US Treasury official pushes Lebanon to prevent flow of terror funds to Hamas, Hezbollah

US officials say Beirut told of Washington’s ‘specific concerns’ and the need for ‘proactive measures’ to combat movement of money to terror groups

A man holds Palestinian and Hamas flags at a protest near the British embassy in Beirut, Nov. 14, 2023. (AP Photo/Hassan Ammar)
A man holds Palestinian and Hamas flags at a protest near the British embassy in Beirut, Nov. 14, 2023. (AP Photo/Hassan Ammar)

A top US Treasury official visiting Beirut this week pressed Lebanese authorities to prevent funds from being funneled to Hamas by way of Lebanon, and the movement of funds from Iran to Hezbollah.

Jesse Baker, deputy assistant secretary of the Treasury for Asia and the Middle East in the Office of Terrorist Financing and Financial Crimes, met with Lebanese politicians and officials from the financial sector Thursday and Friday, officials said.

His visit came as negotiations for a potential temporary ceasefire between Israel and the Hamas terror group in Gaza appear to have stalled.

Should the war continue during the Muslim holy month of Ramadan, which could begin late Sunday, many fear a regional escalation, including potentially in Lebanon.

Following the October 7 terror onslaught that triggered the Israel-Hamas war, Hezbollah-led forces have attacked Israeli communities and military posts along the border on a near-daily basis, with the group saying it is doing so to support Gaza amid the war there.

A US Treasury official who spoke on condition of anonymity to discuss sensitive matters said Baker had shared with Lebanese authorities “specific concerns” about “the movement of Hamas funds through Lebanon, Hezbollah funds from Iran into Lebanon and then out into other regional areas” and called for “proactive measures” to combat it.

Hezbollah fighters chant slogans as they attend the funeral procession of senior Hezbollah commander Wissam Tawil, during his funeral procession in the village of Khirbet Selm, south Lebanon, Jan. 9, 2024. (AP Photo/Hussein Malla)

The US official said that the terror groups need the flow of funds to pay their fighters and conduct military operations and cannot achieve their aims otherwise.

The Treasury official added that, for Lebanon, showing compliance with global anti-money laundering and counterterrorism financing standards is key to attracting investment from the US and the rest of the world and to pulling the country out of its protracted crisis.

Baker pushed for Lebanon to crack down on the large sector of illicit financial service companies that have flourished amid the collapse of the country’s formal banking system over four years of economic crisis, including illegal money exchange and unlicensed money transfer operations, the Treasury official said.

Those businesses — along with a cash economy that the World Bank has estimated amounts to nearly 46 percent of Lebanon’s GDP — have offered workarounds for people and groups barred from the formal financial system by US sanctions, including Hamas and Hezbollah.

A man counts Lebanese pounds at an exchange shop, in Beirut, Lebanon, Aug. 20, 2018. (AP Photo/Hussein Malla, File)

Walid Kilani, a spokesperson for Hamas in Lebanon, said he had “no information” about the matter.

Halim Berti, spokesperson for Lebanon’s central bank, confirmed that officials with the institution had met with Baker and described the meetings as “very positive.”

He said that the central bank is doing its part to regulate licensed financial services businesses, but that those operating without a license are “not in our jurisdiction” and should be dealt with by law enforcement.

On Wednesday, Defense Minister Yoav Gallant told US special envoy Amos Hochstein that Hezbollah’s continued attacks on Israel were bringing the country closer to a decision regarding military action in Lebanon.

On Friday, a Lebanese newspaper linked to Hezbollah claimed that Israel had set a March 15 deadline for a diplomatic deal pushing the terror group from southern Lebanon, after which it is prepared to escalate the ongoing border skirmishes into a war.

Al-Akhbar quoted Western officials saying that Hochstein did not believe the fighting along the border could be halted before a deal is reached for a truce in Gaza.

US envoy Amos Hochstein, left, meets with Defense Minister Yoav Gallant in Tel Aviv on March 5, 2024. (Shachar Yurman/Defense Ministry)

The Lebanese news outlet also claimed the US thinks a diplomatic settlement between Beirut and Jerusalem would have to include a solution to the border disputes, in particular in the Mount Dov area, known in Lebanon as the Shebaa Farms, and the deployment of Lebanon’s army to the south.

But military officials were quoted by Channel 13 as denying the report.

“There’s no date for going to war in Lebanon,” an unnamed source told the network.

Since October 8, the skirmishes on the border have resulted in seven civilian deaths on the Israeli side, as well as the deaths of ten IDF soldiers and reservists. There have also been several attacks from Syria, without any injuries. Hezbollah has named 235 members who have been killed by Israel during the ongoing skirmishes, mostly in Lebanon, but some also in Syria.

In Lebanon, another 37 operatives from other terror groups, a Lebanese soldier, and at least 30 civilians, three of whom were journalists, have been killed.

Emanuel Fabian contributed to this report.

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