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December 16, 2019 Special Dispatch No. 8416

Anti-Hizbullah Lebanese Daily: The Organization Uses Lebanese Money-Changers To Evade Banking Oversight And American Sanctions

December 16, 2019
Special Dispatch No. 8416

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On December 2, 2019, the Lebanese Al-Modon online daily, known for its opposition to Hizbullah, published an article about the close connection which it claims Hizbullah has established with Lebanese money-changers, so as to evade American sanctions. According to the article, the relationship between the two sides, which began after the war with Israel in 2006, when Hizbullah used money-changers to bring funds into Lebanon from Iran, has become even closer following the toughening of the sanctions imposed on the organization after the election of President Donald Trump. The article also reports that every week an Iranian plane lands at the airport in Beirut and unloads its cargo with no official supervision, and that it is possible that this is another means of transferring money to Hizbullah with no oversight from the banking sector.


The logo of the Lebanese Al-Modon online newspaper.

The following are translated excerpts from the article:

"… According to a well-informed banking source, 'There is a years-long relationship between the money-changers and Hizbullah which has significantly deepened since the imposition of the economic sanctions against it by the local banks. Recently it has become almost impossible to separate between the money-changers and Hizbullah. [For Hizbullah] the money-changers have become an obvious substitute for the banking sector, to ensure liquidity of funds and to transfer money. Their ability to transfer funds is not limited to inside Lebanon but also extends beyond the borders of the country…'"

The source adds that the money-changers Hizbullah uses are not from the "first tier," which are under the supervision of the U.S. Treasury and have no ability "to maneuver," but are rather second- and third-tier money-changers which comprise the bulk of the sector and whose numbers increased considerably in the Dahiya neighborhood in the south of Beirut, a Hizbullah stronghold, following the war in 2006. According to the source, the central bank in Lebanon has no legal jurisdiction over them.

The source stresses that the relationship between Hizbullah and the money-changers began after the war in 2006, and especially when Hizbullah began reconstruction, using money it received from Iran – funds which were not transferred via the banks in Lebanon. When, in 2007, the U.S. Treasury banned the activities of institutions such as Jihad Al-Binaa,[1] Waad Project,[2] and Al-Qard Al-Hassan,[3] all of which played a key role in establishing the organization's financial infrastructure, Hizbullah began to rely increasingly on money-changers. They would receive cash, deposit it gradually, over time, in their bank accounts, and later withdraw it "legally." This situation continued for many years.

Following the election of Trump as U.S. president and the toughening of the sanctions in 2015, combined with the local banks' concern about sanctions, Hizbullah was forced to locate a financial sector which would enable it to deposit and withdraw funds and it turned to shadow banking. Thus it transferred all its financial activity to money-changers, who subsequently enjoyed great profits.

The article also reports that every week an Iranian plane lands at the airport in Beirut and is "occasionally treated as an official security matter which merits special attention," and the source adds that the load control officers, most of whom are Hizbullah supporters, and who move freely among the planes, are the only witnesses. The plane's cargo is unloaded and just a few people are aware of the details. The source claims that this is an additional means of transferring money which is not under the oversight of the banking sector, so that the money-changers obviate the need for Hizbullah to use the banks.[4]

 

 

 


[1] Jihad Al-Binaa is a Hizbullah-owned construction company which has been on the U.S. terror list since 2007. According to the U.S. Treasury, it is funded directly by Iran and is subordinate to Hizbullah's Shura Council, headed by the organization's secretary-general Hassan Nasrallah, Treasury.gov, February 20, 2007.

[2] Waad Project is a Hizbullah-owned construction company which was established after the war with Israel in2006. The U.S. Treasury imposed sanctions on it in 2009, Treasury.gov, June 1, 2009.

[3] Al-Qard Al-Hassan was established in 1982. Its website states that Al-Qard Al-Hassan (AQAH) provides small interest-free loans with convenient terms. According to a 2014 report, the association gave 123,696 loans valued at $276,532, Qardhasan.org, accessed May 2, 2019; the organization is suspected of being a cover for Hizbullah's financial operations, and was designated as terrorist by the U.S. Treasury in July 2007, Treasury.gov/press-center/press-releases/pages/hp503.aspx.

[4] Almodon.com, December 2, 2019.

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