The IDF killed Haytham Abdullah Bakri, the head of the Al-Sadiq Currency Exchange, in strikes in southern Lebanon on Tuesday.
The exchange operates in collaboration with Hezbollah as a funds storage and transfer mechanism for funds originating from Iran’s IRGC’s Quds Force to support Hezbollah’s terrorist activities.
The funds are used by Hezbollah for military purposes, including purchasing weapons, manufacturing means, and providing salaries to operatives.
The IDF also struck and killed Behnam Shahriyari, the commander of the Quds Force’s Unit 190, which specializes in smuggling operations in Iran’s Qom province, last week.
Shahriyari exclusively oversaw the transfer of hundreds of millions of dollars annually from the Quds Force to its proxies.
The mechanisms included money transfer routes to Hezbollah, using offsets between currency exchanges in Turkey, Iraq, and the United Arab Emirates with Lebanese currency exchanges.
In particular, Iran takes advantage of the pre-existing Hawala system, which is normally used to transfer remittances to home countries.
What is the Hawala system?
The Hawala system dates back to the 14th century and is used to transfer large sums of money through informal financial networks.
In short, the money is sent through a network of brokers who take a small fee as payment before it reaches its destination, as well as exploit differences between the official and black market currency exchange rates to make a profit.
Iran exploits this system by using brokers to transfer funds to trusted individuals in Lebanon, who then give the funds to Hezbollah. Quds Force funds are then used to make up the difference for the initial broker in Turkey, Iraq, or the UAE.