Crackdown on Hezbollah accounts raises tensions in Lebanon
A bank crackdown on hundreds of accounts linked with Hezbollah is raising tensions in Lebanon, where the powerful Shiite movement enjoys fierce support and provides a range of social services.
The move follows the adoption late last year of a US law imposing sanctions on financial institutions that facilitate significant transactions associated with Hezbollah, a heavily armed, Iran-backed movement which Washington classifies as a "terrorist group".
Lebanese banks -- keen to maintain the country's role as a regional financial hub -- have been working to comply with the law since May.
But Hezbollah, which acts in many ways as a parallel government in parts of Lebanon, has warned that it considers the account closures an "attack" on its supporters.
On June 12, an explosion hit the Beirut headquarters of one of the country's largest banks, leaving one person with minor injuries.
Hezbollah was not linked directly to the blast, but several Lebanese newspapers said the attack was intended as a message to the banking industry.
"Hezbollah is angry because the pressure is hitting its popular base and the responsibility will fall on the group's own shoulders," said Lebanese economics expert Ghazi Wazni.
Under the US Hezbollah International Financing Prevention Act passed in December, sanctions can be avoided if a bank "has taken and is continuing to take significant verifiable steps" towards ending the financial activities.
Hundreds of accounts shut
Hezbollah runs an extensive social services network in Lebanon -- complete with schools, hospitals and a wide range of charity organisations.
Pro-Hezbollah daily newspaper Al-Akhbar reported in early June that in response to the law "hundreds, if not thousands" of accounts held by several major charities and hospitals "directly affiliated with Hezbollah" had been shut.
Wazni said if the banks pursue their "hardline" approach towards Hezbollah-linked accounts, some 10,000 accounts could be shut down.
Following the June bombing, the Association of Lebanese Banks held an emergency meeting and warned that the blast threatened to "rattle economic stability".
Contacted by AFP, the association's secretary general Makram Sader would not elaborate on how accounts were being shut, saying only that banks "follow decrees issued by the Central Bank and the implementation mechanisms decided by monitoring bodies."
Hezbollah chief Hassan Nasrallah railed against the account closures in a speech last month, saying he considered them an "attack... against our people, our constituency, and our families."
He also downplayed the potential consequences, saying: "As long as Iran has money, we have money."
"Just as we receive the rockets that we use to threaten Israel, we are receiving our money. No law will prevent us from receiving it," Nasrallah said.
Steps have been taken to ease tensions.
Hassan Moukalled, the editor-in-chief of Construction & Economy magazine, said he had acted as an intermediary in indirect negotiations between the Central Bank and Hezbollah.
The Central Bank has now requested that some accounts belonging to Hezbollah-affiliated parliamentarians be reopened, Moukalled said, on the basis that they receive regular government salaries.
"If there is regular account activity within a certain margin, where between $5,000 and $10,000 is deposited on a regular basis, there is no problem. But if all of a sudden $50,000 enters that account, it will be investigated," he said.
Moukalled said the moves by the banks were likely to have more effect on those loosely affiliated with the Hezbollah than on the movement itself.
Hezbollah's "budget doesn't run through the formal banking mechanism -- it's like a war economy," he said.
But Wazni said the account closures would still put pressure on Hezbollah.
"It will have to bear responsibility for the closing of accounts of people who may be just the sons or brothers of Hezbollah officials, as well as accounts held by charities, and the effect this will have on employees," he said.
One employee at a Hezbollah-owned institution, speaking on condition of anonymity, told AFP that staff "began receiving their salaries in cash about four months ago, while before we used to get paid in cheques that we could cash at the bank."
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