Lebanese Banking Faces US Sanctions for Illicit Services to Iran/Hizballah

The Trump administration tried investing in the Lebanese government and furnishing its army with weapons, in the hope of raising a bulwark in Beirut against a takeover of Lebanon – either by Iran or the Islamic State. Today, Washington realizes it had buried its head in the sand. Beirut banks have long served as a back door for helping Iran beat US sanctions, serving its Revolutionary Guards and Hizballah as a laundering and smuggling outlet.

Lebanese banking, one of the most powerful in the Middle East, was able to claim these transactions were legal by disowning any contacts with the sanctioned entities. However, every intelligence agency in the region knew, DEBKA Weekly’s sources report, that the banks of Beirut kept themselves in the clear quite simply by opening personal accounts for individuals, to conceal the flow of illicit Hizballah and IRGC funds. They never checked their clients’ background and so could pretend innocence of any wrongdoing.

However, when on Monday, Dec. 3, Prime Minister Binyamin Netanyahu met US Secretary Mike Pompeo in Brussels, he handed him a fat file – and the cat was out of the bag. Our sources reveal it contained five red-hot lists:

  1. A list of Iranian and Lebanese “private citizens” with accounts in Lebanese banks who are suspected of being fronts for the IRGC and Hizballah.
  2. Financial transactions in the past six months suspected of being payouts to pro-Iranian Shiite militias serving Tehran in Syria and Iraq, This list uncovered a rich vein of arms and dope smuggling deals as week as funding for various terrorist organizations in the region, a money laundering service for wealthy Shiite families around the world and a back door for beating US sanctions on Iran.
  3. Another list consisted of US weapons supplied to the Lebanese army and passed on to active Hizballah units in Syria and Lebanon in the past two years. The units and types of arms were specified.
  4. A rundown of the tunnels-for-terror and bunkers Hizballah has dug across Lebanon from the Mediterranean coast up to Mt Hermon in the north and under the border into Israel. (See a seperate article on the debate in Israel over the tunnel operation.)
  5. A catalogue of Hizballahl’s violations of UNSC Resolution 1701 (which ended the 2006 HIzballah-Israel war in a truce). These violations are habitually disregarded by UNIFIL although its mission is to monitor compliance.

Pompeo spent three hours studying the five lists and quizzing the prime minister and his companions, Mossad Director Yossie Cohen and National Security Adviser Meir Ben-Shabat, on their content. Then, after conferring with Washington, he announced that the Trump administration had decided to act on the incriminating file and effect a complete reversal of its Lebanon policy. DEBKA Weekly reports that the administration ordered two immediate steps:

  1. a) Support for Israel’s military operation to uncover and disable Hizballah’s cross-border assault tunnels for as long as it takes. The US would defend Israel’s complaint to the Un Security Council.
  2. b) A strong US warning to Lebanese President Michel Aoun to discontinue the ties he and the Lebanese national army maintain with Hizballah, failing which the Trump administration will impose tough sanctions on the Lebanese economy. Specifically –
  • President Aoun must direct Lebanese banks to close the accounts of clients with links to the IRGC and/or Hizballah.
  • Those clients’ names will be added to the files on individuals already under sanction for ties with Iran.
  • US arms aid to the Lebanese army is to be discontinued until such time as proof is provided of new arrangements for preventing them passing into the hands of Hizballah.
  • An ultimatum to UN Secretary General Antonio Guterres: UNIFIL must start dealing with violations of UNSC Res 1701 or else Washington will halt appropriations for its operation, effectively ending its mission.

On Tuesday morning, Dec. 4, Israel launched its operation against the Hizballah tunnels. A few hours later, US Ambassador Elizabeth Richard called on President Aoun and presented him with the a/m ultimatum plus sections of the lists compiled by the Mossad. Adding weight to the ultimatum, the ambassador presented a copy to Nabih Berri, Speaker of Parliament and leader of a Shiite faction in competition with Hizballah. She made sure he understood exactly what the US was demanding.

DEBKA Weekly adds from its sources: The Pompeo-Netanyahu initiative aimed not just at snapping the Lebanese army’s ties with Hizballah, but also at isolating and sequestering the Iranian proxy on Beirut’s political scene.

On Thursday, Dec. 6, the second day of the Israeli operation for disabling the tunnels, Prime Minister Netanyahu invited 25 foreign ambassadors to the northern border for an on-the-spot briefing. This step, the first by an Israeli leader just two days into a military operation, gave him the stage for using the operation for three wide-ranging goals:

  • Hitting at Iran’s military presence in Syria.
  • Degrading Hizballah at home on the political and economic scene of Beirut.
  • Gaining international support in case Israel deemed a military operation inside Lebanon was necessary.
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