Hezbollah’s influence over the Port of Beirut and over the Lebanon–Syria border is closely linked to the weakness of the state and to endemic corruption in Lebanon.
The explosion at the Port of Beirut on 4 August 2020, in which large quantities of ammonium nitrate mixed with other chemicals devastated the port and its surrounding residential areas, killing and injuring hundreds of people, has intensified domestic and international attention concerning Hezbollah’s involvement in the port and in the war in Syria in support of the regime of Bashar al-Assad. The group has a well-documented record of using ammonium nitrate to make explosives, and the chemical is a component of the barrel bombs used by the Assad regime in the Syrian conflict. Hezbollah’s influence over the port and over Lebanon’s border with Syria is tightly linked to the weakness of the Lebanese state and to endemic corruption in Lebanon.
Use of border control
Hezbollah stands out among all political actors in Lebanon in having de facto control over Lebanon’s border with Syria. This control is exercised through collusion with state authorities. Since the time of the Syrian military occupation of Lebanon, which began in 1976, in the early stages of the Lebanese civil war, and finally ended in 2005, Lebanon and Syria have had a ‘special relationship’ that has made the border between the two countries highly porous. Weak state oversight over border dynamics, corruption within the Customs Administration and other state institutions, and vested interests by members of the country’s elites who are involved in licit and illicit trade, have all contributed to the Lebanese–Syrian border being managed largely notionally. As Hezbollah uses Syrian territory to train and deploy fighters, and as a conduit for weapons flowing from Iran, as well as to smuggle drugs, goods and arms in both directions, the group has long strived to exert control over the border. Its involvement in the Syrian conflict has meant that it has intensified its cross-border activities, and it currently has de facto authority over the entire border.
Hezbollah’s de facto control over Lebanon’s border with Syria is exercised through collusion with state authorities.
Hezbollah’s involvement in cross-border smuggling, including of narcotics, is an important source of revenue for the group, but the extent of its engagement in goods smuggling has increased over the past two years as both Lebanon and Syria have been hit by severe economic crises. In 2020, Hezbollah’s smuggling of goods subsidized by the Lebanese state for sale in Syria attracted significant public attention. Hezbollah’s engagement in the smuggling of subsidized wheat and fuel can be linked to the economic pressure that the group and its main sponsor Iran have been facing as a result of both US sanctions on Iran and Hezbollah’s intervention in the war in Syria. Hezbollah smuggles diesel oil and gasoline from Lebanon to Syria through collaboration with Maher al-Assad and his Fourth Brigade. State-subsidized diesel oil is sold on the Lebanese market at an average price of LBP 9,000. Hezbollah and the Fourth Brigade sell it in Syria at an average price of LBP 15,000.
Hezbollah secures the routes for the trucks from the Lebanese stations towards the Lebanon–Syria border without necessarily going via the Lebanese official border crossings. Once on Syrian territory, Hezbollah’s operatives, in collaboration with Fourth Brigade soldiers, would escort the trucks to their final destinations. On average, Hezbollah generates around $300 million per month by trafficking diesel fuel across the border with Syria. The angle to focus on in this context is that Hezbollah gains access to state-subsidized goods by means of its influence within state institutions. One eyewitness mentioned that fuel trucks heading to Syria in 2020 had been intercepted by Lebanese residents in the border town of Anjar, in the Beqaa Valley, at which time the drivers produced documents apparently authorized by the Ministry of Energy to show that they had formal permission to transport the subsidized fuel out of Lebanon.
Hezbollah uses smuggling not just as a source of revenue but also as political currency. After forming an alliance with Hezbollah, the FPM started to expand across Lebanon, especially in Christian areas, by opening new businesses (from small grocery shops to bakeries, clothing shops, mobile phone and computer shops, to home furniture retailers and construction material suppliers), thereby creating new jobs particularly for young people in their areas. The items sold in these shops were cheaper than elsewhere, as their supply came through the smuggling routes controlled by Hezbollah. Hezbollah also supported the FPM in opening new offices providing social support services to the latter’s local constituents, along the lines of Hezbollah’s own social services model. This allowed the FPM to develop capacity for local service delivery that it had not previously had, which in turn helped boost the number of seats it won in the 2018 parliamentary elections.
Use of the Port of Beirut
Since 1993, the Port of Beirut has been run by what is designated a ‘Transitional Commission’ (a new one was formed in 2002) that handles all financial matters of the port without coming under any scrutiny or monitoring by the government. None of the Ministry of Finance, the Central Tenders Board (whose feedback on tenders is non-binding), the Court of Audits or the Central Inspection authority has any powers to inspect the commission’s activities – despite the fact that the Transitional Commission uses public funds – as the commission is neither a public nor a private entity and therefore its governance is opaque. Over the years, Hezbollah’s involvement in the port grew through its connections with political elites and parties represented in the Transitional Commission (among them cronies affiliated with Amal and, from 2005 onwards, with the FPM). Hezbollah also had strong links with key ministers with sway over the port, such as Yusuf Finyanus (who held the transport and public works portfolio from 2016 until January 2020).
At the operational level, Hezbollah, like other political elites in Lebanon, benefits from existing corruption throughout state entities linked to the Port of Beirut to generate revenue and import and export illicit goods. Unnamed sources cited by Al Arab in 2020 claimed that, as a consequence of corruption, the Lebanese state receives only $800 million in customs fees annually from the port, rather than, according to these same sources, the estimated $3 billion that it should legitimately earn through customs revenue; the sources allege that the state shares the missing revenue with Hezbollah, thereby providing another income stream for the group.
In 2013, Al Joumhouria published an investigation detailing how corruption operates with regard to imports and exports at the Port of Beirut. The description applies to operations by all actors engaged in corruption at the port, and is not limited to Hezbollah and its allies. The report quoted a customs officer who had been asked about the process of importing televisions made in China in a way that would make them exempt from customs fees. By the officer’s account: ‘The company must declare that these are ‘computer screens’ rather than ‘televisions’, because computer screens are exempt from customs duties, unlike TVs which have a 5 per cent customs rate. In addition, bribes must be paid, which is a well-calculated bribe that takes into account the rate that should have been paid as customs and VAT.’ It was estimated that importing televisions in this way would have at the time cost just $12,000, compared with $27,000 if done through legal means.
The Al Joumhouria report added that customs officials were complicit not only in facilitating evading inspection of goods and registering imports as exempt, but also in collaborating with business owners and the administration of the Commercial Register in the process of ‘re-exporting’ goods (using fake documents). All these officials can register a shipment from Lebanon as being, for example, re-exported televisions, when the shipment could in reality contain anything of little value. The commercial entity re-exporting the supposed televisions can claim back from the Ministry of Finance the customs fees and VAT it supposedly paid on their import, while in reality selling the goods on the Lebanese market.
Where Hezbollah differs from its rivals is in the extent of its use of the Port of Beirut to transport drugs, weapons and explosive material both in and out of Lebanon without any state oversight of its operations or inspections of the hangars it uses. Sometimes, illicit goods enter Lebanon through the port for transport to Syria by land. At other times, materials used to make explosives are stored at the port and temporarily gathered to be prepared for shipment abroad. In 2019, the US Treasury added high-ranking Hezbollah official Wafiq Safa to the sanctions list, stating:
Imposing sanctions on Safa did not curb Hezbollah’s control over the Port of Beirut. Hezbollah’s involvement in importing and exporting ammonium nitrate – the main chemical found to have caused the explosion – through the port has raised questions about its link to the ammonium nitrate in the blast.