In a move reflecting the rigorous measures taken by the US to combat money laundering and terrorism financing, the US Department of the Treasury issued a new decision on June 28 in which it named four Lebanese individuals and three institutions under the Foreign Narcotics Kingpin Designation Act. One person was named under Presidential Executive Order 13224 for supporting Hezbollah.
The four Lebanese individuals are: Abbas Hussein Harb, Ibrahim Shibli, Mohammad Qasem Saleh and Hussein Ali Harb. They were charged with involvement in drug trade operations worth millions of dollars, along with Ayman Gomaa, whose name had been previously given by the department.
Ali Mohammad Saleh was also named under the presidential order for providing financial, material and technological support to Hezbollah.
The Treasury Department reported that Gomaa had transferred more than one million dollars to an account owned by Abbas Hussein, who lives in Colombia. Ibrahim Shibli, director of Fenicia Bank in Abbassiyah, Lebanon, ran the operation.
By publishing these names, the department aims to uncover the network with which Gomaa is involved. In turn, this will uncover the organizations that are carrying out the money laundering operations which have international ramifications in the US and the Middle East, and it may also uncover Hezbollah's ongoing activities in South America.
These decisions by the Department of Treasury prohibit US individuals and institutions from dealing with these people, which in effect leads them to freeze their assets under US jurisdiction.
What do these new American decisions mean? What impact do they have on the Lebanese banking sector? After all, the US Treasury had previously issued a decision that prohibited any kind of transactions with the Lebanese Canadian Bank, which led to the liquidation of that bank and the continuation of civil proceedings against it before the US judiciary.
A US diplomatic source answered these questions by saying that the primary goal is to "protect the US banking sector, institutions and individuals from illegal operations that are being carried out by individuals and networks, as well as to uncover money laundering, the financing of terrorism and drug trafficking activities."
Asked how these decisions will affect Lebanon, the diplomat says that the US administration is concerned about "the decision that was made yesterday, as it implies that illegal operations are still ongoing and subjects the Lebanese financial sector to surveillance and follow-up."
The source added that "their concern shows that the US Treasury is still committed to protecting its financial sector and addressing the issue by continuing to cooperate with monetary authorities in Lebanon."
Once again, the source confirms two points:
- There is ongoing dialogue and communication with the Central Bank of Lebanon in order to address this issue.
- The US administration is deeply committed to helping Lebanon protect its financial sector. Undersecretary of the Treasury Department David Cohen's visit to Lebanon was proof of this.
According to the diplomat, the US administration is concerned about the fact that "Ayman Gomaa, who was charged last January for money laundering and who was at the heart of the Lebanese Canadian Bank issue, is once again involved with the people who have recently been named. According to information obtained by the US administration, Gomaa is part of a large network, so the US Treasury is working to uncover and combat that network. Abbas Harb's involvement in transferring funds from Ayman Gomaa to an account under his own name — and the fact that the account originated in a Lebanese bank — raises concerns about the illicit operations taking place in Lebanon’s financial sector. At the same time, it also leads to further cooperation and coordination with the central bank to uncover such operations."
The source believes that "it is important for Lebanon's Central Bank to take appropriate measures to combat money laundering and drug trafficking, as well as sanctions evasion and disengagement with certain terrorist groups," noting that the US Treasury Department will continue working to protect the US financial sector. They will continue to communicate with the Central Bank and follow up on the Lebanese Canadian Bank issue and the illegal activities taking place in the banking sector."
Does this indicate that the Lebanese banking sector will be further targeted? Or is the US targeting Syria — because it evaded international sanctions — through Lebanon? The diplomat said that the recent decisions are only intended for Ayman Gomaa in particular and to the activities he is carrying out for Hezbollah. The source adds, "But we are still cooperating with Lebanon on surveillance to prevent Syria and Iran from evading international sanctions."
In summary, despite the willingness of the US diplomat to express his country's concern over the ongoing illegal financial operations, the US Treasury Department's new decisions, which are linked to a Lebanese bank, gives several indications:
First, that Lebanon is still under the US microscope. Despite all of the efforts made by the monetary authorities towards internal monitoring and control of operations across the Lebanese banking system, individual cases are still getting Lebanese banks involved in charges of money laundering, financing terrorism and financing Hezbollah.
Second, that the ban imposed by the US is not only limited to the US institutions, but affects all banking transactions with the outside world, including with Lebanon.
Third, that Governor of the Bank of Lebanon Riad Salameh’s visit to both Washington and New York and the talks he held about following-up on the Lebanese Canadian Bank issue did not prevent the US Treasury from making these decisions, since those who were named are affecting the US financial sector.
Fourth, that Lebanon, with all its political and monetary power, is called upon to take these decisions seriously in order to avoid any risks that may affect its banks in light of growing international pressure on both Syria and Iran.