US says Hezbollah working to destroy Lebanon’s banking system, more sanctions coming

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Hezbollah is working to destroy Lebanon’s banking system while carrying out its money laundering and drug trafficking activities, a senior US official said Tuesday.

“What Hezbollah is doing is a complete threat to Lebanon ... when Lebanon cannot afford any other crisis, in addition to the financial crisis,” it is currently in, US Assistant Secretary of State for Near East Affairs David Schenker said.

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Schenker, speaking to the Lebanese website Al-Hadeel, said that a new batch of sanctions would be announced to target both Hezbollah and its allies.

“Yes, there will be sanctions … related to combating Hezbollah’s activities,” the US diplomat said. He noted that these sanctions might fall under the Global Magnitsky Act, a US law meant to sanction those who take part in corruption or human rights violations.

Hezbollah has long been accused of money laundering using various methods, including drug trafficking. It is also widely believed that the Iranian-backed group uses the Port of Beirut for smuggling routes in and out of Lebanon.

Asked what the US response would be to a war between the militia and Israel, Schenker said that Hezbollah was a terrorist organization and that “it always carries out actions that might lead to conflict.” Schenker added that Tel Aviv has the right to defend itself.

Turning to the relationship between Washington and the current Lebanese government, made up of Hezbollah and its allies, Schenker said it needed to make difficult decisions and implement reforms to unlock aid from the international community.

But he said Hezbollah does not seek reform, and it “lives on corruption.”

Prime Minister Hassan Diab’s government has been in office for over 100 days. Still, it has yet to implement the requested reforms from the international community and the International Monetary Fund, which Lebanon is in talks with.

Last week Hezbollah’s secretary-general, Hasan Nasrallah, called for Lebanon to look to China and Iran for help after he accused Washington of preventing US dollars from reaching the Lebanese market.

Schenker warned against falling into this “trap,” citing the lack of Iranian and Chinese aid to Lebanon during the most recent coronavirus pandemic.

He also denied Nasrallah’s allegations that the US was not allowing US dollars into Lebanon.

According to Schenker, one of the main reasons for the current economic and financial crisis in Lebanon is Hezbollah’s smuggling of dollars to Syria and Hezbollah’s tax evasion.

As for China, Schenker noted Sri Lanka, in 2017, and its inability to pay its debt to China. As Schenker said, Beijing forced Sri Lanka to hand over a lease to its port for 99 years.

Nevertheless, Schenker said Washington would continue to provide aid to the Lebanese Army, which relies almost solely on American assistance.

Read more: New US sanctions set to hit Syria likely to have knock-on effect in Lebanon

Lebanon arrests activist who Hezbollah supporters accuse of spying for Israel

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