U.S. Sanctions and French Diplomacy: Approaches to Corruption in Lebanon
By Marina Lorenzini
The government of Hassan Diab resigned amid unanswered questions about the Beirut port explosion in August 2020. A month later, the Prime Minister-designate Mustafa Adib failed to announce a cabinet in time to meet the agreed upon deadline and now formerly-ousted Prime Minister Saad Hariri is back in charge. A new Lebanese government has yet to be formed.
Until then, it is evident that the outstanding questions (i.e., lack of action to remove ammonium nitrate, the owners of the ammonium nitrate, and the remaining chemicals at the port) surrounding the August explosion will remain pending.
In the immediate response to the explosion, the U.S. government mobilized a multi-pronged approach: delivering $17 million in disaster aid to the Lebanese Red Cross, the FBI is joining an international investigation, and the Departments of State and Treasury is sanctioning companies and individuals. In the months since, the U.S. government has prioritized sanctions over diplomatic engagement. American diplomats have not demonstrably stood alongside French officials in their efforts to wrangle the formation of a technocratic Lebanese government.
The past twelve months have brought to the fore the consequences of the sectarian character of Lebanese politics. Namely, the popular protests across Lebanon in the fall of 2019, the default of a $1.2 billion Eurobond, the depreciation of the currency, and the subsequent ruling from the U.N.-backed tribunal on the 2005 assassination of former Prime Minister Rafiq Hariri.
Political Corruption in Lebanon
The political divisions along confessional lines allow political elites to turn access within government institutions into financial gains. Aided by the political architecture, Hezbollah, an Iranian-supported Shia-majority political party and militant group, has been able to achieve significant social and political capital in Lebanon. Formed during the Lebanese Civil War in response to Israel’s 1982 occupation of Lebanon, Hezbollah gained popular support through providing health, security, and social services to Shia-majority areas of Lebanon. Politically, Hezbollah first established a foothold in Lebanon's Parliament in 1992, and gained cabinet positions in 2005.
Since then, Hezbollah has increased its political presence to the point that, in response to anti-sectarian protests in late 2019, President Michel Aoun named Hassan Diab—a former professor at the American University of Beirut—to form a government in December 2019. Prime Minister Diab subsequently appointed a cabinet of ministers, many of whom reflected Hezbollah’s political preferences, giving Hezbollah unprecedented political power. Hezbollah directly nominated the Minister of Health Hamad Hassan and the Minister of Industry Imad Hoballah, while other ministers stood aligned with the group.
In 1997, the State Department added Hezbollah to its list of designated foreign terrorist organizations (FTO). Comprising militant groups that operationalize terrorist training, the FTO list intends to degrade a group’s ability to function and to threaten U.S. national security interests. Beyond stigmatizing FTOs on the global stage, the designation impacts travel for members, criminalizes providing material support, and freezes the financial accounts in U.S. financial institutions.
Current Approaches
In recent years, the European Union has not demonstrated the same appetite as the United States to counter Hezbollah through terrorism designations. The E.U. distinguished between the political and military wing of Hezbollah in a 2013 listing on the E.U. terror list. Despite recent calls from members of Congress, the E.U. has not designated the political wing of Hezbollah as terrorists.
A further example can be seen with the U.S. sanctions regime on Iran: strong traditional partners of the U.S. (France, Germany, South Korea, Switzerland, and the U.K.) have been developing their own channels to facilitate trade with Iran despite the threat of penalties from the U.S. government. Thus, the U.S. will likely not be able to depend on a coalition of states to enact a unified sanctions approach.
Yet, the State and Treasury Department have pursued sanctions as the principal means for achieving policy objectives by:
Labeling President of the Free Patriotic Movement political party and Member of Parliament Gibran Bassil a a Specially Designated National under the authorities from the Global Magnitsky Act
Listing former Lebanese government ministers Yusuf Finyanus and Ali Hassan Khalil as well as two members of Hezbollah's Central Council Nabil Qaouk and Hassan al-Baghdadi under the Specially Designated Nationals list on grounds of providing material support to Hezbollah
Sanctioning two Lebanon-based companies, Arch Consulting and Meamar Construction, for being owned, controlled, or directed by Hezbollah. In concert, the State Department designated Arch Consulting and Meamar Construction as an FTO and Specially Designated Global Terrorist.
Designating Sultan Khalifah As’ad, a Hezbollah Executive Council official, to the Specially Designated Nationals list. In concert, the State Department designated Sultan Khalifa As’ad for being a leader or an official of Hezbollah.
Paths Forward
In order to achieve policy goals, namely government formation and reforms, the State and Treasury Departments under the Trump administration may continue to financially constrain corrupt Lebanese elites with the following actions:
Continue sanctions on Lebanon’s Officials through the Global Magnitsky Act. The Global Magnitsky Human Rights Accountability Act authorizes the president to block or revoke the visas of foreign persons or to impose property sanctions to individuals who participate in corruption, extrajudicial killings, human rights violations, or torture.
Designate the Free Patriotic Movement as an SDGT. While several political parties in Lebanon may legally qualify for an SDGT designation, President Michel Aoun’s Free Patriotic Movement, a long-time collaborator with Hezbollah, would be a significant place to start. The International Emergency Economic Powers Act authorizes the Specially Designated Global Terrorist (SDGT) list. Primarily a sanctions-related designation, the SDGT is an effective tool to incentivize corporate compliance through civil penalties. Executive Order 13224 expanded the criteria for SGDT designation to disrupt the financial support network for terrorists and terrorist organizations.
Reduce funding to the Lebanese Armed Forces. The LAF holds primary responsibility for securing Lebanon’s land and maritime borders. The port explosion further calls into question the effectiveness of the LAF funding. Since 2010, the State Department has provided more than $1.8 billion in security assistance to the LAF, partly in an effort to decrease Hezbollah’s power in the country. Simultaneously, since 2011, the Ministers of National Defense have been either members of Hezbollah or directly appointed by Hezbollah political allies. Furthermore, the LAF has operated directly alongside Hezbollah in military operations on numerous occasions.
France’s Response
While the list of potential individuals and entities to sanction is long, sanctions alone are unlikely to lead to a behavior change. Due to this pattern, oftentimes the U.S. government employs sanctions regimes in tandem with diplomatic efforts to achieve a stated policy objective. In the case of Lebanon, France’s President Emmanuel Macron is outpacing all other countries.
In response to the Beirut explosion, President Macron has visited Beirut twice. Subsequently, French intelligence chief Bernard Emie hosted Major General Abbas Ibrahim, Head of Lebanon's General Security agency. In November, as President Macron pressed President Michel Aoun on the formation of a new government, he also dispatched Patrick Durel, the adviser to President Macron for Middle East and North African affairs, to hold meetings with Lebanese officials and the heads of the eight parliamentary blocs.
At present, President Macron is spearheading a U.N. conference with international partners in early December to discuss humanitarian aid for Lebanon.
By comparison, the Undersecretary of State for Political Affairs, David Hale, was the highest ranking official sent by the State Department in the aftermath. An October meeting in Washington, D.C. with Major General Abbas Ibrahim reportedly focused on issues related to American hostages in Syria. In November, Dorothy Shea, the U.S. ambassador to Lebanon, stated that there would be no bailout without reforms.
However, aside from sanctions, the United States’ contribution to achieving reforms remains unclear. With U.S. diplomats deployed more robustly in order to support such reforms, the Lebanese people would have a higher likelihood of seeing their year-long protests bear fruit.
At the Fletcher School of Law & Diplomacy, Marina focuses on US foreign policy in the Middle East with a particular interest in diplomatic negotiation, sanctions, and arms control. Prior to graduate school, she held two roles focused on exchange between the US and MENA Region. At the American Middle East Institute, she forged bilateral trade and investment partnerships in the healthcare, manufacturing, and petrochemical industries. Previously, she worked in the Office of the President at Al Akhawayn University in Ifrane, Morocco. She earned a B.A. in Art History from Franklin University Switzerland.
Libanon Beirut Explosion Zerstorte Stadt is courtesty of Getty Images/AFP
