By Pishtaz | 2025-02-10

Iranian diplomats have been using commercial flights to funnel cash to Hizbullah in Lebanon, as the Islamic Republic seeks new ways to bypass sanctions and heightened regional scrutiny.

The scheme came to light in January when Lebanese authorities searched a Mahan Air flight at Beirut's Rafik Hariri International Airport after receiving intelligence about potential Hizbullah funding transfers.

Interior Minister Bassem Mawlawi ordered a comprehensive inspection, during which an Iranian diplomat claimed diplomatic immunity but was temporarily detained when cash was discovered in his luggage, IntelliNews reported.

Mahan Air is under US sanctions for its ties to the Islamic Revolutionary Guard Corps Quds Force and role in moving weapons and money to the regime's regional proxies.

Iranian regime officials have been routing cash-carrying diplomats to Beirut via multiple regional stops, intelligence sources told Sky News Arabia January 22.

The new strategy comes as Hizbullah -- whose new chief Naim Qassem Iranian leader Ali Khamenei has named as his representative in Lebanon -- faces significant financial challenges, the outlet said.

Hizbullah's funding channels through Syria also have been disrupted by the collapse of the Bashar al-Assad regime.

Lebanon must address smuggling and illicit cross-border movements to exit the financial "gray list," with emphasis on blocking unofficial funding channels linked to money laundering and terrorism financing, the New Arab reported.

Hizbullah's banking crisis

Al-Qard Al-Hassan, which functions as Hizbullah's de facto central bank, has suspended war damage compensation payments until February 10, citing "technical reasons," according to the New Arab.

The payment freeze comes amid speculation about broader financial challenges.

The institution, established after international sanctions prevented the party from using Lebanese commercial banks, "is unlicensed and operates outside the supervision of Lebanon's Central Bank," a legal expert told Asharq al-Awsat.

"Al-Qard Al-Hassan's violations are countless, including operating ATMs without proper licensing," banking risk expert Muhammad Faheili told Nidaa al-Watan.

Hizbullah is facing "severe liquidity shortages" and an inability to meet compensation payments, a source familiar with internal discussions told Asharq al-Awsat on January 29.

There are concerns about the potential use of depositors' funds to cover compensation payments, while Hizbullah faces heightened monitoring at Beirut's airport and port, the source said.

The liquidity crisis worsened after depositors began withdrawing their money en masse, concerned their savings would be used to pay compensation, Transparency News reported.

Hizbullah attempted to "absorb public anger" by releasing compensation funds for minor home repairs while postponing larger reconstruction projects that require substantial funding, Brig. Gen. Adel Mashmoushi told Nidaa al-Watan.

"But the measures have failed to halt the decline of the institution's financial situation," Transparency News said.