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Hezbollah strives for financial rehabilitation

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One of the biggest tasks that the new Lebanese President, Joseph Aoun, will face will be to cut off the flow of cash from Iran to Hezbollah, which constitutes the source of 90% of the Shiite terrorist organization’s budget, and according to what Lebanese Military Intelligence reported, is close to $1 billion annually. The rest comes from illegal activities such as cocaine smuggling, or from charities run by Hezbollah.

The base of Hezbollah’s financial activity was and remains, despite the Israeli attacks during the war, the Al-Qard Al-Hassan Banking Association. The financial institution, which is not linked to the SWIFT system, operates about 30 branches in Shiite population centers, about half of which are in Beirut. The association offers clients three types of accounts: basic, donation account for the wealthy, and social cooperation fund. The organization, which effectively acts as a bank, provides interest-free loans in exchange for collateral ranging from gold to third-party guarantees.

According to the Foundation for Defense of Democracies (FDD), a US think tank focusing on foreign policy and national security, the amount of loans provided by Qard al-Hassan rose from about $76.5 million in 2007, the year after the Second Lebanon War. war, to about $480 million in 2019. The total volume of activity from the network from its opening in 1983 until 2019 is estimated at about $3.5 billion. The use of the US dollar is intentional because it ensures protection against the erosion of the Lebanese pound and perpetuates a situation in which Hezbollah operatives receive salaries ten times higher than the salaries of soldiers in the Lebanese army.

The pursuit of money

The main challenge facing Qard Hassan is that its activities depend on cash. Hezbollah has been hard hit both from the actual damage it suffered in Lebanon and from the fall of the Assad regime, which allowed Iran to make Syria a center for the flow of money to Hezbollah. The Israeli Defense Ministry acknowledges that Hezbollah adopted two methods of obtaining funds that were less important until the war: managing large projects in areas such as supermarkets and construction development, as part of a long-term strategy to increase economic “independence.” Iranian diplomats arriving at Beirut airport with bags full of cash.

According to a report by the Lebanese Al-Jadeed channel, local security forces arrested an Iranian diplomat at Beirut airport a week and a half ago, in a rare incident, to inspect his luggage. This step comes in addition to the long-standing activity of intelligence and Mossad against Al-Qard Al-Hassan, which used special accounts in banks that allowed the use of SWIFT for transfers, withdrawals, and then deposits with the help of Al-Qard Al-Hassan. The organization’s employees are in its reserves. This surveillance led to the imposition of US sanctions, almost completely stifling Hezbollah’s connection to the international clearing system “SWIFT”.







Senior Hezbollah figures who survived are already developing rehabilitation plans with the help of Qard Hassan. According to a report by Asharq Al-Awsat, Hezbollah allocated about one billion dollars to help Shiite families affected by the war, with each of them receiving 12 thousand dollars, which is a large amount in Lebanese terms. This is partly because the Shiite community has opened its doors to Hezbollah’s terrorist activity, including converting rooms into launching pads or weapons depots.

Despite the challenges, the IDF expects that due to the large cash reserves with which Hezbollah entered the war, the terrorist organization could operate without regular cash supplies for several more months. The time period will be affected by the increase in Hezbollah’s expenses, with the addition of reconstruction needs. So far, no country has volunteered to provide reconstruction funds. Lebanon has already issued construction tenders, and in the absence of major international players, those who have won these projects are companies linked to Hezbollah. The proliferation of projects led by such companies as part of reconstruction plans would deepen the grip of the terrorist organization and Iran — rather than alienate them, but Washington has yet to act on the issue.

Türkiye enters the battle

The final player to become more central in the fight against Hezbollah is Turkey, although the Nagel Commission recently warned that Israel and Ankara may find themselves on a collision course.

In one of the Israeli attacks on Hezbollah’s financial targets, an exchange branch in Lebanon was attacked – and the security establishment is well aware that if it finds a branch, there are many more. Therefore, Israel is working to prove that currency exchange in Lebanon is linked to Hezbollah activity, and to impose US sanctions on those institutions.

Published by Globes, Israel Business News – en.globes.co.il – on January 14, 2025.

© Copyright Globes Publisher Itonut (1983) Ltd., 2025.


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