Explainer: How US sanctions are squeezing Iran-backed Hezbollah in Lebanon

Beirut: The conflict between Iran and the U.S. that has created tensions throughout much of the Middle East is now also being felt in Lebanon, where Washington has slapped sanctions on the Iran-backed Hezbollah and warned they could soon expand to its allies, further deepening the tiny Arab country’s economic crisis.

The Trump administration has intensified sanctions on the Lebanese militant group and institutions linked to it to unprecedented levels, targeting lawmakers for the first time as well as a local bank that Washington claims has ties to the group.

Two U.S. officials visited Beirut in September and warned the sanctions will increase to deprive Hezbollah of its sources of income.

The push is further adding to Lebanon’s severe financial and economic crisis, with Lebanese officials warning the country’s economy and banking sector can’t take the pressure.

“We have taken more actions recently against Hezbollah than in the history of our counterterrorism program,” Sigal P. Mandelker, undersecretary for terrorism and financial intelligence at the U.S. Treasury, said last month.

Mandelker said Washington is confident the Lebanese government and the central bank will ``do the right thing here in making sure that Hezbollah can no longer have access to funds at the bank.”

What is Hezbollah?

Hezbollah, whose Arabic name translates into “Party of God,” was established by Iran’s Revolutionary Guard after Israel’s invasion of Lebanon in 1982.

The group, which enjoys wide support among Lebanon’s Shiite community, runs institutions such as hospitals, clinics and schools.

Today, it is among the most effective armed groups in the Middle East with an arsenal more powerful than that of the Lebanese army, and has sent thousands of its fighters to Syria to back President Bashar Assad’s forces in that country’s civil war.

Hezbollah and its allies have more power than ever in parliament and government and President Michel Aoun is a strong ally of the group.

MPs targeted for first time

In July, the Treasury Department targeted two Hezbollah legislators, Amin Sherri and Mohammad Raad, in the first such move against lawmakers currently seated in Lebanon’s parliament.

A month later, the Treasury’s Office of Foreign Assets Control sanctioned Jammal Trust Bank for what it called ``knowingly facilitating banking activities.”

The bank, which denied the charges, was forced to close afterward.

So far, all the figures who have come under sanctions have been either Hezbollah officials or Shiite Muslim individuals who Washington says are aiding the group.

During a visit to Beirut, David Schenker, the U.S.’s assistant secretary of state for near eastern affairs, said Washington will designate in the future “individuals in Lebanon who are aiding and assisting Hezbollah, regardless of their sect or religion.”

Schenker did not elaborate in his interview with local LBC TV but local TV stations said Washington could start targeting Christian allies of the militant group, which has 14 members in parliament and three Cabinet ministers, including the Health Ministry.

Health Minister Jamil Jabbak, who is not a member of Hezbollah but is believed to be close to the group’s leader, was not granted a U.S. visa to attend the U.N. General Assembly in late September.

$10 million reward

Treasury Assistant Secretary for Terrorist Financing Marshall Billingslea visited Lebanon last week and a U.S. Embassy statement said he would “encourage Lebanon to take the necessary steps to maintain distance from Hezbollah and other malign actors attempting to destabilize Lebanon and its institutions.”

At the end of his visit, Billingslea met a group of journalists representing local media and told them that the U.S. Treasury was posting a $10 million reward for anyone who provides “valuable information on Hezbollah’s finances,” according to the Daily Star.

He said the main goal of the U.S. Treasury “was to deprive Hezbollah of all financial support, whether from Iran or through any other means.” Billingslea said Iran used to send the group $700 million a year, adding that U.S. sanctions on Iran have “diminished considerably” the cash inflow.