US bill could impose sanctions on banks operating in 'Hezbollah-dominated' areas of Lebanon, Latin America

A hawkish US Congressman introduced last week a bill would sanction all banking operations in areas deemed under the influence of Iranian-backed Lebanese paramilitary group Hezbollah, causing mixed reactions in Lebanon.

On September 30, the Republican lawmaker Joe Wilson, who is known for his hardline foreign policy positions, said his bill dubbed the 'Hezbollah Money Laundering Prevention Act of 2020' aimed to “stop the Iranian backed terrorist organization Hezbollah’s money laundering activities across the world” targeting areas in south Lebanon and Latin America.

The bill would give additional powers to the President to “make a determination that areas under the terrorist organization’s control," according to Rep. Wilson.

It is not clear whether the bill will be successful at this stage but the move has already been met with uproar in Lebanon. Critics say if passed it would amount to collective punishment of the population in these areas, as their residents are diverse and not monolithically supportive of the militant group. Pro-Hezbollah media called it an attempt to 'partition Lebanon' as it would force local banks in areas such as South Lebanon and southern Beirut suburbs, where Hezbollah maintains a heavy presence, to deny services to local residents.

Wilson, who is a Member of the Middle East, North Africa, and International Terrorism Subcommittee of the House Foreign Affairs Committee, said this legislation would represent the “toughest sanctions ever proposed by Congress” against Hezbollah.

“By cutting off banks in areas under the terror group’s control from the international financial system, this bill will go a long way towards drying up the Iranian terror proxy’s resources to conduct murderous attacks against the US and our allies,” he said in a statement.

“This bill will make it much harder for Hezbollah to do Iran’s bidding in propping up the criminal Assad regime, the Houthis in Yemen, and continue to destabilize the Middle East.”

The proposed bill was co-sponsored by an additional twelve Republicans, and will need to pass the Senate and majority Democrat House of Representatives before needing to be approved by the President.

The bill comes in the latest efforts by US lawmakers to sanction Iran and its allies. 

The US and European nations are at loggerheads after Washington began the process of activating a controversial mechanism aimed at restoring UN sanctions against Iran in August.

Britain, France and Germany rejected the move, saying it frustrated their efforts to salvage the 2015 nuclear accord.

Washington controversially maintains it has the right to force the reimposition of sanctions through the agreement's "snapback" mechanism, despite its withdrawal.