Israel Is Taking Aim at Hezbollah’s Banking Sector. The U.S. Should Follow Suit.

The ongoing war against Iran’s clerical regime isn’t confined to the skies above Tehran — at least not for Israel.

On March 2, the Israel Defense Forces attacked 18 branches of Al-Qard al-Hassan (AQAH), which serves as one of the main banks in Lebanon for Hezbollah, Iran’s Lebanese proxy. AQAH is not a regulated financial institution in Lebanon, contributing to the country’s  shadow financial services sector. Estimates suggest AQAH handles approximately $3 billion in financial activity, potentially amounting to 10 percent of Lebanon’s GDP.

This is not the first time Israel has targeted AQAH facilities. Israeli jets struck nearly 30 of AQAH’s branches in June 2024. AQAH had already been sanctioned by the U.S. Treasury Department back in 2007 for assisting Hezbollah to “gain access to the international financial system.” Treasury took subsequent action against AQAH in 2021, 2025, and, most recently in February 2026.

Targeting Hezbollah Will Strengthen Lebanon’s Financial Credibility

For years, Western officials have warned of AQAH’s destabilizing role in Lebanon’s fragile economy. Recognizing this, Lebanon’s central bank took a major corrective action against AQAH in July 2025 by banning Lebanese financial institutions from dealing with unregistered financial institutions, including AQAH. Nevertheless, AQAH continues to operate within Lebanon.

On the same day as Israel’s latest strikes on AQAH, Lebanese Prime Minister Nawaf Salam declared Hezbollah’s military and security activities illegal. The following week, Lebanon’s cabinet banned Iran’s Islamic Revolutionary Guard Corps (IRGC) from operating in Lebanese territory, ordering the arrest and deportation of any IRGC members found operating in the country. These policy shifts have yet to materially shift IRGC activity in Lebanon.

Lebanon was added to the intergovernmental Financial Action Task Force’s “grey list” of countries under increased monitoring in October 2024 due to its persistent and widespread money laundering and illicit finance challenges. Taking action against AQAH will help assure international lending bodies that the country is taking this problem seriously.

AQAH’s Activities Stretch Beyond Lebanon

The impact of AQAH’s illicit activity is not limited to Lebanon. AQAH collects deposits, fees, and most importantly, gold as collateral. Gold has long been viewed as a source of pronounced illicit finance risk as it is easy to both transport and convert to cash quickly. Additionally, unlike cash, gold cannot be easily destroyed. It can be salvaged in the wake of a bombing campaign — and that is exactly what Hezbollah has done in the past, moving gold from AQAH facilities in 2024 to at least one bunker located beneath a Beirut hospital.

Treasury took action against an AQAH-directed gold smuggling network in February 2026, identifying the Lebanese-based gold exchange company Jood SARL as responsible for “convert[ing] Hizballah’s gold reserves into usable funds that sustain the terrorist group’s reconstitution.” The price of gold skyrocketed in 2025 by more than 64 percent, with estimates suggesting the price could go even higher in 2026. This provides a potential windfall opportunity for Hezbollah and other players in the global illicit gold sector.

U.S. Treasury Should Target AQAH’s Enablers

AQAH doesn’t act alone. Middle East and Africa Bank (MEAB), one of Lebanon’s largest banks by deposits, stands accused by families of American Hezbollah terror victims of moving tens of millions of dollars through U.S. correspondent accounts on Hezbollah’s behalf. Leaked documents appear to support this claim.

Meanwhile, MEAB’s founder, Kassem Hejeij, was sanctioned by the United States in 2015 for supporting Hezbollah. While his son took over as chairman days later, Kassem reportedly boasted in 2017 that the leadership switch “changes nothing because me and my son are one.” He reportedly maintained an office at the bank for several years afterwards.

Additionally, the Federal Deposit Insurance Corporation (FDIC) penalized a Kansas-based bank for compliance failures in December 2024, with publicly available evidence strongly suggesting that “Customer E” in the FDIC action was MEAB. That would mean a U.S. bank may have allowed one of Hezbollah’s key financial vehicles to move hundreds of millions of dollars through the U.S. financial system.

Treasury should therefore consider sanctioning both MEAB and its current chairman, Ali Hejeij, for supporting Hezbollah and, specifically, AQAH.

Max Meizlish is a research fellow for the Center on Economic and Financial Power (CEFP) at the Foundation for Defense of Democracies (FDD). For more analysis from Max and CEFP, please subscribe HERE. Follow Max on X @maxmeizlish. Follow FDD on X @FDD and @FDD_CEFP. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.