Treasury Says Iran Controls Hezbollah. Lebanon Is Still Responsible.

Washington has potentially raised the cost of doing business with Hezbollah by formally tying the group to Iran under U.S. sanctions law. On Thursday, August 20, the Treasury Department’s Office of Foreign Assets Control (OFAC) redesignated Hezbollah under Executive Order 13224 for being “owned, controlled, or directed by, or” acting for Iran’s Islamic Revolutionary Guard Corps-Quds Force (IRGC-QF), the guard’s foreign-operations arm. Treasury cited Quds Force coordination of Hezbollah attacks and “deep involvement” in its political decision making. It also sanctioned 10 people it says moved funds for Hezbollah and the IRGC-QF. Hezbollah already faced U.S. terrorism sanctions. The redesignation adds Iran-specific sanctions exposure for third parties dealing significantly with the group. Foreign banks knowingly facilitating significant Hezbollah transactions can face restrictions on U.S. accounts and lose access to dollar clearing; other foreign parties can face additional sanctions. Beirut Remains Responsible The Treasury Department’s action addresses who directs Hezbollah, but not Lebanon’s obligations to restrain it or govern armed power on its territory. UN Security Council Resolution 1701, adopted after the 2006 Israel-Hezbollah war, calls for Beirut to disarm all armed groups and ensure “no weapons or authority in Lebanon other than that of the Lebanese State.” The June 26 U.S.-Israel-Lebanon Trilateral Framework restated those obligations more explicitly: Beirut committed to the “complete and verified disarmament” of all non-state armed groups, eliminating their military capabilities nationwide, and exclusive government authority over war and peace. Lebanon also committed to preventing funds from reaching non-state armed groups or affiliates and using available legal measures against them. Hezbollah Is 100 Percent Iranian and 100 Percent Lebanese Lebanon’s responsibility stems from Hezbollah operating on its soil and being as much a Lebanese as an Iranian phenomenon. Hezbollah’s leaders and fighters are Lebanese. The group has fully participated in Lebanese politics since entering parliament in 1992 and government in 2005. It has also built extensive social-service and patronage networks serving its Lebanese Shiite base, which reciprocates with votes and popular support.Hezbollah is woven into Lebanon’s political and social fabric because it grew from Lebanese Shiite political and social currents. In 1974, Shiite cleric Musa al-Sadr founded the Movement of the Disinherited to mobilize Lebanon’s long-marginalized Shiites. During the 1960s and 1970s, Lebanese Shiite clerics studying in Najaf, Iraq’s leading Shiite seminary center, encountered Ayatollah Ruhollah Khomeini and his doctrine of clerical rule. Forced back to Lebanon by Iraqi repression in the late 1970s, some preached those ideas at home. By the early 1980s, these Lebanese Shiite, Islamist clerical, and militant currents were coalescing into a proto-Hezbollah amid the civil war. Exploiting Israel’s 1982 invasion of Lebanon, Iran then helped fashion these currents into Hezbollah. IRGC personnel deployed to the Bekaa Valley to train and arm Hezbollah’s founding cadres, and Tehran became its principal source of money, weapons, training, and strategic support. Hezbollah’s 1985 Open Letter pledged obedience to the wali al-faqih —the ruling Islamic jurist, Khomeini — and his successors. Hezbollah’s former Secretary-General Hassan Nasrallah, later called that pledge an immutable doctrinal and religious allegiance, while Naim Qassem has called the Open Letter a “permanent and continuous document.” Iran and Hezbollah’s ideological bond remains operational. IRGC officers are rearming and rebuilding Hezbollah since its losses in the 2023-2024 war with Israel, developing joint missile plans, and directly supervising its fighters. Continue Pressing Lebanon The redesignation provides a basis for additional sanctions and gives Washington another financial lever to enforce Lebanon’s framework commitments. Treasury should warn Lebanese banks and businesses that significant Hezbollah dealings carry Iran-related penalties by sanctioning institutions that cooperate with the group. Treasury says the network designated on Thursday used couriers on commercial flights to move cash outside the formal financial system into Hezbollah’s Lebanese base — the very financing Lebanon committed to stop. That pressure should reinforce U.S. conditions on new assistance to the Lebanese state, codified in the June Framework Agreement. That agreement requires Lebanon meet “verifiable milestones” for dismantling Hezbollah’s military infrastructure, preventing its financing and rearmament, and establish Beirut’s monopoly on force. David Daoud is a senior fellow at the Foundation for Defense of Democracies (FDD), where he focuses on Israel, Hezbollah, and Lebanon affairs. For more analysis from David and FDD, please subscribe HERE. Follow David on X @DavidADaoud. Follow FDD on X @FDD. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.