Report: U.S. Intensifies Investigation into Banking Deals in Lebanon
The United States is intensifying its scrutiny of Lebanon's financial system over concerns that Syria, Iran and Hizbullah are using Lebanese banks to evade international sanctions and fund their activities, The Wall Street Journal reported.
“The Treasury Department and Drug Enforcement Administration are continuing an aggressive probe into an alleged Hizbullah-linked money-laundering operation,” the Journal quoted U.S. officials as saying.
“They allege the operation involves hundreds of millions of dollars in drug-sales revenues from a Lebanese narco-trafficker that they say have gone” to Hizbullah, it said.
Senior U.S. officials told the Journal that the Treasury is also pressing Lebanese financial regulators to more closely monitor local banks that have operations in Syria and Iran.
"We're concerned about Lebanon being used as a channel by Syrians attempting to evade sanctions," said a senior Treasury official involved in Middle East policy.
But Central Bank governor Riyad Salameh told the Journal that deposits by Syrian nationals in Lebanese banks as well as loans to Syrians by these banks have decreased by 40 percent over the past 15 months.
Lebanon took such action after the Treasury accused the Lebanese Canadian Bank (LCB) of laundering hundreds of millions of dollars on behalf of the drug lord with alleged links to Hizbullah.
The Central Bank interfered, allowing the Lebanese subsidiary of Societe Generale (SGBL) to acquire the assets of LCB.
But the U.S. official said the Treasury and the DEA are still concerned that hundreds of LCB suspicious accounts have been passed on to other financial institutions based in Lebanon.
There are also concerns that the bank’s former executives continue to operate in Lebanon's banking system, including at SGBL, they said.
"We're still working with the Lebanese authorities to understand what happened after we issued" the notice last year, said a senior Treasury Department official briefed on the case. "We still have a finding on the books."
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