The Case for a Just Use of the Lafarge Forfeiture in Iraq

On Oct. 18, 2022, Lafarge S.A., a global cement manufacturer, and its Syrian subsidiary entered an agreement with the Department of Justice to plead guilty to conspiracy to provide material support to the Islamic State group (ISIS) and the al-Nusrah Front (ANF). From 2013 to 2014, when they operated a cement plant in northern Syria, Lafarge and its local subsidiary routed illicit payments—including regular “donations”—to these designated foreign terrorist organizations in order to gain a business advantage. 

The U.S. government secured a guilty plea through a first-of-its-kind application of the Anti-Terrorism Act (18 U.S.C. § 2339B), which had not, until then, been used to prosecute a corporate entity. A U.S. district court judge sentenced the defendants to probation, a $90.7 million criminal fine, and payment of $687 million in a forfeiture money judgment. 

This sum currently remains in the Assets Forfeiture Fund (AFF) under the custody of the Justice Department. The AFF is authorized to use funds forfeited under federal criminal investigations to support victim compensation. Indeed, civil society organizations have called for the U.S. attorney general to ensure that the funds go to victims “of underlying atrocity crimes linked to Syria.” 

When it comes to victims of the broader conflict in Syria, including victims of ISIS and ANF, there is disagreement about how—and to whom—such monies should be disbursed. Several commentators have proposed the establishment of an intergovernmental Syria Victims Fund, just as the Justice Department established the BOTA Foundation as a restitution mechanism to return stolen assets to the people of Kazakhstan or the European Union has immobilized and diverted Russian state assets to support Ukraine. 

However, the exclusive focus on Syria has come at the expense of acknowledging practicalities on the ground. Despite the welcome reprieve it has brought for the Syrian people, the overthrow of the Bashar al-Assad regime in December 2024 has complicated the U.S.’s ability to engage with the new administration. Hayat Tahrir al-Sham (HTS), the armed group that led the ouster, was an affiliate of ANF. Although the Biden administration provided some limited sanctions relief, the State Department still includes HTS on its list of foreign terrorist organizations, which would complicate disbursement of the forfeited funds to the Syrian government—a fact made even more pronounced by HTS’s previous affiliation with ANF. 

There is, however, an alternative: disbursing at least some of the forfeiture to the Iraqi state. The Justice Department has a wide berth to decide how to distribute forfeited assets from criminal prosecutions. Iraq, as a state, has been not only a victim of ISIS and its affiliates—which at their peak held 40 percent of the country’s territory—but also a crucial partner to the U.S. in the ongoing fight against ISIS. Therefore—although not at the expense of cooperation with nongovernmental organizations and the United Nations—the U.S. should consider allocating some of the forfeited funds to the Iraqi government.

The Iraqi government has launched several initiatives to compensate individual victims, most notably the Yazidi Female Survivors’ Law passed in 2021. However, the government has faced difficulties implementing this law and other similar efforts; additional funding from the forfeiture toward this end would help. This use of monies would also be more efficient than establishing a new Syria Victims Fund. Rather than creating new infrastructure, the U.S. government could partner with the Iraqi government to improve the mechanisms already in place. 

Nevertheless, the legality of this approach remains a complex dilemma, one that raise several questions: 

• What is the scope of the Justice Department’s discretion over the funds?

• Is there sufficient proximate cause—an event directly related to an injury—between Lafarge’s conduct in Syria, which gave rise to the asset forfeiture, and the Iraqi state (as a victim of terrorism)?

• Even if there is sufficient proximate cause between Iraq and Lafarge’s conduct, would disbursing the funds to Syria be feasible?

• If at least some of the monies are disbursed to the Iraqi government, what safeguards should be implemented to ensure that the funds are properly spent? 

Agency Authority

At first glance, the Justice Department’s discretion to disburse the forfeited assets appears relatively extensive. The relevant statute, 21 U.S.C. § 853, grants wide authority for the attorney general to “restore forfeited property to victims of a violation of this subchapter, or take any other action to protect the rights of innocent persons which is in the interest of justice and which is not inconsistent with the provisions of this section.”

Additionally, 18 U.S.C. § 981(e) authorizes the attorney general to transfer “retained property [(i.e., forfeited assets)] as restoration to any victim of the offense giving rise to the forfeiture.” This statutory language suggests that the Justice Department has broad discretion to disburse the funds. However, there is seemingly an emphasis on restitution to individuals: “victims” and “innocent persons.” Although the language of the statute offers a wide berth, it is not immediately clear whether it requires that the funds be disbursed to benefit individual victims directly or, instead, to states like Iraq, which can then distribute it to victims downstream. 

Celeste Kmiotek and Sameer Saboungi have suggested that the Justice Department’s statutory authority to allocate monies from the AFF is broad enough to include international sharing with states. International sharing is an arrangement whereby the U.S. can share forfeited assets with countries that “participated directly or indirectly in the seizure or forfeiture of those assets,” according to the 2025 Asset Forfeiture Policy Manual. Although not a direct participant in the seizure of the assets, Iraq has partnered with the U.S. in the anti-ISIS Operation Inherent Resolve. It could be argued, therefore, that Iraq’s counterterrorism partnership with the U.S. qualifies it as a beneficiary of the forfeited funds, even if Iraq was not part of the Lafarge investigation. However, the policy manual also requires that all victims must be compensated before international sharing can occur, which would make the use of international sharing as the means by which to disburse the funds to the Iraqi government less efficient. 

Proximate Cause: The Iraq-Syria Connection

As an alternative to international sharing, to justify the disbursement of funds to the Iraqi government there must be a clear link between the Iraqi state as a victim of terrorism and Lafarge’s activities that gave rise to the forfeiture. Recall 18 U.S.C. § 981(e)(6)’s focus on victimhood. The question becomes to what extent the statute contemplates a broadening of “any victim” to include the Iraqi state itself. Answering this question and analyzing proximate cause requires examining the facts of the case. 

From 2010 to 2014, Lafarge operated a cement plant in Jalabiyeh in northeastern Syria. During this period, the company “negotiated agreements to pay these armed groups [ISIS and ANF] to protect [its] employees, to ensure continued operation of the Jalabiyeh Cement Plant, and to obtain economic advantage over their competitors in the Syrian cement market.” These payments, made through intermediaries, included regular “donation” payments to ISIS, as well as purchases of raw materials from ISIS-linked suppliers. 

Here, Lafarge’s “offense giving rise to the forfeiture” was “conspiracy to provide material support to one or more foreign terrorist organizations,” an offense not limited to ISIS in Syria, even though that is where Lafarge’s conduct took place. ISIS, at least at the time of the illicit payments, operated as a single entity between the two countries, meaning that it is irrelevant to what extent Lafarge’s conduct occurred in one country or the other. 

Although Lafarge’s illicit conduct occurred in Syria, there is a strong case that its actions had consequences for Iraqi citizens as well as the state itself, which would establish proximate cause. Support for Iraq is in line with18 U.S.C. § 981(e)(6) for several reasons. First and foremost, the territorial, political, financial, and humanitarian crisis that resulted from Iraq’s fight against ISIS, which remains a threat to this day, is alone enough to qualify the state itself as a victim of the activities that gave rise to the forfeiture. At its peak, ISIS controlled 40 percent of Iraq’s territory. Estimates for Iraq’s reconstruction by the end of the main phase of its war with ISIS ranged from $20 billion to $90 billion. Furthermore, ISIS’s activities destabilized local communities, displaced millions of Iraqis, and shook the already-weak institutions of the Iraqi state. 

Second, ISIS’s financial infrastructure at the time of Lafarge’s conduct was designed to facilitate payments between its locations in Iraq and Syria. For example, on June 29, 2014, ISIS leader Abu Bakr al-Baghdadi issued an edict calling for the centralization of caliphate funds, with subsequent edicts establishing financial and audit departments. Indeed, it is plausible that during the period in which Lafarge operated its factory, some of its illicit payments funded ISIS operations in Iraq. 

Third, ISIS is a transnational terrorist organization. One common spelling of its English acronym—the Islamic State of Iraq and Syria—provides insight into its leadership’s view of the two countries: as composing a larger, regional caliphate. Indeed, the organization started in Iraq and quickly spread to Syria, and its more recent incursions into sub-Saharan Africa show that it has little respect for international borders. 

These and other facts not only help establish the severity of ISIS’s crimes but also demonstrate that Lafarge’s activities in Syria helped create conditions that destabilized Iraq in such a manner that renders the state itself a “victim” under 21 U.S.C. § 853 and 18 U.S.C. § 981(e)(6). 

Sanctions and Syria

Establishing the Iraqi state as a proximate victim of Lafarge’s conduct does not make Syrians any less deserving of the forfeited funds. The challenge, however, arises from the unprecedented changes that have emerged since the December 2024 removal of Assad from power. HTS remains on the Office of Foreign Asset Control (OFAC) and UN Security Council sanctions lists. Under a separate regime, the U.S. still designates HTS a foreign terrorist organization. 

Two recent developments may present a real opportunity to engage with the Syrian state. First, the outgoing Biden administration announced General License No. 24 (GL-24), a temporary, six-month sanctions waiver “authorizing transactions with governing institutions in Syria and certain transactions related to energy and personal remittances.” Second, on Jan. 29, transitional leader Ahmed al-Sharaa announced the formal dissolution of HTS and other rebel groups and their absorption within the Syrian state. 

Although these events open the door for greater U.S. engagement with the new regime, they do not fully resolve the legal or political issues associated with sending such a large sum to the Syrian state. The Central Bank of Syria remains on the OFAC sanctions list. However, GL-24(a)(3) contains an exemption for “transactions that are ordinarily incident[al] and necessary to processing the transfer of noncommercial, personal remittances to Syria, including through the Central Bank of Syria.” Nevertheless, it is unclear whether the transfer of hundreds of millions of dollars from the AFF to the Central Bank of Syria would count as “noncommercial, personal remittances.” Even under the broad analysis of the term “victim” under 21 U.S.C. § 853 and 18 U.S.C. § 981(e)(6), it would likely be a stretch to fit this transfer within the limits of the GL-24 exemption. 

Even outside these strictly legal elements, there are political considerations that arise from engaging with the new regime. As Scott Anderson and Alex Zerden have written, there is a broad sanctions infrastructure in place for the Syrian government, including a designation as a state sponsor of terrorism. These measures have enjoyed bipartisan support in the past, which may require a degree of political maneuvering to overcome. And although outgoing senior officials in the Biden administration met with HTS leaders in December 2024, it is unpredictable whether the Trump administration will further loosen the previous sanctions regime, let alone meaningfully engage with al-Sharaa’s administration. Absent that, the legal and political viability of a large-scale cash transfer to the Syrian state remains questionable. Furthermore, the recent spate of clashes between Alawite loyalists to the former regime and the forces of the Sunni interim government makes the prospect of American engagement with Syria ever more remote and tenuous. 

Working With the Iraqi State

These factors suggest that transferring the forfeited funds to the Iraqi state could be an attractive option. But the final question is how to properly distribute the monies to the Iraqi government, for ultimate disbursement to affected populations. The options on the table are imperfect and would likely be controversial. 

Iraqi lawmakers, through their legislation on reparations for Yazidi victims and recent improvements toward its implementation, have shown a willingness to engage seriously with the issue of victim redress. In November 2024, Iraq made its first round of compensation payments to residents of Sinjar who suffered property damage during the fight against ISIS. And because of these new initiatives, many eligible ISIS victims have already submitted applications and identified themselves to the government. In combination with the national identification system, despite its shortcomings, this could remove administrative hurdles associated with deploying the funds through other institutions. 

However, one cannot ignore the reality of state corruption in Iraq. Despite pledges from the al-Sudani administration, corruption remains omnipresent at all levels of government. In 2024, nearly $800 million that had been allocated for ISIS victims in Anbar Province was embezzled by the Martyr’s Foundation, a government institution that distributes aid to the families of fallen soldiers, victims of the Ba’ath regime, and the victims of terrorism post-2003. This story is one among many that involve blatant theft of state funds, so writing a blank check without the right monitoring and safeguards would likely be imprudent.

More broadly, the Trump administration’s hard-nosed posture—even toward close allies—makes it difficult to envisage genuine collaboration between the U.S. and Iraq. The Justice Department might condition its disbursement of the forfeited funds to Iraq on its disengagement with Iran. For example, the Trump administration has made clear threats that it will remove Iraq’s sanctions waivers for purchases of Iranian energy and has called on Baghdad to rein in Tehran-affiliated militias. Withholding the funds might become a bargaining chip that Washington uses to further its leverage over Iraq. 

Nevertheless, disbursing the funds to the Iraqi government can be framed in a way that benefits both the U.S. and Iraq. Iraq should remind the Trump administration that the forfeited monies are not taxpayer dollars, so disbursing them does not come with the same political cost as providing new foreign assistance might. To that end, when disbursing funds, the U.S. government should treat Iraq as an implementing partner rather than a direct beneficiary. This might mean, for example, prioritizing Yazidi victims, given that the Yazidi Female Survivors’ Law is administered outside the auspices of the Martyr’s Foundation, as well as Christian minority populations victimized by ISIS. To preemptively address corruption concerns, it could also mean putting the money into a special account at the Central Bank of Iraq, with external audit and monitoring controls. 

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Treasury and Justice Department officials should continue to brainstorm ways to efficiently disburse some of the forfeited funds directly to victims in Syria, at the very least through additional targeted sanctions relief. However, given the difficulty of sending the funds to the Syrian government and directly to non-American victims of foreign terrorism, the U.S. should strongly consider providing at least some of the funds to the Iraqi state.