US sanctions official says time is right to cut Iran's Hezbollah funding

The United States seeks to take advantage of a "moment" in Lebanon in which it can cut Iranian funding to Hezbollah and press the group to disarm, the U.S. Treasury Department's top sanctions official said.

In a late Friday interview, John Hurley, the undersecretary for terrorism and financial intelligence, said Iran has managed to funnel about $1 billion to Hezbollah this year despite a raft of Western sanctions that have battered its economy.

The U.S. has adopted a "maximum pressure" campaign on Tehran meant to curb its uranium enrichment and regional influence, including in Lebanon where Iran-backed Hezbollah is also weakened after Israel shattered its military power in a 2023-24 war.

Late last week Washington sanctioned two individuals accused using money exchanges to help fund Hezbollah, which is deemed a terrorist group by several Western governments and Gulf states.

"There's a moment in Lebanon now. If we could get Hezbollah to disarm, the Lebanese people could get their country back," Hurley said.

"The key to that is to drive out the Iranian influence and control that starts with all the money that they are pumping into Hezbollah," he told Reuters in Istanbul as part of a tour of Turkey, Lebanon, the United Arab Emirates and Israel meant to raise pressure on Iran.

IRANIAN ECONOMY HIT BY SNAPBACK U.N. SANCTIONS

Tehran has leaned on closer ties with China, Russia and regional states including the UAE since September, when talks to curb its disputed nuclear activity and missile programme broke down, prompting the reinstatement of United Nations sanctions.

Western powers accuse Iran of secretly developing nuclear weapons capability. Tehran, whose economy now risks hyperinflation and a severe recession, says its nuclear program is wholly for civilian power purposes.

U.S. ally Israel says Hezbollah is trying to rebuild its capabilities and on Thursday carried out heavy airstrikes in southern Lebanon despite a ceasefire deal agreed a year ago.

Lebanon's government has committed to disarming all non-state groups, including Hezbollah, which was founded in 1982 by Iran's Revolutionary Guards, spearheaded the Iran-backed "Axis of Resistance", and opened fire on Israel declaring solidarity with Palestinians when war began in Gaza in 2023.

While the group, which is also a political force in Beirut, has not obstructed Lebanese troops confiscating its caches in the country's south, it has rejected disarming in full.

Hurley, in his first trip to the Middle East since taking office under President Donald Trump's administration, has pressed the case against Iran in meetings with government officials, bankers and private sector executives.

"Even with everything Iran has been through, even with the economy not in great shape, they're still pumping a lot of money to their terrorist proxies," he said.