The Lebanese Government Tightens Financial Pressure on Hezbollah by Banning Dealings with Al-Qard Al-Hassan

Lebanon’s central bank announced Tuesday a ban on all licensed financial institutions from engaging in any direct or indirect transactions with “Al-Qard Al-Hassan,” an entity affiliated with the Iran-backed Hezbollah group, signaling a significant blow to the group’s financial influence following recent military setbacks against Israel.

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The move, reportedly in preparation for months, reflects U.S. pressure on the Lebanese government to crack down on Hezbollah’s financial arm. It aims to close regulatory loopholes that may allow illicit financial activity. “Al-Qard Al-Hassan” has long been accused of money laundering and acting as a funding channel for Hezbollah.

This step is seen as a response to international—especially American—pressure, given that the U.S. Treasury sanctioned the organization in 2007 for allegedly facilitating Hezbollah’s access to the international financial system.

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Nassib Ghobril, chief economist at Byblos Bank, explained that Lebanese banks had already been avoiding contact with the organization due to U.S. sanctions. He added, “What matters is that authorities are finally addressing Lebanon’s shadow economy, which is the real issue,” and criticized the government’s prolonged inaction on the harmful effects of this unregulated financial network.

Although Hezbollah relies on its own independent financial networks, the decision is expected to constrain parts of its informal financing, especially those involving any interaction with formal financial institutions. The ban will significantly limit “Al-Qard Al-Hassan’s” ability to access the Lebanese banking system, affecting fund management and transfers.

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In June, the European Commission added Lebanon to its updated list of high-risk jurisdictions for strategic deficiencies in anti-money laundering and counter-terrorism financing. The Financial Action Task Force (FATF) had already placed Lebanon on its grey list in 2023.

Despite Hezbollah’s strong political and military presence, the group failed to enforce its political will during the post-war government formation process in February.

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Founded in 1983, “Al-Qard Al-Hassan” presents itself as a charitable organization offering interest-free, Sharia-compliant loans. It operates under a government-issued license and manages over 30 branches, mainly in Shiite-majority areas of Beirut, southern Lebanon, and the Bekaa Valley.

In a related field development, Israel carried out some of its most intense airstrikes since the November ceasefire on Tuesday, targeting training camps and weapons depots in eastern Lebanon. A Lebanese security source reported that 12 individuals were killed, including five Hezbollah fighters.

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