OFAC Targets Hizballah Cash Courier Network And Re-designates Hizballah For Service To The IRGC-QF

Overview

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on 10 individuals involved in a network responsible for transferring cash to Hizballah. According to OFAC, the network used couriers traveling on commercial airline flights between Lebanon, Türkiye, the United Arab Emirates, and Iran to move up to hundreds of millions of dollars outside the formal financial system, enabling Hizballah to obtain foreign currency and evade sanctions. OFAC also re-designated Hizballah for service to the Iranian regime under the command of Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF). The action was taken pursuant to Executive Order (E.O.) 13224, as amended.

Background

Following the OFAC press report, Hizballah and its affiliates allegedly continue to rely on a range of financing mechanisms to generate and move funds throughout the region, including oil smuggling, illicit shipping, commodities sales, and bulk cash smuggling. OFAC additionally identified the network targeted in this action as one that was previously associated with the late IRGC-QF finance official Behnam Shahriyari and alleged that it facilitated support to terrorist proxy groups operating in the region.

The courier network

OFAC alleges that Turkish businessman Yunus Alper Yilmaz managed a network of couriers responsible for moving cash between countries in the region and Hizballah’s base in Lebanon. According to OFAC, Yilmaz used certain Türkiye-based exchange houses as fronts for business activities and provided front companies and bank accounts used in transfers connected to the IRGC-QF.

OFAC also identified Halil Ibrahim Kacmaz, Onder Dede, and Vasfi Akyuz as participants in the network. Additional couriers identified by OFAC include Mehmet Akyuz, Mehmet Acur, Feyyad Karasalih, Masoud Mousafar, Gulay Kaya Savci, and Emrah Ayaz, all of whom allegedly carried cash intended for Hizballah on commercial flights to Lebanon.

Designation basis

According to OFAC, Yunus Alper Yilmaz, Halil Ibrahim Kacmaz, and Onder Dede were designated pursuant to E.O. 13224, as amended, for materially assisting, sponsoring, or providing financial, material, or technological support for, or goods or services to or in support of, the IRGC-QF.

Additionally, Vasfi Akyuz, Mehmet Akyuz, Mehmet Acur, Feyyad Karasalih, Masoud Mousafar, Gulay Kaya Savci, and Emrah Ayaz were designated pursuant to E.O. 13224, as amended, for materially assisting, sponsoring, or providing financial, material, or technological support for, or goods or services to or in support of, Hizballah.

OFAC also re-designated Hizballah pursuant to E.O. 13224, as amended, for being owned, controlled, or directed by, or for having acted or purported to act for or on behalf of, the IRGC-QF. OFAC cited the IRGC-QF’s coordination of Hizballah attacks and involvement in directing Hizballah’s political decision-making as the basis for the re-designation.

For a full list of all parties targeted in this action, refer to this link.

OFAC designation implications

As with prior OFAC designations, all property and interests in property of the designated individuals and entities that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. Entities owned 50% or more by one or more blocked persons are also blocked under OFAC’s 50% Rule.

All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or blocked persons are prohibited unless either authorized by a general or specific license issued by OFAC or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person. 

The action also highlights the sanctions risks associated with cash courier schemes, exchange houses, and other informal value transfer mechanisms that may be used to move funds outside traditional financial channels. We note that businesses should continue to conduct appropriate sanctions screening and risk-based due diligence, particularly where transactions involve higher-risk jurisdictions, cash-intensive payment methods, or intermediary payment arrangements.

Next steps

Financial institutions and other businesses should review the newly designated individuals and assess whether any existing customers, counterparties, transactions, or business relationships may be affected by the designations. We emphasize that specific attention should be paid to transactions involving Lebanon, Türkiye, the United Arab Emirates, and Iran, as well as exchange houses and other payment channels that may present heightened sanctions risk.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.