The United States is pressing Lebanon to take sweeping measures against Hezbollah’s financial infrastructure, including shutting down unlicensed money-transfer offices, tightening controls on licensed exchange businesses and moving against the group’s cash-based funding channels, Lebanese diplomatic sources familiar with the matter told Erem News.

The demands were discussed during a recent Washington meeting between U.S. Treasury Secretary Scott Bessent, Lebanese Prime Minister Nawaf Salam and Finance Minister Yassine Jaber, where the U.S. side stressed the need to curb Hezbollah’s financial apparatus and disrupt channels allegedly linked to money laundering and Iranian entities under U.S. sanctions, the sources said.

The U.S. Treasury confirmed that Bessent urged Salam and Jaber to take proactive steps to disrupt Iranian and Hezbollah financial networks and stressed the importance of financial-sector reforms to restore confidence in Lebanon’s banking system.

According to the Lebanese sources, the discussions focused in particular on a system of “single-operation” transfers allegedly used by Hezbollah to channel funds from abroad.

The mechanism reportedly relies on organized mobilization of the group’s support base to carry out individual transactions through banks and money-transfer offices, under the supervision of branch and regional officials at Al-Qard Al-Hassan, a Hezbollah-affiliated financial institution that has long been targeted by U.S. sanctions.

The U.S. Treasury has described Al-Qard Al-Hassan as an institution that provides financial services similar to those offered by a bank and has accused it of facilitating Hezbollah’s access to funds and helping the group circumvent sanctions.

Push to Close Exchange and Transfer Offices

One of the key issues raised during the Bessent-Salam meeting was the legal closure of unlicensed currency-exchange and money-transfer offices that have expanded their activity in Lebanon in recent months, the Lebanese diplomat said.

Washington also wants action against licensed exchange offices that receive what the sources described as “regular” transfers without properly verifying customer information and transaction details.

The diplomatic source said suspicious transfers into Lebanon through exchange offices had increased as authorities tightened restrictions on the physical movement of cash through border crossings and other entry points.

The shift has become more pronounced following recent Lebanese government measures against security officials at Beirut-Rafic Hariri International Airport, who were removed from their posts after allegations that they had allowed large amounts of cash arriving from abroad to be transferred to Hezbollah.

The diplomat said the U.S. Treasury Department is seeking closer cooperation between relevant institutions in Washington and Beirut to update its intelligence on individuals organizing such operations from abroad.

Some of those individuals are also believed to be connected to Iranian financial channels in several countries, the diplomat said. Identifying them could expose companies and individuals involved in financing Iran-backed groups and lead to their addition to U.S. or European sanctions lists targeting Iran.

Washington has already intensified its financial campaign against Hezbollah. In August, the Treasury sanctioned a network accused of moving hundreds of millions of dollars in cash between Lebanon, Turkey, the United Arab Emirates and Iran using couriers on commercial flights, allowing Hezbollah to obtain foreign currency outside the formal financial system.

U.S. Seeks to Cut Off Hezbollah's Funding Sources

International economics researcher Munir Younes said Salam and Jaber discussed with U.S. officials the information held by Washington on Hezbollah’s financial networks and the need to restrict any financial activity connected to the group’s operations.

According to Younes, the U.S. position centers on cutting off Hezbollah’s sources of funding, shutting down Al-Qard Al-Hassan and tackling Lebanon’s expanding cash economy.

The cash economy has grown sharply since the collapse of Lebanon’s banking sector and the resulting loss of confidence in banks, Younes told Erem News.

Washington views that cash-based system as an environment in which Hezbollah can generate revenue and operate financial mechanisms outside both Lebanese and international oversight, he said.

The United States therefore wants Lebanon to restructure its banking sector so that the cash economy can be reduced, financial flows can be monitored and transactions are brought under anti-money-laundering and other compliance rules.

As long as Lebanon’s banking system remains in its current condition, Younes said, the cash economy on which Hezbollah relies will continue to expand, alongside tax evasion and money laundering associated with drug trafficking.

The U.S. Treasury has repeatedly linked Hezbollah to Lebanon’s informal financial sector. In February, it sanctioned Al-Qard Al-Hassan’s gold-exchange operation and said the group was exploiting Lebanon’s informal financial system to sustain its activities.

In June, the Treasury and its Terrorist Financing Targeting Center partners also jointly designated Al-Qard Al-Hassan and other components of Hezbollah’s financial infrastructure.

Two Priorities for Washington

Younes said Washington has two priorities that it wants Lebanon to pursue simultaneously.

The first is to restrict Hezbollah’s financing channels and its ability to generate revenue through trade, services and other profitable activities. The Lebanese government, he said, is directly responsible for shutting down those channels.

The second is to accelerate the restructuring of Lebanon’s banking sector, amid concerns over delays by the Cabinet and Banque du Liban in advancing reforms.

The significance of Bessent’s meeting with Salam was underscored by the prime minister’s decision to meet Banque du Liban Governor Karim Said immediately after returning from the United States to discuss the country’s financial and banking situation.

During his Washington visit, Salam also met U.S. Secretary of State Marco Rubio, International Monetary Fund Managing Director Kristalina Georgieva and World Bank officials.

Lebanon's Gray-List Problem

Lebanese economist Khaled Abu Shakra said Lebanon’s inclusion on the Financial Action Task Force’s gray list in 2024 had increased pressure on Beirut to address money laundering and terrorist financing.

Those concerns are closely tied to funds reaching Hezbollah through several channels, he said, including cash, bank transfers, blockchain transactions and cryptocurrencies.

Abu Shakra told Erem News that the U.S. Treasury periodically announces sanctions against individuals connected to Hezbollah who are also linked to Iran and operate covert channels for moving money.

The issue represents broader international pressure on Lebanon, particularly from the United States and other countries, to address money laundering and develop mechanisms to combat illicit financial activity, he said.