BEIRUT – In a little-noticed news item, on March 8, security forces in Beirut raided several money-transfer shops accused of sending upward of $20 million to militant groups in Syria. Lebanese security forces arrested at least six Lebanese nationals and closed 16 stores in several neighborhoods throughout the city.
By many accounts, the transfer of illicit funds to armed groups in Syria involved shops like Western Union and MoneyGram. The Washington Institute for Near East Policy noted in a 2015 report that many transfers went to areas “known to be funding, logistical and smuggling hubs” for internationally designated terrorist groups.
Nevertheless, attempts to crack down on financial networks leading from Lebanon into Syria highlight the dual-edged nature of sanctions targeting armed groups in complex conflict settings.
For one, money transfer shops like the ones shuttered in the recent raids are often used by everyday Syrians in Lebanon to transfer money back to their families. While there are no formal laws in Lebanon preventing refugees from opening bank accounts, many institutions place significant restrictions on the practice to prevent funds from being sent to terrorist groups.
Given a strong international sanctions regime, Lebanese financial institutions are reasonably worried about indirect links to neighboring violence. Lebanese financial institutions would lose access to valuable foreign markets and funding sources if caught in violation of international regulations.
Because of these strict regulations, only a small number of Syrian refugees opened functional bank accounts in Lebanon – and they are only permitted to deposit and handle Lebanese pounds and not U.S. dollars.
Therefore, if they cannot physically make the trip to Syria, money-transfer shops are one of few ways for Syrians in Lebanon to send remittances back home. Otherwise, reporting by The Daily Star in Beirut noted that many people have begun relying on an informal network of couriers – usually trusted taxi or bus drivers. In exchange for a cut of the funds, drivers transport cash across the border, usually within a week.
Similar systems are in place linking Syria with southern Turkey, another center for refugees fleeing the conflict. Because shops like Western Union often do not operate in areas controlled by opposition or militant groups, refugees rely on so-called “hawala” networks of informal traders to send cash back to families. Similar to Lebanon, money is transferred through a series of individuals in territories controlled by different armed groups – each charging up to $20 per transaction.
The intricacies of these unofficial systems highlight the potential contradictions of efforts to stem the flow of financing for armed groups. Though the original aim of sanctions is to eliminate foreign funding for groups like ISIS and various al-Qaida affiliates, every day people on both sides of the border, caught in a multifaceted financial web, often suffer the most.
While the risks of large-scale transfers to terrorist groups are real, the fact remains that for the vast majority of Syrian nationals facing work restrictions and abrogated economic opportunity in Lebanon, Turkey and elsewhere, crackdowns only serve to strain their already-limited means. This concern doubles for those left in Syria, where formal banking systems withdrew long ago from areas held by militant groups.
Remittances have become a critical lifeline for families and individuals caught in the violence because of this. Moreover, in parts of Syria where work is limited or nonexistent, fighting with armed groups is well paid, and offers people without access to outside resources a source of much needed cash.
With unemployment as high as 90% in some areas, inflated prices for needed goods and services, restricted internal movement and a devastated agricultural sector, membership sometimes offers the rare possibility of securing a regular income to support a household. According to several reports released over the course of the past year, some fighters have even switched group affiliation in search of higher wages.
Though it seems counterintuitive, an effective financial system – rather than crackdowns – might therefore serve as part of a potential solution to the problem of recruitment for armed groups.
Although the direct impact of sanctions on civilian populations is well documented in cases like Iraq during and after the first Gulf War, subtle and collateral effects of these policies are equally important. International concerns over informal transfers of funds to armed groups are undeniable, but the social networks connecting Syria, Lebanon and Turkey are complex, delicate and prone to destabilization.
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