What is the Hezbollah-linked financial institution Israel is targeting
in Lebanon?
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[October 22, 2024] By
BASSEM MROUE
BEIRUT (AP) — The Israeli military has carried out a wave of airstrikes
targeting branches of a financial institution affiliated with Lebanon’s
Hezbollah, saying the quasi-banking system is being used to fund the
militant group's military wing.
The strikes destroyed more than a dozen branches of al-Qard al-Hasan
across Lebanon Sunday night, and came two weeks after an airstrike
killed the man who many referred to as Hezbollah’s “finance minister.”
After assassinating most of Hezbollah’s top political and military
commanders, including the group’s longtime leader Sayyed Hassan
Nasrallah, and pummeling its communities with devastating airstrikes,
Israel says it is now going after the Shiite group’s funders and
financial institutions in an attempt to further disrupt it and its base
of support.
Hezbollah started attacking Israeli military posts along the border with
Lebanon a day after the Oct. 7, 2023, attack by Hamas on southern Israel
that killed some 1,200 people and took about 250 hostage. Hezbollah said
that by launching attacks along the Lebanon-Israel border it was backing
up its Hamas allies in the Gaza Strip.
What is al-Qard al-Hasan and who benefits from it?
Al-Qard al-Hasan is officially a non-profit charity institution
operating outside the Lebanese financial system, and one of the tools by
which Hezbollah entrenches its support among the country’s Shiite
population.
In addition to its military wing, Hezbollah has branches that run
schools, hospitals, low-price grocery stores, as well as al-Qard al-Hasan,
from which hundreds of thousands of its supporters benefit.
Israel says the institution finances arms purchases and is used to pay
Hezbollah fighters. The U.S. Treasury has imposed sanctions on it since
2007, saying it is “used by Hezbollah as a cover" to manage the militant
group’s financial activities "and gain access to the international
financial system.”
Founded four decades ago, soon after Hezbollah’s inception, the
association, whose name in Arabic means “the benevolent loan,” offers
interest-free loans and allows people to deposit gold as collateral in
return for the credit, enabling them to pay for school fees and
weddings, buy a car or open a small business. People can also open
savings accounts.
Al-Qard al-Hasan has more than 30 branches around Lebanon. Following
Lebanon’s 2019 financial collapse, the institution provided a lifeline
for many Lebanese. Unlike banks around the country that imposed limits
on how much people could withdraw from their bank accounts, people with
deposits at al-Qard al-Hasan were still able to withdraw their cash.
In 2021, the U.S. Treasury’s Office of Foreign Assets Control imposed
sanctions on seven individuals in connection with Hezbollah and al-Qard
al-Hasan. A year later, the Biden administration slapped terrorism
sanctions on two others, including al-Qard al-Hasan’s director, Adel
Mansour, and two companies in Lebanon for providing Hezbollah with
financial services.
Mansour did not respond to messages left by The Associated Press for
comment. After sanctions were imposed against him two years, he told the
AP: “I am proud and this is a medal of honor for me.”
A senior official at the central bank in Beirut refused to comment about
the Israeli targeting of al-Qard al-Hasan branches when contacted by the
AP on Monday.
David Asher, an expert on illicit financing who has worked at the U.S.
Defense and State Departments and is now a senior fellow at the Hudson
Institute, said the Israeli attacks were “a big deal.”
“Al-Qard al-Hasan is part of Hezbollah’s central financial unit,” which
is akin to its treasury, he said.
Faysal Abdul-Sater, a Lebanese political analyst who closely follows
Hezbollah’s affairs, said the militant group is not funded through al-Qard
al-Hasan. He said the money deposited at the institution belongs to
individuals and companies, and the system benefits people with low
incomes.
“This is a symbolic strike,” Abdul-Sater said about targeting al-Qard
al-Hasan.
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A bust of late Iranian General Qassem Soleimani, stands in front of
a destroyed branch of the Hezbollah-run Qard al-Hassan at the site
of an Israeli airstrike in Dahiyeh, Beirut, Lebanon, Monday, Oct.
21, 2024. (AP Photo/Hassan Ammar)
How harmful are the Israeli
strikes?
The systematic destruction of al-Qard al-Hasan branches, coming
after assassinations that took out almost all of Hezbollah’s top
leadership and displaced hundreds of thousands of the group’s
supporters, is bound to add to the chaos and fears within
Hezbollah’s base of support.
But experts say it is unlikely to harm Hezbollah's finances in and
of itself.
Al-Qard al-Hasan tried to reassure customers, saying in a statement
late Sunday that it had evacuated all its branches and relocated
gold and other deposits to safe areas.
Lebanese economist Louis Hobeika said destroying al-Qard al-Hasan
branches will have no effect on Hezbollah’s funding as its money
comes from Iran and wealthy supporters around the world. The group's
salaries are known to be paid in cash in dollars.
“As long as Iran and Hezbollah’s allies are funding the group it
will not be affected,” Hobeika said, adding that the flow of “bags
of cash” from abroad will continue just like in the past.
Lina Khatib, an associate fellow at Chatham House who focuses on the
Middle East, said al-Qard al-Hasan customers still have faith that
“Hezbollah will be able to compensate them for their losses.”
Khatib noted that al-Qard al-Hasan's operations, like those of any
financial institution, are not limited to any physical assets the
strikes targeted.
A Lebanese woman who gave only her first name, Zahraa, for safety
reasons, said she was in need of cash and deposited a gold necklace
and several rings earlier this year in return for an $800 loan. The
woman said she has been repaying it in $50 monthly installments.
“I don’t care whether I get the gold or not at a time when men are
sacrificing their souls in south Lebanon,” Zahraa said referring to
Hezbollah gunmen who are fighting invading Israeli forces.
Who was the Hezbollah financier killed?
Israel began going after Hezbollah's finances earlier this month,
when an Israeli airstrike destroyed the top two floors of a south
Beirut building, killing Mohammed Jaafar Qassir, who the U.S.
Treasury and Israel accused of transferring hundreds of millions of
dollars from Iran to Hezbollah over the years. The U.S. had offered
$10 million for information leading to the disruption of the
financial mechanisms of Hezbollah.
The U.S. Treasury said Qassir provided funding for Hezbollah
operations through a number of “illegal smuggling and procurement
activities and other criminal enterprises.”
It added that Qassir was also a critical conduit for financial
disbursements from the powerful Quds Force branch of Iran’s
paramilitary Revolutionary Guard that are used to fund Hezbollah’s
activities.
The Israeli military said Qassir was in charge of Hezbollah’s Unit
4400, which ships weapons from Iran to Lebanon, and supervised
Hezbollah’s development of precision-guided missiles.
Hezbollah did not comment on Qassir’s killing.
Days after Qassir was killed in Beirut, an airstrike in Damascus,
Syria, blamed on Israel killed his brother Hasan, who was married to
Nasrallah’s daughter, Zeinab.
____
Associated Press writers Adam Schreck in Jerusalem and Mohammad
Zaatari in Sidon, Lebanon, contributed to this report.
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