Lebanon’s Campaign Against Hezbollah Finances: Cosmetic Progress or Real Pressure?

Under mounting pressure from Washington and international regulators, Beirut has tightened regulations within its formal financial sector to claim progress, yet these measures deliberately stop short of provoking a direct confrontation that could trigger renewed internal conflict. How Hezbollah Funds Its Operations

Iran remains the primary external benefactor for Hezbollah, transferring funds largely through cash exchange companies. According to the U.S. Treasury, Iran’s Islamic Revolution Guard Corps-Quds Force transferred more than $1 billion to the group starting in January 2025. In addition to cash transfers managed by money-exchange businesses, Iran and Hezbollah have utilized gold shipments to move wealth. Beyond Iranian state backing, Hezbollah Secretary-General Naim Qassem has acknowledged receiving smaller financial contributions from the Iraqi state, Shiite religious authorities, shrines, Iraqi citizens, and Iran-aligned Shiite militias. The Houthis also raised funds directly for Hezbollah and its Lebanese support base in 2019, while the group has experimented with cryptocurrency transactions of undetermined scale. Domestically, Hezbollah generates revenue through commercial networks and ostensibly legitimate businesses owned by nominal figures. The U.S. Treasury reported that a commercial network operated by financier Alaa Hamieh diverted more than $100 million to Hezbollah starting in 2020, with Hamieh allegedly using his state investment post to channel millions toward affiliated projects. The Financial Architecture and Evasion Tactics

Hezbollah manages its capital through a dedicated financial ecosystem. Its Central Finance Unit oversees income and expenditures, Bayt al-Mal acts as the primary treasury, and Al-Qard al-Hassan (AQAH) functions as a bank-like institution holding cash and gold reserves. AQAH officials have reportedly utilized personal shadow accounts to disguise transactions and move over $500 million through Lebanese banks. Additional entities support this network. AQAH-backed Jood SARL converts gold into cash, money-service businesses like CTEX supply dollars to Hezbollah institutions, and the crowdfunding charity WaTaawanou funnels donations from the public directly into Hezbollah-run hospitals and businesses. These accumulated funds support personnel salaries, weapons procurement, social programs, and post-war reconstruction efforts. When Lebanese authorities introduced stricter controls, Hezbollah adapted its logistics rather than losing access to capital. Following tighter checks at the Beirut airport, couriers began carrying smaller amounts of cash or jewelry, while hundreds of millions of dollars were funneled through Dubai. When transfer companies blocked donation accounts, charities simply redirected funds to AQAH and alternate transfer firms. Regulatory Limits and Political Hesitation

Lebanese measures have done little to disrupt this diversified financial ecosystem. The Lebanese Central Bank issued Circular 170 on July 14, barring regulated financial institutions from dealing with AQAH and related unlicensed entities, but stopped short of closing the institution or seizing its assets. Although the Interior Ministry withheld AQAH’s annual 2026 certificate of good legal standing pending investigations, its underlying association registration remains intact, requiring a formal Cabinet decision to revoke. Judicial efforts have similarly stalled. Justice Minister Adel Nassar referred AQAH and Jood to the public prosecutor for investigation, but the case remained dormant as prosecutors awaited documents from the Central Bank without actively requesting them. Meanwhile, Intermediate Circular 761 required regulated nonbank financial institutions to identify customers and report cash transactions of $1,000 or more, yet these rules are easily bypassed through informal hawala networks operating entirely outside the banking sector. Experts note that real financial pressure would require measures overlapping with Lebanon’s commitments under its Financial Action Task Force action plan, such as closing AQAH permanently, prosecuting individuals who move funds through personal accounts, seizing illicit cross-border currency, and cutting Hezbollah-linked businesses off from state contracts. Instead, Beirut has thus far pursued a politically cautious middle ground, satisfying foreign demands cosmetically while preserving the domestic status quo.