Report: Salameh Says CNBC Remarks Misinterpreted as BLOM Softens Stance

Central Bank Governor Riad Salameh has announced that his latest remarks to CNBC TV were “taken out of context” as BLOM Bank has softened its stance on the implementation of the anti-Hizbullah U.S. sanctions, a media report said on Tuesday.

During a meeting at the Grand Serail with Prime Minister Tammam Salam and Finance Minister Ali Hassan Khalil on Monday, Salameh clarified that his remarks to CNBC were “taken out of context” and that the interview part attributed to him did not contain an accusation to Hizbullah of being “an illegitimate group that is corrupting the banking sector,” al-Akhbar newspaper reported.

The report comes two days after a bomb exploded outside the headquarters of BLOM Bank in Beirut's Verdun area.

Quoting informed sources, al-Akhbar said BLOM director general Saad al-Azhari told Salameh during a Monday meeting that the bank will “abide by the decisions of the Central Bank's Special Investigation Commission.”

The statement issued after the Grand Serail meeting also carried “concessions by some bankers regarding their previous stances on the mechanism through which the U.S. law should be implemented,” the newspaper added.

“The statement reaffirmed the mechanism that was announced by the Special Investigation Commission in its Memo Number 20, which had been rejected by BLOM Bank,” al-Akhbar said.

BLOM's owners “had several times reiterated that the U.S. law necessitated commitment to the requests of the U.S. banks” that deal with Lebanese banks, the daily added.

BLOM bank has been criticized by some pro-Hizbullah politicians for taking a hard-line position after Lebanese banks began abiding by a U.S. law that sanctions doing business with the Iran-backed Lebanese group.

Authorities say dozens of bank accounts related to Hizbullah's organizations have been closed in recent weeks.

The Association of Banks in Lebanon has meanwhile asked Salameh to “establish a direct channel of communication with Hizbullah” after bankers agreed during their meetings on Monday that “there can be no stability without offering guarantees to Shiites,” al-Akhbar said.

The daily also quoted sources close to Hizbullah as saying that the party will soon submit a paper to Salameh that is aimed at “clarifying any ambiguities regarding the implementation of the Central Bank's memos.”

"Our priority is to keep Lebanon on the international financial map so we have taken a resolution that we will implement that U.S. law in Lebanon and we have put in place a structure to do it to satisfy the objectives of that law and at the same time preserve the rights of the Shiites to have access to the banks," Salameh told CNBC on Wednesday, in remarks published on the TV network's website.

On a wider level, it was crucial for Lebanon to adhere to international financial practices, he said, to improve its credibility in international markets.

"The more you improve your reputation the more funds you get that are serious, we don't want illegal funds in our system. We don't want a few Lebanese to spoil the image of the country or the financial markets in Lebanon," Salameh said.

Hizbullah's Loyalty to Resistance parliamentary bloc lashed out at Salameh in the wake of the interview, noting that his remarks about the suspension of 100 Hizbullah-linked bank accounts reflect an inclination to renounce “national sovereignty.”

And describing the statements as “ambiguous and suspicious,” the bloc said that “everyone must realize that the resistance's supporters and educational and health institutions are immune to any attempt to target them by anyone.”

U.S. President Barack Obama signed the Hizbullah International Financing Prevention Act on December 18 and the Act threatens to sanction anyone who finances the group.

Hizbullah, which has members in parliament and the cabinet, is considered a “terrorist organization” by the United States.

Y.R.