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US sanctions Lebanese bank it says has ties to Hezbollah

US Treasury alleges Jammal Trust Bank 'knowingly facilitates banking activities for Hezbollah'
Jammal Trust Bank has 25 branches across Lebanon, including in capital Beirut (AFP/File photo)

US President Donald Trump's administration issued a new set of economic sanctions, this time blacklisting a major Lebanese bank it accuses of ties with the Lebanese group Hezbollah.

The US designated Hezbollah a foreign terrorist group in 1997, and has accused it of serving as a proxy force for Iran in Lebanon.

The sanctions issued by the Treasury Department on Thursday target Jammal Trust Bank, a Lebanese commercial bank with 25 branches across the country, according to its website.

In a statement, the department said the bank "knowingly facilitates banking activities for Hezbollah" and provides financial services to the Iran-based Martyrs Foundation, which it said "funnels money to the families of suicide bombers".

"Jammal Trust's misconduct undermines the integrity of the Lebanese financial system," Secretary of State Mike Pompeo said in a statement issued shortly after the sanctions were announced.

In Beirut, the Association of Banks in Lebanon voiced "regret" over the US move, adding that all funds deposited with Jammal Trust were safe and the country's central bank was capable of rectifying the situation if need be.

Meanwhile, Israeli Prime Minister Benjamin Netanyahu commended the Trump administration for the move.

"This is an important step designed to put pressure on Iran and its proxies, which are acting against the State of Israel," Netanyahu said in a statement on Thursday. 

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The sanctions come amid a series of harsh economic measures taken by the Trump administration as part of its "maximum pressure campaign" against Iran and Iran-affiliated groups across the Middle East.

They also follow Lebanese Prime Minister Saad al-Hariri's call last month for protection of the Lebanese banking system, which he said was the backbone of the country's worsening economy.

Hezbollah, a Shia-dominated militant organisation and political party that has major influence within the Lebanese government, rejects accusations of terrorism, saying it is a resistance movement against Israel.

In July, Washington also imposed sanctions on three Hezbollah political figures, including two members of the Lebanese parliament.

Lebanese leaders from different political camps quickly decried that decision.

Also on Thursday, the US Treasury Department issued separate sanctions against four individuals it accused of being "facilitators" in the transfer of tens of millions of dollars between Iran's Islamic Revolutionary Guard Corps (IRGC) and the Palestinian faction Hamas, which governs the Gaza Strip.

The US designated the IRGC a terrorist organisation in April.