Hezbollah, the Lebanese militia and political party, is now the most powerful actor in Lebanon. Since 2006, Hezbollah’s last declared conflict with Israel, the group has amassed military hardware to rival that of a formal standing army and evolved into Lebanon’s most important political power broker. For those who view Hezbollah as a destabilizing force, with links both to terrorism and to Iran, the question is how best to counter this rise.
In the United States, Congress has taken the debate up in earnest. There are those who wonder whether it is still in the U.S. interest to fund the Lebanese Armed Forces (LAF), traditionally seen as a check on Hezbollah, given the latter’s dominance of Lebanon’s financial, military, and political affairs. But cutting off Lebanon means ceding it to Iran—a grave diplomatic and tactical error. Instead, the House Foreign Affairs Committee will soon mark up the Hezbollah International Financing Prevention Amendments Act (HIFPAA). This bill will include a range of new sanctions designed to punish Hezbollah for links to international terrorism and target the group’s domestic financial activity. However, HIFPAA may not go far enough. To undercut Hezbollah’s rise and strengthen those in Lebanon aligned with U.S. interests, Congress should call on the White House to designate Hezbollah-controlled regions as areas of “primary money laundering concern” under Section 311 of the USA Patriot Act.
This novel and decisive step would isolate financial entities operating in territories that fall under Hezbollah control—including South Lebanon, Beqaa Valley, and the Beirut suburb of Dahiyeh—by barring correspondent banking relationships between them and any institution using the U.S. financial system. The broad-based nature of a Section 311 designation makes it more potent than the targeted sanctions included in the current HIFPAA bill. Moreover, by specifically and exclusively applying Section 311 to areas of Lebanon under Hezbollah control, the United States would signal its support for elements in the state that have withstood Hezbollah’s efforts to take over.
The idea of using Section 311 to sanction a substate geographic area is new, but it is entirely defensible. Section 311 has been used to sanction states on five occasions: Nauru and Ukraine in 2002, Burma in 2003, Iran in 2011, and North Korea in 2016. Although it has not been used to sanction substate geographies, the language of its drafting authorizes the Treasury to select a “jurisdiction” to target. The Patriot Act leaves that term’s definition open. Alternatively, Section 311 authorizes the sanction of specified financial institutions, classes of transactions, or types of accounts, including presumably all those located within a specified geographic area. Using Section 311 to target Hezbollah-controlled areas for sanctions thus violates neither the letter nor the spirit of the Patriot Act.
Some will argue, with reason, that the economic and political fallout associated with this action could be great. For example, both the Lebanese prime minister and president have expressed skepticism about the need for new sanctions, with the president stating that new sanctions may cause “great damage to Lebanon and its people.” To be sure, applying Section 311 to Hezbollah-controlled areas will blacklist large numbers of businesses and banks, in primarily Shiite areas. That could prompt panic among the Lebanese population, the LAF, and the banking community. But the fallout can be contained and the unintended consequences mitigated. The Treasury should work with the Lebanese central bank to isolate bank branches in Hezbollah-controlled areas, thereby protecting the integrity of the mainstream Lebanese banking system while crippling Hezbollah’s financial capabilities. The Lebanese central bank already prioritizes access to the international financial system, and it has closed Hezbollah-linked accounts in the past. With the cooperation of the U.S. Treasury, Section 311 could indeed be targeted at Hezbollah, not the Lebanese economy more generally.
The United States must take urgent and strong steps if it is to shore up those elements in Lebanon that have resisted the rise of Hezbollah, a violent group with terrorist ties and close links to Iran, America’s most resolute antagonist in the region. Otherwise, Hezbollah and its supporters may continue their steady rise unchecked. The battle for the future of Lebanon is under way; it is now up to Congress to effectively join in.
Jonathan Schanzer is senior vice president at Foundation for Defense of Democracies, where Orde Kittrie is a senior fellow, and Alex Entz is a research analyst for the Center on Sanctions and Illicit Finance. Follow Jonathan on Twitter @JSchanzer. Follow Orde on Twitter @ordefk.
Follow the Foundation for Defense of Democracies on Twitter @FDD.