Lebanon central bank freezes sanctioned economist Hassan Moukalled's accounts

Struggling financial institution implicated in US sanctions for issuing licence to CTEX to transfer money within Lebanon and abroad

The US Treasury recently announced sanctions on Hassan Moukalled, an economist and frequent public commentator on financial affairs. EPA
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Lebanon’s central bank has frozen all accounts belonging to economist Hassan Moukalled and his sons, two days after they were sanctioned by the US Treasury Department's Office of Foreign Assets Control over alleged ties to Hezbollah.

A Banque du Liban statement said it had also frozen the accounts of CTEX Exchange, a money service business owned by Mr Moukalled, and those of the Lebanese Company for Information and Studies.

Beyond mentioning the US sanctions on Mr Moukalled and his sons, the statement did not clarify the reason for the freeze.

The US Treasury Department on Tuesday announced the sanctions on Mr Moukalled, an economist and frequent public commentator on financial affairs, as well as his sons Rayyan and Rani, for enabling financial activities “in support of Hezbollah”.

Mr Moukalled is at “the centre” of a network that “plays a key role in enabling Hezbollah to continue to exploit and exacerbate Lebanon’s economic crisis”, a US Treasury statement said.

It added that the sanctions are a result of his having “materially assisted, sponsored or provided financial, material or technological support for, or goods or services to or in support of, Hezbollah.”

The US Treasury also identified Mr Moukalled as a public intermediary between Lebanon’s Banque du Liban and Hezbollah. It implicated the struggling financial institution in Mr Moukalled’s operations by revealing that the central bank had issued a licence for CTEX to transfer money within Lebanon and abroad.

Within a year, the statement said, CTEX had obtained significant market share of Lebanon’s currency transfer sector and was reportedly collecting millions of US dollars for the central bank.

Financial analysts were quick to speculate that the sanctioning of a company directly licensed by the central bank may lead to increased scrutiny of the state institution by the US.

Banque du Liban is headed by Governor Riad Salameh, who is under domestic and international investigation for money laundering and embezzlement, among other financial crimes.

He has been accused of financially engineering a scheme which for decades propped up the country's economy before a liquidity shortage caused it to come crashing down in 2019 — causing what the World Bank has called one of the worst economic crises in modern history.

Updated: January 26, 2023, 4:55 PM