BEIRUT: The US congress is preparing to amend the Hezbollah Financing Prevention Act (HIFPA) of 2015, in the latest attempt to tighten the noose on the Iranian-backed Lebanese group as part of a broader strategy targeting Tehran and its regional proxies under President Donald Trump’s administration, a US-based source told Annahar.
While some reports in Beirut indicate that the Hezbollah Financing Prevention Amendments Act of 2017 will be passed by Congress soon, the source said discussions over the new bill are gaining momentum but it “may take several months” before amendments are ratified and the law goes into effect.
The amendments expand the list of entities that may face sanctions for providing support for Hezbollah and significantly bolsters reporting on the financial activities of the party’s affiliated entities and even political allies.
According to a draft copy of the 2017 act obtained by Annahar, HIFPA will be amended to include new entities in regular reports to be issued by the secretary of the treasury on the estimated net worth of Hezbollah members. The report, which describes “how funds of each individual were acquired and how such funds have been used or employed,” will add members of Lebanese Parliament Speaker Nabih Berri’s Amal Movement and “other associated entities that the Secretary determines to be appropriate.”
In addition to keeping a close eye on Hezbollah’s finances, the new act expands sanctions beyond foreign central banks and financial institutions. These include “any agency and instrumentality of a foreign state” that has “knowingly and materially assisted, sponsored, or provided significant financial material, or technological support for, goods or services to or in support of, or arms or related material to, Hezbollah or an entity owned or controlled by Hezbollah; or has acted or purported to act for or on behalf of Hezbollah.”
These amendments leave much room for speculation over who could be the target of US sanctions, according to a senior Lebanese banker, who stressed that Lebanese entities “should not jump to conclusions” about who falls under these news designations.
The banker, who spoke to Annahar on condition of anonymity, said Lebanese institutions should seek clarifications on these “intentionally vague” amendments and consequently assume that entities subject to sanctions are only those clearly identified by US authorities.
Otherwise, Lebanon risks renewed tensions between Lebanese corporations and financial institutions, on the one hand, and Hezbollah, on the other, if and once these expanded sanctions are ratified, the source said.
Tensions over US sanctions first surfaced in January 2016 when reports emerged that banks were preparing to close hundreds of Hezbollah-related accounts in compliance with US sanctions. The reports followed the closure of about 100 accounts held by individuals that had featured on the list of the Office of Foreign Assets Control (OFAC) in compliance with HIFPA.
The move prompted Hezbollah to lash out at Central Bank Governor Riad Salameh, saying his “position was ambiguous and suspicious and it demonstrates that the state's monetary policy is no longer subject to the norms of national sovereignty."
The headquarters of BLOM bank, one of the country's largest banks, was also the target of a calculated bombing that left no human casualties. BLOM was then at the heart of a criticism campaign by some pro-Hezbollah figures for taking a hardline position on the need to abide by US sanctions.
In a bid to defuse tensions, Lebanon’s central bank issued a circular prohibiting banks from freezing accounts suspected of having links to Hezbollah without the prior approval of the Special Investigation Commission except when it comes to accounts held by individuals listed by OFAC.
In case no response came from the commission in 30 days, then banks and financial institutions can take the appropriate actions on these accounts, the circular said.
Salameh had warned that the failure to comply with HIFPA could isolate Lebanese banks from international markets by compromising the relation between Lebanese financial institutions and their correspondent banks in the U.S.
“Correspondent banks may resort to de-risking policies, which in turn will isolate our banking sector from the rest of the world, while the financing of Lebanon relies primarily on expatriates’ and nonresidents’ transfers, and while residents need global and continuous international banking relations to fund their imports and exports and the needs of individuals and households,” he said last year.
The draft of the 2017 act also threatens sanctions against any person that “assists, sponsors, or provides financial, material, or technological support” for al-Manar TV, al Nour Radio, the Lebanese Media Group, Bayt al-Mal, Jihad al-Bina or a foreign person determined by the U.S. President to be engaged in fundraising or recruitment including indoctrination activities for Hezbollah. The 2015 act only named Al-Manar TV.
Other amendments to the 2015 act make officers and employees of foreign governments eligible, in certain circumstances, to receive rewards under the Department of State Rewards Program for furnishing information related to Hezbollah.
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