What is the Hezbollah-linked financial institution that Israel is targeting in Lebanon?

BEIRUT (AP) — The Israeli military has carried out a wave of airstrikes against branches of a financial institution affiliated with Lebanon’s Hezbollah, saying the quasi-banking system is being used to finance the militant group’s military wing.

The attacks destroyed more than a dozen branches of al-Qard al-Hasan across Lebanon on Sunday night, and came two weeks after an airstrike killed the man many called 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 attacking their communities with devastating airstrikes, Israel says it is now going after its financiers and institutions. of the Shiite group in an attempt to further disrupt it and its support base.

Hezbollah began attacking Israeli military posts along the border with Lebanon the day after Hamas’ Oct. 7, 2023 attack on southern Israel, which killed about 1,200 people and took about 250 hostages. Hezbollah said that by launching attacks along the Lebanon-Israel border, it was supporting its Hamas allies in the Gaza Strip.

Al-Qard al-Hasan is officially a non-profit charity operating outside the Lebanese financial system and one of the tools through which Hezbollah consolidates its support among the country’s Shia 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 the purchase of weapons and is used to pay Hezbollah fighters. The US 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, shortly after the creation of Hezbollah, the association, whose name in Arabic means “the benevolent loan”, offers interest-free loans and allows people to deposit gold as collateral in exchange for credit, allowing them to pay bribes schoolchildren. and weddings, buying a car or opening a small business. People can also open savings accounts.

Al-Qard al-Hasan has more than 30 branches across Lebanon. After Lebanon’s financial collapse in 2019, the institution provided a lifeline for many Lebanese. Unlike banks across the country that imposed limits on the amount people could withdraw from their bank accounts, people with deposits at al-Qard al-Hasan could still withdraw their money.

In 2021, the US Treasury’s Office of Foreign Assets Control imposed sanctions on seven individuals linked to Hezbollah and al-Qard al-Hasan. A year later, the Biden administration imposed terrorist sanctions on two other people, including al-Qard al-Hasan director Adel Mansour, and two companies in Lebanon for providing financial services to Hezbollah.

Mansour did not reach messages left by The Associated Press for comment. After two years of sanctions against him, he told the AP: “I am proud and this is a badge of honor for me.”

A senior central bank official in Beirut declined to comment on the Israeli attack on al-Qard al-Hasan branches when contacted by the AP on Monday.

David Asher, an illicit finance expert who worked at the US Departments of Defense and State 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 similar to its treasury, he said.

Faysal Abdul-Sater, a Lebanese political analyst who closely follows Hezbollah affairs, said the militant group is not financed by al-Qard al-Hasan. He said that the money deposited in the institution belongs to individuals and legal entities and that the system benefits low-income people.

“This is a symbolic attack,” Abdul-Sater said of targeting al-Qard al-Hasan.

The systematic destruction of al-Qard al-Hasan branches, following assassinations that eliminated nearly all of Hezbollah’s top leaders and displaced hundreds of thousands of the group’s supporters, will certainly increase chaos and fears within Hezbollah’s support base. .

But experts say this is unlikely to harm Hezbollah’s finances on its own.

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 the destruction of 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. It is known that the group’s salaries are paid in cash, in dollars.