Abu Dhabi, UAESaturday 24 October 2020

US sanctions Lebanese entities that funnel funds to Hezbollah militants' families

Assistant Secretary of State David Schenker said US sanctions aim to cut Hezbollah's tentacles in the Lebanese economy

Hezbollah members during a parade in the group's southern suburb stronghold in Beirut on May 31, 2019. AFP
Hezbollah members during a parade in the group's southern suburb stronghold in Beirut on May 31, 2019. AFP

The US Treasury Department ramped up pressure on the Iranian-backed militant group Hezbollah on Wednesday, sanctioning 15 Lebanese entities and individuals linked to the group’s Martyrs Foundation.

The sanctions were announced simultaneously by the Treasury and the State Department, targeting twelve Lebanon-based entities affiliated with the Iran-based Martyrs Foundation, which is accused of funnelling money to the families of the group's suicide bombers.

They are:

  • Atlas Holding
  • Medical Equipment and Drugs International Corporation (MEDIC)
  • Shahed Pharm
  • Amana Fuel Co.
  • Amana Plus
  • Al Kawthar
  • Amana Sanitary and Paints Company LTD,
  • City Pharma SARL.
  • Global Touristic Services SAL.
  • Sanovera Pharm Company SARL
  • Mirath
  • Capital SAL

Most of the entities are seen as arms of Atlas Holding which “controls at least ten companies in numerous sectors in Lebanon, including fuel, pharmaceuticals, tourism, and clothing,” the Treasury said.

The US also blacklisted three Lebanese individuals affiliated with these companies that it said support the Martyrs Foundation. They are:

  • Kassem Mohamad Ali Bazzi, identified as a leader or official of Atlas Holding;
  • Jawad Nur Al Din, identified as a leader or official of the Martyrs Foundation
  • Sheikh Yusuf Aasi, identified as a leader or official of the Martyrs Foundation

In the statement, US Treasury Secretary Steven Mnuchin said “Hezbollah profits from the sale of goods vital to the Lebanese peoples’ health and economy, such as pharmaceuticals and gasoline.”

He added that the Trump administration stands with the Lebanese people, and is “committed to exposing and holding accountable” Hezbollah’s funding scheme.

According to the US Treasury, Atlas Holding “banked freely at [the now liquidated] Jammal Trust Bank (JTB), despite their open affiliation with previously designated Hezbollah entities”.

It said the bank facilitated hundreds of millions of dollars in transactions through the Lebanese financial system on behalf of Atlas Holding and its subsidiaries, and aided Hezbollah officials in evading scrutiny on these accounts from Lebanese banking authorities.

Sources familiar with the decision said the new sanctions bundle was expected after targeting JTB last August, but was delayed due to the anti-government protests in Lebanon.

Speaking to The National, Assistant Secretary of State David Schenker defined the goal of these sanctions as cutting Hezbollah’s tentacles in the Lebanese economy and ultimately shutting down these entities.

“You are going to see developments on the ground especially that little less than two per cent of Lebanese gas stations [which are those targeted] should disappear,” Mr Schenker said in a phone call on Wednesday. He explained that these sanctions will freeze the accounts of the entities and cripple their ability to make transactions.

The US government, he added, will work with the “Lebanese Central Bank who is responsive” to reach this end goal. The Jamal Trust Bank, which was designated by the US last August, shut down in September.

Mr Schenker said the timing of the designations is related to a process of collecting evidence, intelligence information on forensics, and financial information that “would withstand scrutiny within the US government.”

But with Lebanon forming a government that is closer to Hezbollah than any previous cabinet since 2005, Mr Schenker set the same expectations for its members. “The expectations are that the government of Lebanon will cooperate… we are withholding judgement on their performance, despite their budget having a tenuous relation with reality.”

The senior US official did not rule out more anti-corruption sanctions targeting a broad set of political figures in Lebanon under the Global Magnitsky Act. “It is something important for us and something we are working through right now,” he said.

Asked about the negative impact of these sanctions on Lebanon’s dwindling economy, Mr Schenker pushed back, arguing that expunging Hezbollah from the Lebanese economy would increase confidence in those sectors.

Hanin Ghaddar, a senior fellow at the Washington Institute for Near East Policy, where she studies Hezbollah, saw significance in targeting the pharmaceutical sector. “Iran has been flooding Lebanon with Iranian medicine, which is thriving due to the shortage of approved medicine in the midst of the economic crisis,” Ms Ghaddar told The National. Iranian products are thriving, they’re cheap and available.”

On targeting gas stations, she referenced gas smuggling through Syria. “Smuggling operations via Syrian routes have been bringing Hezbollah loads of money and thus putting more emphasis on these outlets.”

Updated: February 26, 2020 09:25 PM

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