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Lebanese banks partially blocked by a US law

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During an interview with LBCI on the 28th April 2016, Riad Salamé, governor of the Central Bank of Lebanon, indicated the modalities for the application of the US Hezbollah International Financing Prevention Act [1].

«A new circular will be published next week which (…) will oblige Lebanese banks to conform to the decrees of application of (the US law). We consider that there are no other alternatives (...) since we have to protect the banking system, which exists thanks to the exchanges between corresponding banks », he declared.

For the last four months, Lebanon has been living to the rhythm of contradictory declarations about the consequences of a foreign law which assimilates the Lebanese Resistance with a terrorist organisation and a drug cartel.

However, the governor has also indicated that he will not allow the banks to exceed the conditions of the US law. Therefore, the salaries of the deputees and Ministers of Hezbollah will still be paid, on the condition that they do not use them to finance the actions of their party.

«Precise criteria concerning the application of this law have been put into place, and specify that the accounts which have to be closed are those affiliated with Hezbollah, in its status as an institution, and those affiliated with the names listed on the list of the Office of Foreign Assets Control (OFAC)

... no more, no less (…) The circular also specifies that in the case of the closure of (or the refusal to open) a bank account, the banks are bound to inform the BDL of the reasons justifying this (decision), as well as the identity of the beneficiary of the account», he declared.

In addition, governor Salamé also denied the charges printed in Le Monde according to which Lebanon was to be put on the blacklist of fiscal paradises established by the Organisation for Economic Co-operation and Development.

He said that bank confidentiality was maintained as long as it did not serve tax evasion, but only the protection of private life, and that Lebanon would bow to international obligations concerning the exchange of information, in operation since the adaptation of its legal arsenal in November 2015.

The Assistant Secretary for Terrorist Financing in the Office of Terrorism and Financial Intelligence, Daniel Glaser, should be visiting Lebanon in order to check the application of the US law.

Translation
Pete Kimberley

[1] “Hezbollah International Financing Prevention Act of 2015 (H.R.2297)”, Voltaire Network, December 16th, 2015.

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