Lebanon's banks to pay price of sanctions on Hezbollah
New US sanctions against Hezbollah are adding pressure to Lebanon’s already struggling banking sector, further burdening the country’s economy.
Several challenges lie ahead for the Lebanese banking sector this year. An economic crisis is plaguing the region and the Syrian war is affecting stability in Lebanon. Now, the country finds itself squeezed between the hammer of the United States, which is calling for further banking restrictions, and the anvil of Hezbollah, which does not want the country to comply with US financial authorities’ instructions.
The banking sector — already marred by a recessive Lebanese economy, paralyzed constitutional institutions and ineffective governance — is now grappling with political tension.
On Dec. 18, US President Barack Obama signed the Hizballah International Financing Prevention Act, which was submitted by Edward Royce, chairman of the House Foreign Affairs Committee. The law aims to expand economic sanctions on Lebanese Hezbollah and its Lebanese Al-Manar TV channel to prevent the party from access to banks and inhibit its financial operations.
This law was preceded by many other decisions designed to tighten the noose around Hezbollah’s neck and block it from the global banking system. A law passed in 2014 aims to cut off funding for Hezbollah gained through criminal activities. The United States classified Hezbollah as a terrorist organization in 1995.
