Hezbollah, actively involved in Syria, is allegedly backed up with Iranian finances. Now, it seems that the politico-militant group is spreading its activities into Europe. With Bulgarian bus bombing and the planning of terrorist activities in Cyprus, Hezbollah has caused red alert among many nations. But behind the EU is its crisis and incapacity. Arguing that blacklisting Hezbollah will lead to destabilizing the Middle East economy and government, the EU has up to now resisted international pressure. Will it provide for its own safety?
EUROPOL listed money laundering as one of the main crime threats in the EU. Little investigation, however, is conducted on the financing of terrorism through licit or illicit proceeds. European drug transactions are said to be funding the activities of Hezbollah in the Middle East, and this may easily become a more serious threat than one would imagine, as the crisis hits Europe, forcing more people to trade drugs for money.
A highly volatile region in itself, with increasing religious radicalization and little legislative regulations, the Balkans are also suspected of harbouring Hezbollah network, with infrastructure, operational and financial resources readily available for use. The recent rise of Islamism in Bosnia also causes major concern.
So, if the EU still wants to stand as global leader, it has to reassess its attitude and rule of law principles. With one of the world’s largest and- no matter what- sustainable banking networks, it is a fruitful territory for money laundering and financing of terrorism. Surely, if it had not been for European banks, front-companies, charities and NGOs, Hezbollah would not have been able to sustain its criminal activities.
Nevertheless, the EU is seen to be lacking not only consensus and unity on foreign policy issues, but its inherent institutional weakness and lack of resources and manpower prevent it from being able to judge any infringements in legislation that it should guard. The recent report issued by FATF lists 20 countries with “strategic AML and CFT deficiencies”. One of them is Greece. An EU country, reporting to the EU Commission. The fact that AML/CFT regulations and standards are not met by Greece plunges the country itself, and the whole of the EU, into deeper crisis. The lack of appropriate legislation and the presence on such a list puts Greece into an even more embarrassing situation and poses a serious risk to the international financial system.
Individual EU countries very often fail to comply with standards- willingly or unwillingly. That is not surprising, as they still have more burning problems to think about- swimming out of the crisis for good, sorting out tax issues and much more. Even Germany and Luxembourg, though not openly referred to by Financial Action Task Force (FATF), have received criticism from the taskforce. The latter country is a hub of investment management with appropriate laws in place, though these laws are rarely actually enforced in suspicious cases.
Among European countries, only the Netherlands and the UK have decided to blacklist Hezbollah, which allows them to freeze assets of the group and its affiliates. Nevertheless, the political and military wings of Hezbollah are differentiated by the UK, providing loopholes and provoking alternative financing routes or methods to realize illicit activities.
The question is in appropriate legislation. But that is just half of the problem. AML/CFT regulations, standards and prosecution methods should be effectively implemented, monitored and evaluated, if the financing of terrorism is really to be controlled. To achieve this, EU countries have to reach a consensus and cooperate with the FATF and with each other in reaching goals, providing assistance and exchanging information and best practices. The hope now is that the presence on the list issued by FATF and OECD will stimulate Greece- and Europe- to review and ameliorate their approach to AML/CFT.