Following the designation of the Jammal Trust Bank (JTB) of Lebanon on the US list of terrorist financiers this week, a senior American official told The National on Friday that Washington’s efforts aim at expunging the Iranian-backed group Hezbollah from the Lebanese financial system.
“Our sanctions efforts will continue and intensify,” the US senior official said in a phone call with The National on Friday. The designation of JTB by the Treasury’s Office of Foreign Assets Control is only the second time that the United States has gone after a Lebanese banking institution.
In 2011, the Lebanese Canadian Bank was designated for the same reason of “assisting in, sponsoring, or providing financial, material, or technological support for, or financial or other services” to Hezbollah.
The move did not happen overnight.
“We have been in close cooperation with number of countries and number of banks that either had JTB branches or corresponding accounts, and we aggressively worked with cooperative banks to freeze them,” the US official said adding that large sums of money have been already frozen.
Large sums have been frozen. The JTB linkages go beyond Hezbollah and delve into larger Iranian web of proxies, the official explained.
“JTB directly operated accounts on behalf of the [Iran-based] Martyrs foundation, a mechanism that Iran directed Hezbollah to establish to send money to the Palestinian Islamic Jihad organization and funnel money to suicide bombers,” he said.
Following the designation, the US now has “firm expectations” from the Lebanese government. Lebanese Prime Minister Saad Hariri visited Washington this month and discussed the issue of sanctions.
“We made it very clear that we will not tolerate Hezbollah access into the Lebanese financial system,” the US official said.
“We have firm expectations from the Government and the Central bank on the freezing, closing, and liquidation of bank accounts [associated with JTB] and that best practices are followed.”
While the US official would not speculate on next steps or sanctions that may target Hezbollah or its allies, he said the goal is to “expunge Hezbollah from the financial institutions.”
He appeared confident that latest sanctions by the Trump administration have significantly reduced Hezbollah’s cash flow. The official argued that the IRGC leader Qassem Soliemani “the guy that Hezbollah’s [Secretary General Hassan] Nasrallah reports to is running out of money.”
Asked about fears of Hezbollah retaliation against the US interests or Lebanese bankers, the official appeared confident that all players understand the US red lines and that violence is one of them.
Hanin Ghaddar, a senior fellow at the Washington Institute for Near East Policy, said the intensification of sanctions could mean targeting of Hezbollah’s political allies across sectarian lines. “They might target more banks that are not complying, but the US is also considering sanctions against Hezbollah’s Lebanese allies, from different sects in Lebanon,” Ms Ghaddar said.
“It is very clear in Washington that the current Lebanese government is incapable or unwilling to deal with Hezbollah’s increasing power, and they are looking to go beyond the party’s core targets,” the expert said.
Randa Slim, the director of track two dialogue at the Middle East Institute said the pace of current sanctions is faster and could indicate more intelligence gathering on Hezbollah.
“Sanctions on Hezbollah are not new. Democratic & Republican administrations have been pursuing a similar strategy against Hezbollah,” Ms Slim argued.
“What is different now is the acceleration in the pace of sanctions partly because the US Treasury has accumulated a wealth of data about Hezbollah financial infrastructure over the past years.”
Asked about the Palestinian linkage with the Martyrs foundation and the mention of Hamas and the PIJ in the announcement, Ms Slim told The National that this increasingly mirrors the complex regional pictures.
“The Palestinian linkage emphasizes the regional aspect of Hezbollah’s activities and the role they play in Iran’s regional network. In some ways the timing of this announcement suggests a complementary between Israeli expansion of its war against Iran beyond Syria and the US targeting of the financial underpinnings of this regional network,” she said.
The State Department announced on Friday that Assistant Secretary for Near Eastern Affairs, David Schenker, will be traveling to Lebanon in the next two weeks as part of a regional trip.
The US senior official will visit Saudi Arabia, Tunisia, Jordan, and Lebanon from “September 4-13 to discuss security and economic issues with government and civil society leaders,” the statement read.