Foreign banks must cease any business dealings with the Iran-backed terrorist group Hezbollah or its proxies to avoid being blocked from the American financial system, The Wall Street Journal reported  on Monday. The restrictions stem from a new law, which unanimously passed both  houses  of Congress at the end of last year.
The Hezbollah International Financing Prevention Act of 2015 was signed into law last month by President Barack Obama. The White House, at the time, trumpeted its signing of the bill into law, saying it works with Congress to “maximize the tools available to us to thwart Hezbollah’s network at every turn,” and that the law will target the group’s “financial support infrastructure.”
Banks will have to “heighten the prioritization of their Hezbollah-related due diligence,” said Matthew Levitt, a former Treasury Department official now at the Washington Institute for Near East Policy who wrote a book about Hezbollah’s global footprint.
“If they want to continue doing business in or through the U.S., [foreign banks] need to ensure they provide no financial services to a designated Hezbollah entity,” said Mr. Levitt.
The law, which is modeled on previous legislation that targeted Iran, will impose sanctions on any bank that facilitates transactions on Hezbollah’s behalf. Because Hezbollah often sets up front companies to handle its finances, the banks will be required to ensure that they are not conducting business even indirectly with the terror group.
Late last month, The Times of Israel reported  that Hezbollah is suffering from a financial crisis and failed to pay salaries to its officials in November and December.
In September, Iran announced  that it was boosting its funding of Hezbollah and Hamas in anticipation of the sanctions relief that Tehran is expecting to receive from the nuclear deal.
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