Sanctions could prompt Hezbollah backlash in Lebanon

Significance

The Hezbollah International Financing Prevention Act (HIFPA) makes it possible for accounts of people and businesses who have transactions with Hezbollah to be frozen. On the surface the new sanctions pit the central bank and most of the banking sector against Hezbollah. Given the Shia movement's huge network, particularly among Lebanon's Shia community, HIFPA could become a major economic challenge for Hezbollah, large parts of the Shia community and Lebanon as a whole.

Impacts

• Failure to comply with sanctions would cut off the banking sector from the global system, causing massive damage to Lebanon's economy.
• Strict enforcement would hurt many of Hezbollah's supporters, weakening its domestic political position.
• Hezbollah may eventually initiate street clashes and seek to take over rival areas of Beirut, as in 2008.
• Saudi Arabia and its local allies would gain from Hezbollah's weakening, but Hezbollah will still retain its dominant position.