TERRORIST FINANCING IN LEBANON UNDER SIEGE

Global media covering the war between Hezbollah and Israel is focusing mainly on the military aspects of the conflict, while those of us in the world of AML/CFT compliance are seeing little or no coverage of the financial side of the situation. Given that one of the participants is a Specially Designated Global Terrorist Organization (SDGT), we are required to have all the information available at our disposal, to discharge our responsibilities, which has become difficult, in what has become more or less a major gap in information from Lebanon. I assume that reporting these facts is not something that the Government of Lebanon wants to become widely known; their prized banking sector, already in dire straits, could implode, losing whatever luster it still has left.

I accurately predicted, back in 2016, that the next Lebanon War involving the 2006 adversaries would directly impact the country's valuable financial sector. The reports which have emerged paint a bleak picture:

(1) Israel has attacked the branches of the principal (US sanctioned) Lebanese bank that directly services Hezbollah, effectively stopping salary payments to rank-and-file street level terrorists.

(2) Many of the owners of the principal Lebanese banks that indirectly provided financial support to Hezbollah have fled the country, fearing that they would be themselves targeted by Israel, and/or be pressured to assist a Hezbollah in desperate need of cash, now that Al-Qard al-Hasan (AQAH), is not operating. Remember that HAMAS looted the Gaza banks when israel invaded that Territory.

(3) There are reports that Israel has warned Lebanon that any aircraft suspected of engaging in bulk cash smuggling operations, and flying into Beirut-Rafic Hariri International Airport from Iran, will not be permitted to land, and will be attacked.

(4) There is a complete and total lack of information regarding which Beirut banks still remain open, due to the attacks launched by Israel into the capital's downtown area. Whether Hezbollah has physically co-opted any financial institutions is unknown, but prudent risk management requires that we assume the worst; take all funds transfer instructions from Lebanon as suspect, and possibly made under duress.

When more relevant information becomes available, we shall update our readers forthwith.