Exclusive – Will New US Sanctions Target Hezbollah’s Top Lebanese Allies?

“I am not the one who decides US sanctions against Hezbollah. The US administration is clear in how to handle this issue.”

This is how Lebanese Prime Minister Saad Hariri responded to all criticism against his recent visit to the United States. The criticism was mainly from Free Patriotic Movement MPs and their allies over the premier’s talks with American officials who are perceived as spearheading sanctions against Hezbollah. Most notable of those officials are Secretary of State Mike Pompeo and Assistant Secretary for Terrorist Financing in the United States Department of the Treasury Marshall Billingslea.

Former Lebanese Ambassador to Washington Antoine Chedid told Asharq Al-Awsat that Hariri’s visit was significant given the meetings he held with various officials, specifically Pompeo and senior Treasury officials and World Bank President David Malpass.

The visit was deemed a success, said Chedid, after Pompeo stressed the need to preserve the stability of Lebanon’s economic and security institutions despite his clear objectives to impose sanctions against Hezbollah. The official’s remarks reveal that Hariri “succeeded in separating the Lebanese state, its security and political institutions, and the banking sector from Hezbollah. This is no easy feat.”

The former envoy added that US sanctions against Iran and Hezbollah are being discussed on a daily basis by the Washington administration and they are not swayed by opinions or dictates.

Close allies

It is also no secret in Lebanon that new sanctions could target top allies to Hezbollah. A senior banking official told Asharq Al-Awsat that the US Treasury may sanction FPM members. He added, however that this is yet to be confirmed. He also said Billingslea has accused FPM chief and Lebanese Foreign Minister Jebran Bassil of exploiting his position to protect Hezbollah.

Moreover, the US official expressed concern that Lebanese banks may shirk their obligations to comply with the sanctions, especially those located in areas where Hezbollah wields influence.

Repercussions of sanctions

Economic researcher and strategist, Professor Jassem Ajaka that speculation has been rife about the new wave of sanctions, but it is “certain” that they will include top Lebanese officials who are Hezbollah members and their allies. They will also target businessmen, whom Washington believes hold the keys to the party’s financial dealings.

This will pave the way to two scenarios, said Ajaka.

The first sees senior politicians being targeted. An American administration official had previously said that politicians in Lebanon hold the vast majority of the country’s wealth, so in order to impose any policy change, one must slap sanctions on them. Indeed, Washington had taken a step in that direction by blacklisting earlier this year two lawmakers. Lebanon will be confronted with a major hurdle, however, when the US blacklists a minister, making it impossible for the government to work with him.

Officials in Washington themselves are conflicted over whether to take this route, said Ajaka. Sanctioning top Lebanese figures will escalate the confrontation between Beirut and Washington. It also undermines the significance the US has placed on Lebanon in its Middle East strategy. Some American officials speculate that senior Lebanese politicians are deliberately escalating their rhetoric to force Washington into a confrontation, which is why Ajaka ruled out this scenario at the moment.

The second scenario, he remarked, sees imposing sanctions on lower ranked politicians or figures who work in the shadows and who are members of Hezbollah and its allied parties. These figures control the finances of their parties. According to the American view, this strategy targets Hezbollah’s allies more than the party itself with the aim of driving a wedge between them.

The economic and financial impact will be the same in either scenario, remarked Ajaka. They will both hamper the financing of the CEDRE pledges. They may not find any financers at all if the US believes that these parties would benefit from them. Washington could choose to pressure the dollar bonds market, which in turn will lead to popular disgruntlement against these parties and consequently affect the results of the next parliamentary elections.

It appears that Lebanon is heading towards financial and economic ruin, should the US so decide, transforming it into another Iran, Syria or Venezuela.

Hariri visited the US after obtaining information that dozens of Lebanese officials will be targeted by sanctions. The premier is concerned that ministers in his cabinet may be among them, which may lead to the collapse of the government. It appears, however, that the Americans have given him “temporary” assurances that this will not take place.