US official says reports of sanctions against Riad Salameh untrue

Lebanese financial chief has been in office since 1993 and is embroiled in a scandal of alleged money laundering and embezzlement

Lebanon's Central Bank Governor Riad Salameh speaks during a news conference in Beirut, Lebanon. REUTERS

A US official on Friday denied reports that the Biden administration is considering sanctions against Lebanon's central bank chief, Riad Salameh.

"We have seen reports about possible sanctions on Riad Salameh. They are untrue," a US State Department representative told The National.

Bloomberg reported on Thursday that the Biden administration was considering sanctions against Mr Salameh that could lead to freezing his assets overseas and constraining his ability to do business abroad.

The Lebanese financial chief has been in office since 1993 and is embroiled in a scandal involving alleged money laundering and embezzlement. He is being investigated by Swiss authorities.

In January, Reuters reported that Swiss investigators had requested that Lebanese authorities ask Mr Salameh and members of his immediate family about transfers abroad in recent years that amount to nearly $350 million.

Mr Salameh denies any wrongdoing, and in a statement on Friday, his office at the Central Bank announced it would take legal action against Bloomberg.

“The governor of the Central Bank, Riad Salameh, will file a series of lawsuits inside and outside Lebanon against Bloomberg and its Beirut correspondent and any side that fabricated news to tarnish his reputation,” the statement read.

It went on to call such reports a “national betrayal” that endanger the "financial security of the country".

US sources told The National that the push to sanction him is more driven by European officials, while the US government has been reluctant to cause more risk and instability in Lebanon's already teetering banking sector.

On Thursday, State Department spokesman Ned Price said the US is emphasising the urgency to form a government in Lebanon. Saad Hariri was renamed prime minister last October but has not yet been able to form a government as anti-corruption protests spread across the country.

“We and our international partners, we have repeatedly underscored both publicly and privately the urgency for Lebanon’s political leaders to finally act upon the commitments they made to form a credible and effective government,” Mr Price said.

The Biden administration called for "an end to the endemic corruption, much of which has fuelled what we have seen in Lebanon in recent days".

Firas Maksad, a professor at George Washington University and an expert on Lebanon, said the discussions on sanctioning someone like Mr Salameh were not surprising but are premature for the Biden administration.

"It should not be surprising that senior US and European officials discussed the possibility of sanctions against Mr Salameh, particularly in light of the ongoing money laundering and corruption investigations against him in Europe and growing public anger at home," Mr Maksad told The National.

“It would have been shocking, however, if the Biden administration decided to target Mr Salameh that soon after assuming office, particularly as its policy towards Lebanon and the region are still being deliberated.”

He saw competing priorities emerging inside the administration on Lebanon, which must decide between “maintaining stability versus securing co-operation against Hezbollah and Iran”.