Diverging narratives surround Lebanon’s handling of Hezbollah-linked financial activity

Report by Bassam Abou Zeid, English adaptation by Karine Keuchkerian

Washington’s dissatisfaction with Lebanon is not limited to the Lebanese authorities. The International Monetary Fund (IMF), donor countries, and Gulf states also share concerns.

The issue is not new, but it is back in focus amid a new development involving the government and Hezbollah’s financing, bringing renewed attention to what happened on April 30.

The story begins with the war, or rather, the two wars being waged against Hezbollah.

The first is a military campaign being carried out directly by Israel, with U.S. backing, aimed at weakening the group’s capabilities.

The second is a financial campaign being led directly by the United States, with the goal of cutting off Hezbollah’s funding.

As part of that financial campaign, the U.S. Treasury Department has stepped back in.

It asked Lebanon’s central bank to ban Hezbollah’s financial activities, implicitly meaning the suspension of operations by the Al-Qard Al-Hasan Association and Joud Foundation, a move that would help address Lebanon’s status on the Financial Action Task Force (FATF) grey list and prevent it from slipping onto the blacklist.

The message was received, but as is often the case in Lebanon, there were two interpretations: one by the central bank and another by the government.

Sources at the central bank indicate that a committee has been formed, comprising Deputy Prime Minister Tarek Mitri, Finance Minister Yassine Jaber, and central bank Governor Karim Souaid. The committee drafted a decision banning the operations of any association or company engaged in what is known as “para-banking” activities without a license. The draft did not specifically mention either the Al-Qard Al-Hasan Association or the Joud Foundation. 

According to those sources, Souaid brought the draft to the government on April 30 for discussion, but the session ended without any debate.

That is the account provided by central bank sources. Government sources, however, offer a different version.

They say Souaid did not present a decision, but rather a report outlining the risks of allowing such associations to continue operating, and that he did not request discussion of the matter.

Between the two accounts, the outcome is the same. Once again, no decisive action was taken. And, as usual, the truth remains elusive, because in Lebanon, no one seems able to find it.