Will Lebanon Help Iran Circumvent Sanctions?


Vol. 12, No. 1o    17 May 2012 

  • As part of its efforts to break the grip of Western sanctions, Iran is working intensively to develop its economic ties with Lebanon. Iranian Vice-President Mohammad Reza Rahimi recently visited Lebanon where he presided over the first conference of the Iranian-Lebanese Supreme Joint Committee.
  • Tehran believes it can breach the ban on financial transactions imposed by the      international banking system (SWIFT) through the ongoing covert activity of one of the largest Iranian banks, Saderat, which has five Lebanese branches. None of the branches engages in regular banking activity, and it is just about certain that they are almost completely at the service of Hizbullah’s economic activity.
  • Rahimi also pushed the establishment of an Iranian-Lebanese Free Trade Area to  enable Iran to transfer commodities between the two countries beyond the reach of Western surveillance.
  • The whole purpose of the missile arsenal Iran has built in Lebanon – numbering over fifty thousand missiles and rockets – is to deter Israel from attacking Iran. Indeed, on November 24, 2011, Maj. Gen. Yahya Rahim Safavi, the military advisor to Iranian supreme leader Ali Khamenei, warned that in case of an attack by Israel, Hizbullah in Lebanon and Hamas in Gaza will join the fighting. “There will be no need for Iran to launch ballistic missiles at Israel, because all the Zionist cities are within the range of our ally Hizbullah’s Katyushas.”

As part of its efforts to break the grip of Western sanctions, Iran is working intensively to develop its economic ties with Lebanon. Iranian Vice-President Mohammad Reza Rahimi, first deputy to President Mahmoud Ahmadinejad, recently visited Lebanon where he presided over the first conference of the Iranian-Lebanese Supreme Joint Committee. The committee was set up following Ahmadinejad’s visit to Lebanon in October 2010,1 and since then the two states have signed thirty-two agreements in various bilateral domains. Rahimi brought with him a personal message from Ahmadinejad to Lebanese president Michel Suleiman, and met with top Lebanese officials as well as Hizbullah leader Hassan Nasrallah.

During his visit, Rahimi emphasized Iran’s commitment to continue assisting Lebanon so that it can play its part in the struggle against Israel. Included among Iran’s undertakings is a loan of $100 million for building dams and improving Lebanon’s electricity and water infrastructure.2

In return, the Iranians are seeking to promote cooperation with Lebanon in the field of banking. Tehran believes it can breach the ban on financial transactions imposed by the international banking system (SWIFT) through the ongoing covert activity of one of the largest Iranian banks, Saderat, whose five Lebanese branches are in Beirut, Dahiya, Borj al-Barajina, Baalbek, and Sidon. Saderat has been operating in Lebanon since 1963. Nationalized in Tehran after the 1979 revolution, thirty years later, in 2009, it began to be traded on the Iranian stock exchange; the Iranian government, however, holds most of its shares. Significantly, none of the five branches in Lebanon engages in regular banking activity, provides loans, deals with credit cards, or performs any other commercial function. The Iranians keep these banks’ activity strictly under wraps. It is just about certain that the Saderat branches are almost completely at the service of Hizbullah’s economic activity. They are a conduit for some of the financial aid to Hizbullah’s ongoing military and terrorist activity, as well as extensive social, religious, educational, and economic endeavors, both inside and outside of Lebanon.3

During his visit, Rahimi, in another attempt at counteracting the sanctions, pushed the establishment of an Iranian-Lebanese Free Trade Area to enable Iran to transfer commodities between the two countries beyond the reach of Western surveillance.4

Another sensitive issue discussed during Rahimi’s visit was education. The Iranian education minister, who accompanied Vice-President Rahimi, proposed setting up a special committee to coordinate between the two countries in the fields of history, geography, and culture, and to create commonalities in their curricula and textbooks. Hizbullah has, indeed, recently made efforts to alter the history curricula in Lebanese textbooks. One of the harsh critics of these efforts mused: “Who knows, perhaps Hizbullah will want to dedicate a special chapter to the theory of Velayt-e Faqih [“Guardianship of the Jurist” – rule by the supreme cleric], since the Iranian proposal also includes the writing and printing of the textbooks as well as the training of the teachers who will teach this chapter.”5

Lebanese sources say Iran expects the agreements that were signed to be implemented within three months. While Iran, they noted, does not want a mere display of amity without real achievements, Lebanon has not in fact committed to any time frame for carrying out the agreements. The sources also noted that sixteen Iranian-Lebanese agreements were already signed during the tenure of Saad Hariri, the prime minister whom Hizbullah removed, in the fields of health, energy, industry, agriculture, law, and social issues, and these are yet to be implemented.6

Concurrently with the Iranian vice-president’s sojourn in Lebanon, there was a visit to Beirut by U.S. assistant secretary of state for Near Eastern affairs Jeffrey Feltman and Senator Joseph Lieberman. The two met with Lebanese Prime Minister Najib Mikati and other officials. Nasrallah’s deputy Naim Qassem berated Feltman’s attempts to encourage opposition in Lebanon and undermine the agreements with Iran, thereby preventing Lebanon from benefiting from Iran’s assistance.7 Although details of the U.S. envoys’ talks were not made available, presumably they were aimed at impeding Iran from adding Lebanon to the camp of opponents of the sanctions and using the country as a tool to circumvent them.8

As the bilateral talks wound down, the Iranian vice-president met with Nasrallah in one of the hiding places where he receives guests. Rahimi reiterated Iran’s commitment to support Hizbullah, and Nasrallah expressed gratitude for Iran’s assistance to the Lebanese people in general and to Hizbullah in particular. Nasrallah affirmed that Hizbullah would remain steadfast in its path and tackle all the challenges facing it.9

Nasrallah and his Iranian guest did not, however, go deeply into the overall conflict with Israel or Hizbullah’s response to an Israeli attack on Iran’s nuclear facilities specifically. Questions have indeed been raised in the West about how Hizbullah would respond to an Israeli strike on Iran. Some say Hizbullah would not necessarily react immediately by launching missiles deep into Israel since Hizbullah has concerns of its own that are not identical with Iran’s and a vital interest in maintaining its political status in Lebanon. Hizbullah, it is claimed, would also want to avoid an Israeli counterstrike that would cause damage to the residents of southern Lebanon and Beirut and to civilian infrastructure far in excess of the Second Lebanon War.10

This analysis, however, appears baseless, ignoring the Iranian-Hizbullah relationship since the Islamic Republic created the Shiite movement in Lebanon. The whole purpose of the missile arsenal Iran has built in Lebanon, both before and, particularly, since 2006, is to deter Israel from attacking Iran. From the moment such an attack occurs, Iran will give Hizbullah the green light to start firing the full array of long- and short-range projectiles – numbering over fifty thousand missiles and rockets – deep into Israeli territory.

Indeed, on November 24, 2011, Lebanon’s Naharnet reported that Maj. Gen. Yahya Rahim Safavi, the military advisor to Iranian supreme leader Ali Khamenei, warned Israel against attacks on Iran’s nuclear sites. He told Iran’s Arabic-language satellite channel al-Alam that in case of an attack by Israel, Hizbullah in Lebanon and Hamas in Gaza will join the fighting. “There will be no need for Iran to launch ballistic missiles at Israel, because all the Zionist cities are within the range of our ally Hizbullah’s Katyushas,” Safavi said.11

After meeting with Nasrallah, Rahimi visited the grave of the great Lebanese Shiite religious figure Mohammad Hussein Fadlallah. Rahimi was received by Fadlallah’s son Ali Fadlallah, who manages his father’s institutions, and paid homage to the Shiite leader, who saw himself as equal in status to Iranian leader Ali Khamenei.12 Recently Khamenei’s representatives in Lebanon have been waging a fierce battle over Fadlallah’s jurisprudential heritage.13 It is possible that, at Fadlallah’s gravesite, the Iranian vice-president tried to make a conciliatory gesture to Fadlallah’s Lebanese followers.

Like Ahmadinejad when he came to Lebanon in October 2010, Rahimi visited the south of the country. Senior Hizbullah representatives received him there and took command of the visit, indicating to him as subtly as possible who is really in charge of southern Lebanon. In the village of Maroun al-Ras, beside which Iran has built a tourist site known as “Iran’s Garden” to mark the “divine victory” in the Second Lebanon War, the Iranian guest was treated to a well-attended reception in a giant tent. It was dubbed the Hall of the Imam Khomeini and adorned with symbols of the Islamic Republic and pictures of Khomeini and Khamenei; in the background a prominent sign gave a forthright Iranian message: “Israel must be eliminated.”

Rahimi received a gift of binoculars. He used them to gaze into Israel, and declared how happy and proud he was to be in this blessed spot.14

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Notes 

1. Shimon Shapira, “Ahmadinejad in Lebanon,” Jerusalem Issue Brief, Vol. 10, No. 9, October 24, 2010. http://jcpa.org/article/ahmadinejad-in-lebanon/

2. Tehran Times, May 2, 2012.

3. “LBC: US Fears some of Lebanese banks involved in funding Iranian nuclear program,” Now Lebanon, March 21, 2012.

4. The Daily Star, May 4, 2012.

5. Al-Hayat, May 3, 2012.

6. Tehran Times, May 2, 2012.

7. Fars News Agency, May 7, 2012.

8. Hazem al-Amin, “A choice between two accusations of treason,” Now Lebanon, May 4, 2012.

9. The Daily Star, May 4, 2012.

10. Kip Whittington, “Will Hezbollah Attack Israel? Only if…,” Small Wars Journal, March 15, 2012.

11. http://www.naharnet.com/stories/en/21227-khameneis-military-advisor-hizbullah-rockets-to-hit-israel-if-iran-attacked

12. The Daily Star, May 4, 2012.

13. Al-Shiraa, May 5, 2012.

14. Al-Intiqad.com, May 5, 2012.

About Brig.-Gen. (ret.) Dr. Shimon Shapira

Brig.-Gen. (ret.) Dr. Shimon Shapira is a senior research associate at the Jerusalem Center for Public Affairs. He edited the Jerusalem Center eBook Iran: From Regional Challenge to Global Threat. He served as bureau chief to the Minister of Foreign Affairs and the military-secretary to the Prime Minister.