Hijacking Hezbollah

On the heels of Hezbollah's claim earlier this week that it has helped Syrian President Bashar al-Assad defeat the insurgency in his country, a bipartisan bill is being introduced in US Congress to put the financial squeeze on the group. The Hezbollah International Financial Prevention Act aims to impair Hezbollah's fundraising channels by imposing severe new sanctions on the organization's financial network worldwide.

"Right now, Hezbollah uses its global financial connections to launder money and help fund terrorist activities," Congressman Brad Schneider, one of the initiators of the legislation, said in a press statement. "This bill will help stifle that financial network and give the United States more tools to crack down on Hezbollah's global terrorist activities."

According to experts on Hezbollah, a large part of the organization's funding comes from a charitable network, in particular Shia diaspora both in Lebanon and outside. In addition, Hezbollah receives direct financing from Iran.

"However, there have been reports that this financing and military support from Iran has been diminishing," Filippo Dionigi, a fellow at the London School of Economics' Middle East Centre, told DW. This could be a reason for Hezbollah to seek new sources of funding.

A mere annoyance?

The Act broadens financial sanctions against the group, for example by requiring individuals and entities such as central banks that knowingly do business with Hezbollah to cease or be frozen out of US financial operations.

The legislation also targets its propaganda television station al-Manar, and urges President Barack Obama to define Hezbollah as a "Narcotics Trafficking Organization." The group allegedly earns significant profits through drug trafficking in Latin America and worldwide, though experts DW spoke to were skeptical of the corresponding research. The bill also codifies into law the policy of the United States to prevent Hezbollah's global logistics and financial network from operating.

"We must send the message to these individuals that as long as they continue to knowingly do business with Hezbollah, they are as culpable for attacks against innocent civilians as the terrorist group itself," Congressman Mark Meadows, another initiator of the Act introduced on April 7, said in an op-ed for the Washington Examiner earlier this week. "By cutting off Hezbollah's lifelines to international financing, we can break its cycle of violence around the world."

But can a crack-down on foreign banks that do business with Hezbollah and its affiliates or move cash on the group's behalf really be effective?

"This Act is not worrying Hezbollah in terms of its military and political clout," Nora Stel, who researches on Lebanon at the Centre for Conflict Studies at Utrecht University, told DW. "The effect is more of a psychological nature. It would annoy them, but it wouldn't crush them."

Opaque financial structures

This is also due to the complex financing structure Hezbollah adheres to. Dionigi, who is presently working on a book tentatively titled "Hezbollah, Islamist Politics and International Society," said a flow of funds was probably based on very informal structures, so it would be difficult to pin down connections between investors and Hezbollah.

"The ways that Hezbollah receives money from abroad and how the organization is organized is very well-guarded," Stel said.

But this very complex and opaque system also provides room for maneuver, Dionigi said. "It is unclear who operates what. This is way more complicated and it won't be the final act," he said. "Hezbollah is quite crafty." However, US lawmakers consider these intransparent structures to be the organization's sore spot.

"This financial network is Hezbollah's Achilles' heel," Meadows said. However, in view of Hezbollah's role in Syria, experts question whether this proposed bill is ultimately meant to be more of a signal than a strong measure.

"Hezbollah has been presenting itself in a very self-confident manner in Syria since May 2013," Maren Koss, research fellow at the GIGA Institute of Middle East Studies in Hamburg, told DW. Hezbollah is dependent on Syria for their weapons, which are delivered from Iran through Syria. "So they are securing their survival."

The US announced last August that it was sanctioning Hezbollah over its support for the Syrian regime, a largely symbolic move as the group has been subject to financial restrictions since it was classed as a terrorist group in 1997. "Basically, the US is telling them: 'We're still keeping an eye on you!'," Dionigi said.

According to Koss, the Act and its implications would not have any effect on Hezbollah's activities in Syria. "They will continue to support Assad in order to maintain their own power in Lebanon," she said.

Media impact

In addition, the legislation also sanctions the Lebanon-based al-Manar station, Hezbollah's official television and online mouthpiece. The organization uses its self-proclaimed "station of resistance" to reach not only the citizens of Lebanon, but also the broader Arab and Muslim worlds. Al-Manar was already declared a terrorist entity in 2004 by the US.

However, the bill seeks to go a step further - sanctioning satellite providers that carry the station and forcing the Obama administration to explain why these providers have not already been penalized for providing material support to the terror group. "This sounds like more of a punishment towards Hezbollah than an attempt to curb media activities," Dionigi said. Al-Manar is used as a source of radicalization.

The bill is now to be debated in Congress. But its initiators are sure they are on the right path. "The threat of Hezbollah has grown substantially as the region becomes more unstable," Congressman Eliot Engel, Ranking Member on the House Foreign Affairs Committee, said. "Hezbollah's actions in Syria - directed by their patrons in Iran - have helped keep the Assad regime in power. (…) I support the Hezbollah International Financing Prevention Act because I believe it will give the administration the tools they need to break any lifeline to Hezbollah and will work to seek its passage in Congress."