Israel, Hezbollah war disrupts Syria's lucrative Captagon trade

Syria's illegal drug trade, a critical economic pillar for President Bashar Assad's regime, is under threat as the ongoing conflict between Israel and Hezbollah disrupts the production and smuggling of Captagon, an illicit stimulant wildly popular across the Middle East. The weakening of Hezbollah, a key ally and facilitator in the drug industry, could lead to significant economic repercussions for the Syrian government.

The Role of Captagon in Syria's Economy

Captagon, a brand name for the synthetic stimulant fenethylline, has become a major source of revenue for Syria. The country is currently the world's largest producer of Captagon, with Syrian drug trafficking reaching nearly three times the value of the combined drug trade of Mexican cartels, according to Syrian economic journalist Samir Tawil.

“The war in Syria has drained many economic resources, leading the regime to seek alternative funding,” Tawil told The Media Line. “Drugs of all kinds have become the most important economic resource for the Syrian regime and Hezbollah over the past 10 years.”

Sanctions and Key Figures in the Drug Trade

In March of last year, the UK, the US, and the European Union imposed sanctions on individuals suspected of involvement in the Captagon trade, including two of Assad's cousins. The Syrian regime, along with Hezbollah—the Lebanese group closely intertwined with the regime—is believed to rely on drug sales to fund military actions.

According to the UK, Assad earns around $60 billion annually from drug revenue. During the announcement of its sanctions, the UK asserted that the Syrian regime “plays a central role in the drug trade, with shipments worth billions of dollars leaving regime-controlled strongholds like the port of Latakia.”

The 4th Armored Division and Hezbollah's Involvement

The drug trade in Syria is overseen by high-ranking officials and military units, notably the 4th Armored Division led by Maher Assad, the president's brother, and his deputy Ghassan Bilal. Both have been implicated in facilitating drug production and smuggling.

In 2021, during the trial of Hassan Muhammad Daqou, a Syrian-Lebanese drug trafficker known as the “King of Captagon,” evidence emerged of conversations between Daqou and Bilal discussing smuggling drugs across the Syria-Lebanon border.

A source within the 4th Armored Division, speaking on condition of anonymity, revealed that most soldiers are involved in the drug trade. “The highest authorities provide security cover for those involved, in exchange for absolute loyalty to the Syrian regime,” the source said.

Hezbollah's Global Drug Operations

Hezbollah's involvement in drug trafficking extends beyond the Middle East. In 2002, the arrest of Lebanese citizen Asaad Barakat in Brazil on tax evasion charges unveiled his role in raising funds for Hezbollah through drug trafficking in Latin America. Subsequent arrests included Nemer Zaiter in 2008 for attempting to smuggle cocaine into the US and Hamza Barakat in 2013 for founding a fraud and smuggling network.

Dozens more have been arrested on similar charges, highlighting Hezbollah's global network for funding through illicit means.

Iran's Financial Support to Hezbollah

Hezbollah has long relied on financial and military support from Iran. In the 1980s, Iran provided $100 million annually, increasing to $200 million by 2005 and $300 million from 2006 to 2009. Despite fluctuations due to sanctions and oil prices, recent years have seen Iran's support stabilize around $700 million annually, especially after sanctions were lifted during the presidencies of Barack Obama and Joe Biden.

The Israeli assassination of Syrian businessman Baraa Qatirji on July 15 revealed his involvement in transporting funds from Iran to Hezbollah. Funds were moved by the Quds Force of the Iranian Revolutionary Guard Corps (IRGC) through oil and cash shipments to Syria, sold to a company called “BS” owned by Qatirji, with proceeds transferred to Hezbollah.

Mustafa Al-Naimi, an expert on Iranian affairs, told The Media Line that Hezbollah receives not only financial but also military support from Iran, with members undergoing training in Iran and Syria. He noted that Hezbollah is currently facing significant setbacks due to the loss of fighters in the war with Israel and the disruption of financial routes from Iran via Syria.

The Al-Qard Al-Hassan Association

Another key financial arm of Hezbollah is the Al-Qard Al-Hassan Association, founded in 1982 with over 30 branches in Lebanon. Operating outside the supervision of Lebanon's central bank, it is on Israel's terrorist list, according to The New York Times.

Adam Smith, former Senior Advisor to the US Office of Foreign Assets Control (OFAC), described the association as a “state within a state” in Lebanon and a primary source of Hezbollah's funding. The US Treasury imposed sanctions on Al-Qard Al-Hassan in 2007 and expanded them in 2021 to include six employees who funneled over $500 million through Lebanese banks.

US Legislative Actions Against the Captagon Trade

In December 2022, US President Joe Biden signed the “Captagon Act,” declaring Syria's involvement in the drug trade a national security threat. The law targets networks involved in Captagon production and trafficking linked to the Assad regime. Subsequent legislation specifically targeted members of Assad's family, including Maher Assad and figures from the 4th Armored Division.

Impact of the Israel-Hezbollah War on Drug Trafficking

The recent conflict between Israel and Hezbollah has significantly disrupted drug smuggling operations. Jordan and Saudi Arabia have reported a notable decline in drug seizures at their borders over the past month compared to previous years.

Political analyst Wael Khalidi noted that drug smuggling is a primary topic in meetings between Jordanian and Syrian officials. “The last month has seen economic stagnation in the Syrian regime due to the decline in Captagon smuggling, caused by the war between Israel and Hezbollah,” Khalidi told The Media Line.

Residents in Damascus have observed a shortage of Captagon supplies, with dealers attributing the disruption to Hezbollah's involvement in the conflict. Ahmad M., a local resident, said that drug users are having trouble getting their fix due to decreased supply.

Calls for International Action

Khalidi urges stronger international efforts to combat the drug trade originating from Syria. “Drugs are not difficult to smuggle from Syria to Washington,” he warned. “The smuggling networks are highly trained and operate in the interests of Hezbollah and Assad.”

He emphasizes that leniency shown to Syria, including its reintegration into the Arab League and trade deals under the guise of humanitarian aid, has facilitated the drug trade, especially through the port of Latakia. Entire generations are being lost due to drugs, whether through addiction or trafficking, Khalidi said.