DM Katz Sanctions Numerous Arabs with Ties to Hezbollah

Photo Credit: Yonatan Sindel/Flash90

Defense Minister Israel Katz and Prime Minister Benjamin Netanyahu at the Knesset plenum, November 8, 2024.

In a dramatic move that reflects his decision to eradicate the terrorist organization Hezbollah’s economic infrastructure, Defense Minister Israel Katz on Thursday imposed economic sanctions on dozens of Arab entities linked to Hezbollah. The move is intended to strangle the terrorists’ sources of funding.

Minister Katz stated: “We will not allow Hezbollah and its supporters to continue financing terrorism against the State of Israel. The economic sanctions I imposed today are part of the effort to dismantle terrorist networks and harm those who provide them with economic oxygen. This is a clear and unambiguous message: our hand will reach anyone who supports terrorism – on every front and in every way.”

In a coordinated economic campaign led by the security establishment, sanctions were imposed on 24 key clients of the Al-Qarqi al-Hasan Association, which serves as Hezbollah’s financial arm. The sanctions target clients who deposited significant amounts with the association, which is used to directly finance terrorist activities, including the purchase of weapons, lending, and paying salaries to Hezbollah operatives.

Despite being registered as a charity, Al-Qarqi al-Hasan operates more like a bank, outside of regulation and the Central Bank of Lebanon, and serves as a conduit for money laundering. Al-Qarqi al-Hasan has branches across Lebanon, serving over 200,000 clients, and its lending volume is estimated at over half a billion dollars annually.

In April 2016, the United States Treasury Department imposed sanctions on the organization due to its ties to Hezbollah. These sanctions restrict Al-Qarqi al-Hasan’s access to international financial systems and make it difficult for it to operate outside Lebanon. The organization is often described as Hezbollah’s financial arm, providing microfinance services to individuals and small businesses in Lebanon.

Starting in late October 2020, the Al-Qarqi al-Hasan Association introduced a variety of new services. The association installed ATMs in its three branches located in the southern Shiite suburb of Beirut, with plans to expand ATM availability to all its branches. Additionally, it began offering gold buying and selling services in exchange for US dollars, effectively entering the currency exchange sector. To address concerns about personal safety and rising crime rates in southern Lebanon and the Bekaa region, the association also introduced a gold storage service for a small fee.

In January 2021, Al-Qarqi al-Hasan fell victim to a cyberattack that led to the leak of information about its clients, including Hezbollah operatives, and revealed details of Al-Qarqi Al-Hassan accounts in other banks in Lebanon.

صور متداولة لاستهداف مقر جمعية القرض الحسن في “حي السلم”#قناة_العربية pic.twitter.com/dpTBV8r9mM

— العربية عاجل (@AlArabiya_Brk) October 20, 2024

In October 2024, the IDF Spokesperson in Arabic, Col. Avichai Adraee, ordered Lebanese residents near Al-Qarqi al-Hasan branches to evacuate their homes, since the IDF was planning to attack these branches due to their affiliation with Hezbollah. As promised, several branches in Beirut and other parts of Lebanon were attacked, complete with stories about clouds of cash flying over many neighborhoods.

Defense Minister Yoav Galant later signed an order declaring Al-Qarqi al-Hasan a terrorist organization in accordance with Israel’s Counter-Terrorism Law.