On July 22, the US House of Representatives passed the Hezbollah International Financing Prevention Act to prevent Hezbollah — classified as a terrorist organization since 1995 — from gaining access to international financial institutions.
The move was no surprise. It aims to restrict the activities of Hezbollah, which represents Iran’s military wing in the Mediterranean region and is accused of supporting the Syrian regime. This process began two years ago, when a report issued by the US Treasury found that Hezbollah was laundering money through the now-defunct Lebanese Canadian Bank. A settlement deal was reached, whereby $102 million was paid to US authorities in lieu of prosecution. In June 2013, the US Treasury, under the Foreign Narcotics Kingpin Designation Act, decided to sanction four Lebanese citizens and three Lebanese institutions for their involvement in the organization of a network financing Hezbollah.
Lawyer Adib Tohme, an international criminal law and Lebanese banking expert, told Al-Monitor, “This bill holds foreign banks — not just American banks, as was the case previously — directly liable. This also means that central banks also risk sanctions if they carry out any transaction linked to Hezbollah.” It seems that the House is taking this step to strengthen its previous measures at cutting off funding to Hezbollah, by expanding their scope, reinforcing their implementation mechanisms and urging all customers inside the US and abroad to exert more control and rigor.
What is striking is that this bill comes on the heels of the seizure of the Central Bank of Cyprus over the Lebanese-owned FBME Bank, following the release of a US Treasury report on July 15 indicating that the latter is involved in money laundering activities linked to Hezbollah. The Lebanese banking system is indirectly involved with this incident because, although FBME Bank is chartered in Tanzania, it is part of Saab Financial Group, which owns the Lebanese Federal Bank, an independent bank that meets all globally imposed control standards and was never embargoed by US authorities.
AL-MONITOR All-Access gives you unlimited access to all our journalism, the full Daily Briefing, exclusive interviews, premium newsletters, and live events — for less than $2/week.
