External Contribution: Can Network Mapping of First- and Second-Degree Relatives Unveil Sanctions Evasion?

Wael al-Alwani, Observatory of Political and Economic Networks co-founder

Three years ago, Karam and I published a study reviewing the effectiveness of US and EU sanctions on Syria. We argued that Western sanctions only targeted the tip of the iceberg but overlooked the regime’s extended network. Here I focus on how we use programmatic tools to track Assad regime sanctions evasion through first- and second-degree relatives.

Detecting Sanctions Evasion Using Path Analysis

To evade sanctions, one key common tactic is the use of unsanctioned first-degree (parents, siblings, children) and second-degree (uncles/aunts, nieces/nephews, grandparents/children, in-laws and half-siblings) relatives to create new businesses, acting as potential fronts for sanctioned individuals. 

To understand the extent of this tactic, we analyzed the family and business connections of sanctioned individuals to find their relatives who started companies after sanctions were imposed. In some cases, these relatives were later sanctioned, so we included their companies if they were created during the period between the sanctions on both individuals. We identified over 130 companies set up by 120 relatives of currently sanctioned individuals. 

Some notable examples of potential sanctions evasion through relatives include:

• Nozhat Ali Al-Mamlouk, the second son of Ali Mamlouk. Ali is the former Director of Syria’s National Security Bureau and security advisor to Bashar al-Assad, who has been under various sanctions since May 2011. Nozhat co-founded First Class LLC, which received 371,000 USD from the UNDP in 2020. First Class was dissolved in May 2022.

• Suleman Maarouf, the nephew of Mohammed Nasif Kheirbek (known as Mohammed Nasif or Abu Wael), former Deputy VP for Security Affairs in Syria, a Bashar al-Assad advisor, and the architect of the relationships with Iran and its proxies. Mohammed Nasif was sanctioned by OFAC in 2007; Suleman Maarouf was sanctioned by the EU in 2012. However, between 2007 and 2012, Suleman Maarouf utilized his access to power and wealth to incorporate numerous companies in Syria and the UK, including purchasing properties in Dubai and London. His influence grew so much that he became Bashar al-Assad’s “fixer,” as the International Consortium of Investigative Journalists (ICIJ) referred to him in its Panama Papers leaks.

  
  

We also observed a common evasion tactic of individuals transferring ownership of their companies to family members after sanctions were imposed. By reviewing companies listed in the Syrian Official Gazette, social media profiles, obituaries, and other official documents, we tracked new businesses where relatives were used as fronts or informal nominee shareholders. Of the over 400 companies we analyzed, 135 have been set up by 121 relatives of sanctioned individuals since 2007, including 91 first-degree and 30 second-degree relatives.

A notable example is the Balwi family, who likely evaded sanctions by shifting ownership of their business to their brother-in-law, Mousa Muhammad Amshan. The Balwi brothers—Fadel, Muhammad, and Mut’i—were sanctioned by the US on 30 May 2023 for facilitating large money transfers to the Assad regime and its ally Iran through their company, Al-Fadel Exchange. After the sanctions, we believe they transferred their business to Amshan, who incorporated a new money transfer company established in November 2023, Royal Exchange LLC, likely as a front for Al-Fadel Exchange. Amshan may also be helping the Balawi brothers evade sanctions through his other companies, including MIRA Group MIG and Kharej Az Keshvar, which has connections to the Syrian regime, Hezbollah, and/or Iran's Islamic Revolutionary Guard Corps Quds Force.

While manual verification is unavoidable, programmatic approaches like the one outlined here can significantly narrow the search, which makes manual effort feasible. Our forthcoming report at the Observatory of Political and Economic Networks (OPEN), in collaboration with the Syrian Forum, will be published in early November; it will showcase other uses of how quantitative network analysis can measure and improve sanctions’ effectiveness.