The Narcotics and Terror Nexus between IRGC & Latin America III

Iran’s Guard uses Latin drug routes to fund terror

In Part 1, we provided an introduction into why Iran and the Islamic Revolutionary Guard Corps (IRGC) were interested in expanding their operations into Latin America. In Part II, we discussed how IRGC activities have not changed, even with the sanctions and pressure from Israel and Western nations. In this part (Part III), we go deeper into understanding why Latin America presents geopolitical and strategic advantages to the IRGC and their Axis of Resistance.

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Before we get started, its required to point out Hezbollah has been present in Latin America since the 1990s, which will be covered in detail later in the next part of this series.

Iran’s choice of Latin America is not accidental, opportunistic, nor transactional. They have a strategic plan for the region, which will deliver potentially the largest and most successful foreign investment outside the Middle East.

In 2005, Iran became an observing member of the Bolivarian Alliance of the Americas (ALBA). Iran’s entry was considered a political-economic alliance, but it was the foundational move to establish their own networks and create co-dependency among the illicit networks of the member nations. The “transformation” of Latin America, for Iran, was a strategically critical element of foreign policy traced back to the 2007 UN arms embargo. The embargo forced Iran to rapidly develop its procurement network in Latin America to access minerals, metals, materials, and technology to support its own weapons programs. By 2009, the IRGC had an extensive, mostly covert, network spread across Latin America, including front companies, shadow banking, and dual-use state-owned enterprises. From 2005-2009, Iran nearly doubled the number of its embassies in Latin America from six to eleven. By 2010, the relationship has matured into a network with mutual dependencies in trade, military cooperation, and illicit activities.

2013 brought the infamous “Soleimani Shift” to the region, focusing on developing illicit networks and working with drug cartels. The Soleimani Shift saw the Quds Force more involved in criminal activity supporting Hezbollah. When the Joint Comprehensive Plan of Action (JCPOA) was signed in 2015, the Soleimani Shift spiked IRGC activities as it sought to legitimize its presence to evade additional sanctions through “legitimate trade,” when the arms embargo was lifted in October 2020.

When the UN arms embargo was lifted in October 2020, Iranian activity in Venezuela expanded to over 2.35 million barrels of fuel, its first supermarket, shipping of perishable goods, and over 40 chartered commercial flights to Venezuela, carrying Iranian technicians. Venezuela, in return for these goods and services, sent US$ 500 million in gold back to Iran in the first six months.

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Iran has taken advantage of the US abandoning Latin America, using it as its best weapon against the United States. If it were to lose that weapon, Iran would have no meaningful way to threaten the United States that would be taken seriously. A stepped program of religious, cultural, political, diplomatic, economic and military activities was implemented to further develop ties across the entire region.

Religious Ties

Iran has always leveraged their own Shi’a expatriate community to export their revolution. The goal is to infiltrate existing intuitions and networks to ensure this community is directly aligned with Iran’s narrative. While Iran leverages their Shi’a community, it also exports religion to the masses, developing systems to train and support clerics, spread across Mexico, El Salvador, Nicaragua, Costa Rica, Panama, Cuba, Guyana, Colombia, Venezuela, Ecuador, Peru, Bolivia, Argentina, Uruguay, Paraguay, and Brazil.

Cultural Connection

While exporting religion will only be able to reach a limited group, Iran focuses on creating cultural and political ties with left-leaning communities. It has opened over 100 cultural centers across Latin America. Iranians sell the revolution as a social movement, not an Islamic uprising, that rose up because of exploitation of their natural resources by a foreign government. The message resonates in Latin America because it is their struggle as well, making it easier for Iran to find friends and financiers.

Iran has also invested heavily into media platforms such as, teleSUR, and HispanTV to broadcast their message to a large population, who are not all adherents to “send a strong message” that resonates with them. This increased their reach and audience to Venezuela, Argentina, Bolivia, and El Salvador.

Political Support

One effect of Iran’s campaign is to exert its influence over Shi’a communities in Latin America, which has directly seen more Shi’a Latin American candidates in local office. The 2020 Brazilian election was heavily populated with Hezbollah proxies from different political parties. An additional benefit for the Shi’a expatriate community was the wealth and influence they were able to gain and exploit various circles of influence.

Diplomatic and Economic Ties

After building cultural ties, Iran focused on developing diplomatic and economic relations, which would start to legitimate and formalize its presence. Interestingly, while the US decreased their presence and the waning Monroe Doctrine, most Latin Americans still predominantly favor the US despite their political differences.

Military Ties

Once Iran was fully entrenched diplomatically, they began to develop in the military domain. Iran currently has a defense attaché in Venezuela, Brazil, and Ecuador. Additionally, President Nicolas Maduro announced the creation of a new Scientific-Military Commission within the Venezuelan Armed Forces, with military advisors from Iran, Russia and China, defense cooperation becomes more important. The IRGC has maintained covert activities in Venezuela since 2006.

Defense cooperation had previously included military industrial exchanges on UAVs, jet aircraft engines, ammunition manufacturing, and helicopter parts.

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Iran’s Deeping Ties with Venezuela

In 2020, when Venezuela was facing gasoline shortages, having the largest reserves petroleum reserves in the world, the state-owned Petroleós de Venezuela (PDVSA) was not able to refine its heavy crude due to mismanagement and corruption. The Maduro regime turned to Iran to partner and provide fuel. Tareck El Aissami, the new oil minister, and Alex Saab, a Lebanese-Columbian businessman and the regime’s special envoy to Iran, worked out an oil-for-gas deal.

Within 45 days, Mahan Air, Iran’s airline, flew seventeen flights and the National Iranian Oil Company (NIOC) sailed five tankers from Iran to Venezuela to provide Chinese parts, Iranian technicians, and approximately 1.5 million barrels of gasoline to Venezuela. Even though the refineries were not functional months later, the Iranian regime received nine tons, the equivalent of approximately US$500 million, in gold bars as payment. Four Liberian flagged tankers were seized by the United States, which were described as the “largest US seizure of Iranian fuel” to date.

The entities involved – Mahan Air, NIOC, and the Islamic Republic of Iran Shipping Lines (IRISL) – are all sanctioned by the OFAC for their connections to the IRGC.

Much like Syria, the IRGC’s ability to operating in Venezuela is due to Hezbollah’s network, which will be discussed in detail in the next part of this series. Hezbollah’s influence with the Lebanese ex-patriate communities provides Iran a significant gateway to grow in Venezuela. Pivotal businessmen like Alex Saab facilitate Iran’s growing portfolio. Saab was arrested in June 2020 in Cape Verde, on eight counts of money laundering, which forced Maduro to find other Lebanese businessmen to continue to grow the portfolio.

One such facilitator is Lebanese-Venezuelan businessman Majed Khalil Mazjoub, and his brother Khaled, who have amassed a massive commercial empire in the shadows of the both the Chávez and Maduro regimes. The Khalil Mazjoub brothers are also well connected in Bolivia, receiving numerous preferential business deals from the Evo Morales regime. A close relative of the brothers in Lebanon, former finance minister Ali Hassan Khalil, is under OFAC sanctions for “providing material support to Hezbollah” and other corruption charges. Majed is a master of Middle Eastern networking with the trust, access, and placement within the Venezuela to develop Iran’s “commercial operations” within the Maduro regime.

Part of this cooperation was a new Iranian supermarket, Megasis, launched in July 2020 in Caracas. Based on reports from the Wall Street Journal, the supermarket is a “division” of Etka, the Iranian retail chain, which is a subsidiary of the Minister of Defense and Armed Forces Logistics (MODAFL) in Iran. Since 2006, MODAFL has partnered with the Venezuelan Company of Military Industries (CAVIM), Venezuela’s defense logistics company, to set up “military projects” to cover up financial transfers through PDVSA’s commercial exchange with China.

The depth of Iran’s cooperation with the Maduro regime, layered within illicit finance connections of facilitators and Hezbollah’s established crime-terror network, creates a tier-one security concern for the United States that is multi-faceted, easy to pivot and provides numerous opportunities through military and illicit tactics to target US interests.

How Does Iran Launder Funds?

IRGC launder their oil profits via narcotics networks through a sophisticated mixture of energy smuggling, front companies, and proxy militias that convert the sanctioned oil income into transnational criminal revenue. These mechanisms integrate the IRGC’s illicit oil trade with global narco-trafficking economies across the Middle East, Africa, and Latin America. By selling their oil via shell companies, front traders, and ship-to-ship transfers using forged documents and reflagged vessels, oil revenues are blended with criminal funds from narcotics and contraband markets to hide their source, including barter trades in cash, commodities, or gold conducted through intermediaries in Turkey, the United Arab Emirates, and China. These proceeds are redirected through Hezbollah controlled financial hubs in Lebanon, where currency is converted and laundered through front import-export firms and parallel banking systems, similar to cryptocurrency and hawala networks.

The IRGC is also known to route their oil revenues via the Houthis and Shi’a militias in Iraq and Syria. These groups manage smuggling pipelines that traffic methamphetamine, heroin, and Captagon from Afghanistan and Iran into the Middle East and Europe. Ships carrying both crude oil and narcotics regularly depart from Iranian ports like Bandar Abbas and Chabahar, using cash settlements to conceal profits within IRGC controlled trade infrastructures. Hezbollah operatives act as brokers, investing IRGC oil profits into cocaine shipments sourced via Latin America, specifically Columbia and Venezuela, merging oil and drug revenue cycles.

The money is laundered through a multi-layer “trade-based” system – IRGC oil shipments generate off-book revenues that are deposited into front companies or exchanged with drug proceeds. These funds are passed through layered financial institutions and hawala networks in Dubai, Muscat (Oman), and Beirut before entering in the real markets disguised as legitimate trade income or humanitarian financing. Hezbollah’s banking networks and exchange houses are key to laundering the funds.

Ultimately, this process sustains Iran’s proxy militias by funding arms trafficking, training and political subversion. It also weaponizes narcotics as both a funding and a destabilization tool. This cross-convergence of oil smuggling and drug trafficking routes reinforces the IRGC’s independency from Iran’s central government, maintaining its own revenue stream to finance regional and global asymmetric warfare.

Evidence linking IRGC to Drug Trafficking Routes

There have been numerous media, intelligence, seized shipments and US congressional hearing that have established IRGC operatives links to drug trafficking routes from the Middle East to Latin America and the Caribbean.

In early 2025, Syria TV confirmed the IRGC had revived narcotics trafficking networks in the eastern Syria Deir ez-Zor region, using female operatives, with forged Syrian passports, to smuggle Captagon and other drugs across Iraq and Lebanon, with over seven million pills and 27 kilograms of narcotics trafficked via tunnels connected to Iraqi supply routes. These operations not only serve a financial objective, but also reestablish IRGC military and intelligence footholds in conflict zones.

Throughout 2025, in Yemen, intelligence and naval monitoring identified IRGC smuggling vessels transporting both weapons and narcotics to the Houthis, confirming Iran’s reliance on narcotics to finance proxy wars.

In Latin America, IRGC and Hezbollah operatives have embedded themselves in Latin America’s narcotics trade. In Venezuela, Hezbollah’s Unit 910, funded and directed by IRGC, used state-backed drug routes and forged passports to move black cocaine, a compressed, low-detection cocaine, across the region and into the Western hemisphere. Intelligence reports have also connected Venezuela, Hezbollah and FARC in cocaine transportation from the Apure region using both maritime and aerial routes into Central America and the Caribbean.

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Hezbollah’s drug syndicate has been directly connected with Ecuador, Columbia, and Curaçao, with specific operatives handling both the financial and logistical operations for IRGC entities. IRGC has also been linked to Hezbollah in using the Tri-Border Area - Argentina-Brazil-Paraguay – as a major staging ground for drug and money laundering to support the IRGC global operations.

• Terrorism and sanctions-evasion have proven a broader criminal-finance scheme that intersect with illicit drug networks, demonstrating how the IRGC exploit criminal infrastructure to move funds and materials globally.

• Hezbollah’s global criminal support networks tie to drug trafficking, money laundering, and other illicit activities that propagate revenue directly to the IRGC front entities. The proceeds, front companies, and international networks are used to fund extremist operations solidly linking criminal enterprises with state actors.

• Narcotics trafficking serves as one component of a multi-faceted funding and logistics system for IRGC and their proxies. Since these operations are highly clandestine and involve multinational actors to carry out sophisticated movement of money, front entities, cross-border smuggling, and align with terrorist-financing objectives.

This brings us to the end of Part III of this series. Part IV will delve into Hezbollah’s Unit 910’s links to Latin America, the operational and financial structure.

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Regards,
Khalid Muhammad