Behind the Blom Bank explosion
The explosion outside of Lebanese Blom Bank headquarters in Beirut represents the culmination of a crisis caused by the latest US sanctions on Hezbollah. These are international sanctions that Lebanon’s banking system had no choice but to enforce, arousing Hezbollah anger.
Although the group denied responsibility, the explosion comes in line with previous actions by Hezbollah, including explicit threats on social media with ties to Hezbollah towards Blom Bank. Ultimately, there can be little doubt of Hezbollah culpability.
The United States introduced a law in 2014 requiring international banks to take steps to target anybody financing Hezbollah. Known as the Hezbollah International Financing Prevention Act, there had been limited consultation with Lebanese authorities before regulations governing the law were announced in April.
Lebanon sent Finance Minister Ali Hassan Khalil to Washington to discuss the law and its implications but this was too late for any amendments to be made, particularly given the United States’ clear determination to prevent Hezbollah, which it classifies as a terrorist group, from participating in the international banking sector.
No one died in the explosion and security authorities said the aim was likely not to cause civilian casualties but to send a message to Blom Bank and Lebanon’s banking system. There was major damage to the outside of the bank, including its lavish glass façade.
Lebanon Central Bank Governor Riad Salameh and Blom Bank Chairman Saad Azhari pleaded against a rush to judgment regarding Hezbollah’s involvement and for the authorities’ investigation to be allowed to run its course.
Media outlets with ties to Hezbollah issued reports claiming that Azhari, a Syrian national, was seeking to carry out a foreign agenda against Hezbollah for personal gain. These claims were repeated by figures close to Hezbollah even after the explosion, along with allegations that it was enemies of the “resistance” — code for Hezbollah in Lebanon — that were responsible for the explosion.
Lebanese media also reported that head of Lebanon’s General Directorate of General Security Abbas Ibrahim warned the US Treasury Department during his recent visit to Washington of the potential consequences of targeting Hezbollah in this manner.
A few days after the explosion, Salameh announced, in an interview with CNBC, that 100 bank accounts with ties to Hezbollah had been frozen and that as many as 3,000 more accounts could be frozen in the future. Salameh said Lebanon intended to fully comply with the US sanctions, no doubt drawing the ire of Hezbollah.
Hezbollah Secretary-General Hassan Nasrallah initially sought to play down the effects of the US sanctions, claiming that Hezbollah did not keep money in bank accounts and that its financial operations were not tied to Lebanon’s banking system. However, news that 100 bank accounts had been frozen and that thousands more could follow, along with the Blom Bank explosion, reveals the extent to which Hezbollah has been hurt by these sanctions.
The group has subsequently sought to try to use Lebanon’s Shia community to push back, claiming that the sanctions are specifically targeting Shia money. Some Lebanese newspapers asserted that the country’s Shia community could withdraw their funds — totalling billions of dollars — from the banking sector in protest.
The Blom Bank explosion will be pivotal in the forthcoming confrontation between Washington and Hezbollah, diplomatic sources said. This attack was an attack on US decision-making as much as Lebanon’s banking system and came just days after a visit to Beirut by US Assistant Treasury Secretary Daniel Glaser. It represents an invitation for the United States to amend its sanctions policy towards Hezbollah and as a warning about what could happen if it does not.
But at a time when the United States is working in synchronisation with the Gulf Cooperation Council, the Arab League and the Organisation of Islamic Cooperation to target Hezbollah and deal with it as a terrorist group, few observers say Washington will change its course. The question is: What will Hezbollah do next?