxy, Hezbollah does not act alone; it follows Tehran’s strategic directives. This means Hezbollah’s sleeper cells—funded through its Latin American drug trade—could serve as instruments of Iranian asymmetric warfare inside the United States.
The connections are clear: Ebbadi’s arrest, Rubio’s warning, and Hezbollah’s entrenched criminal enterprise in the Tri-Border Area all point to the same conclusion. Hezbollah is leveraging its Latin American financial empire to underwrite its expansion into the United States. The question is no longer whether Hezbollah has infiltrated the United States—it is how far its reach extends and how long before it decides to strike.
Drug trafficking from the Tri-Border Area into the United States is more than a law enforcement challenge—it is a direct threat to national security. Hezbollah, in coordination with its Colombian, Mexican, and Brazilian criminal counterparts, smuggles a steady flow of deadly substances out of South America, including heroin and vast quantities of cocaine. While many actors contribute to the US drug trade, Hezbollah’s role is particularly insidious. The group’s smuggling operations are not just about profit; they are about power—funding terrorism while fueling an epidemic of addiction in the very country it seeks to undermine.
Cocaine remains Hezbollah’s primary commodity, and the toll is staggering. In 2021 alone, more than 24,000 Americans died from cocaine-related overdoses—a figure that continues to climb. Every shipment that Hezbollah pushes across the southern border feeds an escalating public health crisis, creating a wave of dependency that devastates communities from New York to Los Angeles. Yet the damage extends beyond the United States. The jihadist group and its Latin American narco-allies are not merely drug traffickers; they are architects of destruction, engineering a new generation of addicts across both the United States and Europe.
This is not just a criminal enterprise. It is asymmetric warfare. Hezbollah’s drug trade poisons American streets while filling its war chest. And as its influence in the Western Hemisphere expands, so too does the danger—to US sovereignty, to regional stability, and to the security of the free world.
Current US Policy and Recommended Policy Changes:
Despite Hezbollah’s long track record of bombings and terrorist attacks across South America and beyond, Brasilia still refuses to classify the group as a terrorist organization. This failure of recognition is more than a bureaucratic oversight—it actively undermines both American and Brazilian counterterrorism efforts, allowing Hezbollah operatives to move with relative impunity. The consequences of this neglect became clear in late 2023 when Brazilian police thwarted a Hezbollah-linked plot to attack synagogues and Jewish sites in Brasilia. The mastermind, Haissam Houssim Diab, a Brazilian national of Lebanese descent, had deep ties to Hezbollah. Yet his arrest exposed a far graver problem: Brazil’s intelligence agencies had missed multiple opportunities to dismantle his network before the attack ever reached the planning stage.
Diab’s criminal record should have set off alarms long before his latest arrest. Paraguayan authorities had previously detained him on anti-narcotics charges, and he had been arrested in Brazil as well. But because Brazil does not recognize Hezbollah as a terrorist entity, officials failed to scrutinize his extensive network of Lebanese associates. Had they done so, they might have uncovered Hezbollah’s broader presence within Brazil, neutralizing the threat before it could metastasize. Instead, Diab’s case stands as a glaring indictment of Brazilian intelligence failures and the risks of political complacency.
Washington cannot afford to ignore this lapse. The United States must use diplomatic pressure to compel Brazil to designate Hezbollah as a terrorist organization. Diab’s case alone provides a damning example of why this step is necessary. If Brazil is serious about securing its own borders—and by extension, the Western Hemisphere—it must treat Hezbollah as the enemy that it is. A formal designation would empower law enforcement, enhance intelligence-sharing, and allow authorities to dismantle Hezbollah’s financial and logistical operations on Brazilian soil before the group can strike again.
Beyond Brazil’s potential recognition of Hezbollah as a terrorist organization, existing counterterrorism strategies demand reform. Chief among them is the revitalization of the 3+1 Group to strengthen intelligence sharing between Buenos Aires, Asunción, and Brasília—as well as with Washington. In the wake of 9/11, these four nations established the 3+1 Group to coordinate law enforcement and intelligence efforts in the tri-border region, integrating agencies in Ciudad del Este, Paraguay; Puerto Iguazú, Argentina; and Foz do Iguaçu, Brazil. Yet, the initiative faltered. An anti-American tilt in the foreign policies of Brazil’s Lula administration and Argentina’s Kirchnerist governments weakened its effectiveness.
Disputes arose among the individual countries over the most effective strategy for countering the security threat. While the 3+1 Group laid the foundation for intelligence cooperation, diplomatic rifts rendered it ineffectual. A renewed commitment—one that prioritizes enhancement, coordination, and multinational collaboration—could transform the 3+1 framework into a powerful tool. If a new agreement permits Argentina, Brazil, and Paraguay to host US intelligence assets, US capabilities in the tri-border region would be significantly strengthened.
With Javier Milei’s 2023 election in Argentina, a departure from the status quo toward a more pro-American stance on the 3+1 Group appears increasingly likely. Milei has embraced a staunchly pro-Israel and pro-American approach to counterterrorism and foreign policy, even visiting the families of hostages taken by Hamas—an Iranian proxy militia and Hezbollah ally—during the October 7 attacks.
During his visit to Israel, Milei announced plans to relocate Argentina’s embassy from Tel Aviv to Jerusalem, aligning with current US policy. His unequivocal condemnation of Iranian-backed militias and his deep admiration for the United States and Israel signal a break from his Peronist predecessors in confronting the threats posed by jihadism and Iran.
This dramatic shift in Buenos Aires’ foreign policy sends a clear message to Washington: the Milei administration is open to renegotiating the 3+1 Group to facilitate enhanced American counterintelligence operations in the tri-border region. A revitalized 3+1 Group would strengthen intelligence sharing and cooperation among Argentina, Brazil, and Paraguay. Failures like the case of Diab—where intelligence gaps hindered effective action—underscore the need for a tightly integrated counterintelligence network. With American support and oversight, Argentina, Brazil, and Paraguay would be better positioned to confront Hezbollah directly, bolstering national security and curbing the group’s expanding influence in the United States’ backyard.
Weak state institutions and rampant corruption in Paraguay have allowed Hezbollah to establish a safe haven within the country. The group routinely organizes events attended by Paraguayan politicians, who exchange state secrets and law enforcement strategies for bribes. Hezbollah’s influence extends to the highest levels of government—US intelligence has implicated former Paraguayan President Horacio Cartes and current Vice President Hugo Velázquez in the group’s massive bribery scheme.
Corruption in Paraguay has effectively granted Hezbollah free rein to operate and fundraise without fear of significant government intervention. In response, the US Treasury has sanctioned both Cartes and Velázquez, reflecting Washington’s strategy of targeting Hezbollah’s financial networks through precision sanctions. Yet more must be done. To constrict Hezbollah’s fundraising in the tri-border region, the United States should expand sanctions to additional corrupt officials in Asunción, as well as Paraguayan banks and financial institutions that facilitate Hezbollah’s movement of capital. Freezing their US assets and cutting off access to American financial markets would deal a severe blow to their operations.
The Treasury Department should build upon its existing sanctions framework, making collaboration with Hezbollah too costly to sustain. By increasing financial and legal pressure, Washington can deter the next generation of Paraguayan lawmakers from engaging in bribery and push them toward dismantling Hezbollah’s entrenched presence in the region.
Conclusion
Lebanese Hezbollah has demonstrated remarkable adaptability, expanding its terror network beyond the Middle East into the remote jungles of South America. This strategic move has provided the group with both the funds and geographic reach necessary to orchestrate attacks across Latin America and the United States. Its vast criminal enterprise—spanning drug trafficking, counterfeiting, and racketeering—has transformed the tri-border region into a financial hub for jihadist operations.
Yet Hezbollah’s threat to the Americas extends beyond organized crime. The group’s financial networks actively fund terrorist plots in the United States and other countries in the Americas. The arrests of Ebbadi at the US–Mexico border and Diab in Brazil underscore the immediacy of the danger. These cases likely represent only a fraction of Hezbollah’s broader presence, with the tri-border area serving as a launchpad for future attacks.
Washington’s current response—a weakened 3+1 Group and limited sanctions on Paraguayan officials—falls far short of what is needed. To effectively counter Hezbollah, the United States must press Brasília to formally designate the group as a terrorist organization, reinvigorate the 3+1 framework to enhance regional intelligence coordination, and impose sweeping new sanctions to combat corruption in Paraguay. If Washington, alongside its partners in Asunción, Buenos Aires, and Brasília, implements these measures, Hezbollah’s financial networks will collapse, rendering its operations in the region largely impotent. The result: a significantly reduced risk of future attacks on US soil and throughout the hemisphere, along with a decisive blow to Tehran’s growing influence in Latin America. ♦
Mick Konstantopoulos
Mick Konstantopoulos is a recent graduate from the George Washington University’s Elliott School of International Affairs. He has interned with the US House of Representatives and the National Defense University. This essay is an accumulation of his research conducted at GWU and the National Defense University and was inspired by his own personal travel to the Tri-Border region in late 2023. In his free time, Konstantopoulos loves traveling and playing water polo.
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