Exclusive - Lebanon Scrambles to Contain Fallout from New US Sanctions on Hezbollah

Exclusive - Lebanon Scrambles to Contain Fallout from New US Sanctions on Hezbollah

Saturday, 27 October, 2018 - 08:15
A general view of the Lebanese capital Beirut. (AFP)
Beirut - Paula Astih
The new recently announced US sanctions against Hezbollah will not only affect the armed party, but the Lebanese state as a whole.

There are concerns that the reverberations of the sanctions will be felt in the banking sector and economy, which is already strained due the ongoing delay to form a new government. This delay is preventing Lebanon from benefiting from projects that were approved during the April CEDRE conference in Paris.

On Thursday, President Donald Trump signed legislation imposing new sanctions against Hezbollah at a White House event marking the 35th anniversary of the Beirut barracks bombing that killed 241 Marines. The bill expands the list of those who can be sanctioned for doing business with Hezbollah.

White House press secretary Sarah Sanders said in a statement that the sanctions "will further isolate Hezbollah from the international financial system and reduce its funding,” reported CNN.

Economic experts predicted that the sanctions will impact Lebanon’s economy and banks if their repercussions are not contained.

Founder of the JUSTICIABeirutConsult Dr. Paul Morcos said that the new legislation is an advanced version of a 2015 law.

He explained to Asharq Al-Awsat that the legislation does not hold new executive mechanisms as much as it carries a renewed message from the US administration that it will not shy away from imposing new sanctions when the need arises.

“Regardless of the political motive of the legislation, its consequences on Lebanese banks must be contained in regards to protecting its transactions with international banks,” he added.

International banks take this law seriously because it is not limited to transactions in US dollars, but in all currencies, he continued.

In addition, deadlines have been set for the US administration at the end of which it must present Congress with the results of the legislation. This will only ensure that the law is implemented, stated Morcos.

The administration of former President Barack Obama did not set such deadlines or exert pressure to implement the sanctions, he noted.

“The fallout from the legislation must not be underestimated,” he warned. “At the same time, however, it must not be exaggerated.”

The Trump administration had in May imposed new sanctions on Hezbollah senior officials, including Secretary General Hassan Nasrallah and his deputy Naim Qassem.

On October 15, US Attorney General Jeff Sessions designated Hezbollah as one of five groups considered top transnational organized crime threats.

Prominent Shiite Hezbollah critic Ali al-Amin highlighted the dangers of the new sanctions in that they can also target sides that cooperate with Hezbollah.

“This cooperation does not need to be suspicious and could, therefore, target political figures,” he told Asharq Al-Awsat.

Moreover, he noted that dozens of municipalities in southern Lebanon, the eastern Bekaa region and even Beirut, are headed by Hezbollah figures.

“This will consequently lead to major confusion in the implementation of the legislation,” he predicted.

“The question remains whether Washington will use the law to impose certain conditions during the current political climate or whether it will implement it in full,” he said.

Political expert and Hezbollah specialist Qassem Qassir told Asharq Al-Awsat that the party and Iran have recently managed to contain the repercussions of US sanctions.

Hezbollah has since its formation not been connected to the global financial network. It has succeeded in setting up its own network, which means any new sanctions will have little impact on the party, he said.

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