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Lebanon on mission to curb further sanctions

A draft has reportedly proposed adding the Amal Movement as a target of U.S. sanctions. AFP PHOTO / MANDEL NGAN

BEIRUT: A high-ranking Lebanese political and banking delegation is set to travel to Washington in May in a bid to dissuade U.S. authorities from expanding the list of American sanctions against individuals and groups suspected of links with Hezbollah. The delegation, according to sources, may include some ministers and lawmakers as well as representatives of the Association of Banks in Lebanon.

It is not yet clear whether Central Bank Gov. Riad Salameh will be part of the delegation.

A number of members of the U.S. House of Representatives created a draft for a bill entitled “Hezbollah International Financing Prevention Amendments Act of 2017” that is mainly aimed at cutting off all forms of financial support to the party, which is labeled by Washington as a terrorist organization.

The new draft, which has not yet been introduced in the House, has reportedly added new entities and the Amal Movement to the list of sanctioned parties.

A similar draft is said to be making the rounds in the Senate.

The proposed amendments have caused alarm in Lebanon among both politicians and the banking sector.

President Michel Aoun warned Monday that the proposals could inflict harm on Lebanon and its people if passed without amendment.

MP Alain Aoun, who recently visited Washington to take part in the World Bank and International Monetary Fund conference, told The Daily Star that he and his Lebanese colleagues did not have the chance to discuss the issue of the new proposed sanctions on Hezbollah with members of Congress.

“We were unable to meet with any of the Congress members during our visit because it was a weekend. However, we did meet with members of the U.S. administration. We raised our concerns about the possible impact of the new sanctions on Lebanon if some clauses were not modified. But we reiterated that Lebanon has fully complied with the Hezbollah International Financing Prevention Act which was issued in 2015,” the lawmaker explained.

Aoun said that the new proposals are, for the time being, only a draft and not even a bill.

“We actually did not sense from the Americans that they want to destabilize the situation. On the contrary, all American officials we met assured [us] that they are keen to maintain stability in the country. But the problem is that the Congress and Senate are independent and are free to introduce new laws,” he said.

Aoun did not expect the draft to be discussed by the House and Senate anytime soon, adding that other Lebanese lawmakers plan to visit Washington in a couple of weeks to follow up on the matter.

Asked if the new development could speed up the renewal of Salameh’s term for another six years, Aoun said that this subject should be discussed by the Cabinet.

“We should see where our interest lies as Lebanese and to take the right decision on this matter. Any discussion on the future of governor should take into account the interests of the banking sector, stability of the monetary system and the new proposed sanctions on Hezbollah,” Aoun said.

Salameh’s term in office ends in July, but the pressing issue of the proposed sanctions has prompted some bankers and economists to urge the government to renew the mandate of the governor due to his long experience and deep connections with U.S. Treasury.

The Daily Star also talked with a number of Washington-based experts on the proposed sanctions.

Jonathan Schanzer, senior vice president at the Foundation for Defense of Democracies, said U.S. President Donald Trump and his administration have been weighing their options on Hezbollah and Iran.

“This has been an ongoing conversation. With the Trump administration, I think there’s been some push and pull between what is feasible and what the ultimate goals might be. There is often a gap like this. I think working towards a compromise is often the key. The fact that we haven’t seen [a] text yet shouldn’t be an indication that there is a lack of a conversation. It’s a vibrant one,” Schanzer said.

He expected the opposition Democrats to support the proposed sanctions on Hezbollah.

“We’re not just talking about Republican-controlled Congress. A lot of this is making sure that eventual sanctions are palatable amongst Democrats, I think. We are going to see increased pressure. There will certainly be a focus on the Hezbollah-Iran connection. In other words, leaving nuclear sanctions to the nuclear deal opens up a wide range of other actions that could be taken in the non-nuclear realm. Hezbollah’s ties are a big component of that,” Schanzer said.

Richard Nephew, a senior fellow at the Brookings Institution specializing in arms control and nonproliferation, said that while he supports tightening sanctions on Hezbollah, U.S. lawmakers should make sure that they don’t harm Lebanon’s banking sector in the process.

“You need measures that don’t damage the banking system, and you need to make sure that you’ve built in protections for people who don’t have anything to do with the group,” he said.

Nephew said the visit of the Lebanese delegation to Washington to discuss the subject of sanctions could be helpful.

“It could help. If they go in and have a meeting with the [bill’s] sponsor saying how much it screws things up, you can have people leave their bill sitting there and not act on it. But it can also backfire; you can undermine yourself if you say something stupid,” he added.

“The best way I’ve seen these things get handled is if the congressperson was confronted by the target who gives them a bunch of better options. That usually works better than anything else. If they’re saying the right things and saying why it doesn’t make sense they might change course.”

 
A version of this article appeared in the print edition of The Daily Star on April 26, 2017, on page 6.

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