Lebanon is suffering from the burden of global sanctions

What the Arabic press is saying about banking in Lebanon after the Beirut bombing

Workers repair the facade of the headquarters of the Lebanese Blom Bank that was struck by a bomb last week. Jamal Saidi / Reuters

After the bomb attack that hit the headquarters of Blom Bank in Beirut this month, US financial sanctions against Hizbollah are threatening to pose an internal problem for Lebanon.

“For those who are not aware, most of the sanctions were initially directed against American banks that accept financial transactions suspected of yielding profits to Hizbollah and those doing business with the organisation. They do not directly target Lebanese banks,” noted the columnist Walid Choucair in the pan-Arab daily Al Hayat.

However, the latter were at risk of being cut off by American intermediate and correspondent banks if any of their transactions in US dollars bore any relation to Hizbollah, he explained.

US laws also prohibit international financial institutions, including Lebanese banks, from accepting financial transactions suspected of links with Hizbollah-associated money-laundering activity, even if they are performed in currencies other than the US dollar. This prompted the Central Bank of Lebanon to issue a circular saying that banks should notify the special investigation commission of any measures to be taken against suspicious bank accounts.

“The circular was issued in a bid to reassure US correspondent banks that they will not be penalised under the law and hence to prevent them from cutting off their Lebanese counterparts. It also aims to implement the law while ensuring no measures are taken against any individual or institution that is not mentioned on the OFAC lists, or whose association with Hizbollah is not proven,” added Choucair.

In Abu Dhabi's Aletihad, the Arabic-language sister newspaper of The National, Hazem Saghieh said that “the governor of the Lebanese Central Bank, Riad Salameh, was never associated with any partisanship, whether strong or weak.

“Whenever his name is brought up as a political candidate, ministerial or presidential, the image of a competent technocrat who has successfully filled his financial position in light of totally unfavourable internal and external economic circumstances comes to mind.

“It is true that several true accusations have been raised against him and against the role of banks in the Lebanese economy. However, this does not alter the fact that the man who was appointed governor of Lebanon’s Central Bank in 1993 was reappointed again and again thanks to his competence from within the composition of said economy and the pivotal role of its banks.”

Mr Salameh bears no animosity or grudge against Hizbollah, but has been able to coexist with the party’s position and power ever since he took up his post as governor of Lebanon’s Central Bank, he noted.

So what happened in the past few weeks? “Lebanon came under more pressure from the US and the West and was faced with two hard choices: to keep complying with the demands of Hizbollah which is labelled a terrorist organisation or face tough financial sanctions which would remove it from the global banking map,” Saghieh wrote.

Just like anyone else in his position, Mr Salameh refused to be responsible for starving the Lebanese and marginalising their country’s banking sector, hence his decision to suspend 100 bank accounts affiliated, in one way or another, to the party in compliance with the Hizbollah International Financing Prevention Act.

“The Central Bank works under the law, and our priority is to keep Lebanon on the global financial map,” Mr Salameh said. “Consequently, we have decided to implement the law and have set the necessary framework to achieve its objectives while safeguarding the rights of the Shiite population to have access to the banks.”

Mr Salameh was confronted with the usual wave of condemnation and the pro-Hizbollah media spoke of a new era of “financial and monetary opposition” up to the Blom Bank attack.

“It is still early to determine where this campaign against Salameh is heading and to what extent Lebanon’s tendency for settlement is capable of absorbing the crisis. But one thing is sure: Hizbollah opened yet another front against Lebanon’s sovereignty and the interests of its people,” remarked Saghieh.

Placing the burden of the sanctions on the shoulders of an entire country means holding it, with all its confessions, hostage of Hizbollah’s regional involvement and using it as a barricade to hold back the effects of such involvement, he concluded.