For first time, Lebanon names Al-Qard Al-Hasan in official banking ban—the details

Report by Lara El Hachem, English adaptation by Mariella Succar

For the first time, Lebanon’s central bank has issued a circular explicitly naming the Hezbollah-linked Al-Qard Al-Hasan Association, prohibiting banks and financial institutions from dealing with it.

While the U.S. Treasury Department has long sanctioned individuals connected to Hezbollah and Al-Qard Al-Hasan—most recently in early July—this is the first official directive from Lebanese authorities directly targeting the group by name. 

Legal sources at the central bank told local media the move marks a shift from previous circulars, which had only warned against dealing with unlicensed financial institutions in general terms.

According to those sources, the circular aims to protect the banking sector from potential sanctions and send a clear message that Lebanon is serious about combating money laundering. Al-Qard Al-Hasan has been on the U.S. sanctions list since 2007.

The directive comes amid growing concern over the vulnerability of Lebanese banks to international scrutiny. 

For example, if a customer receives a cash loan from Al-Qard Al-Hasan and uses it to purchase a car, the transaction might initially appear routine. 

However, if the car dealer deposits the funds into a bank and authorities trace the source to Al-Qard Al-Hasan, both the individual and the bank could face serious consequences, including the risk of losing access to correspondent banking services.

The loss of correspondent relationships would effectively isolate Lebanese banks from the global financial system, halting money transfers and international trade. 

Only two correspondent banks still deal with Lebanon, largely due to concerns over the country's inclusion on the Financial Action Task Force’s "gray list" for insufficient compliance with anti-money laundering and counter-terrorism financing standards.

Financial and banking experts say the latest circular came as no surprise, as most Lebanese banks had already ceased dealings with Al-Qard Al-Hasan to avoid risk. 

However, the directive serves as a renewed warning to remain vigilant, especially as Lebanon continues to draw international scrutiny.