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Lebanese Banks Abide By US And EU Sanctions Against Syria

Lebanese Banks Abide By US And EU Sanctions Against Syria

The Lebanese banking sector is implementing sanctions against Syria, Lebanese Prime Minister Najib Miqati told the daily al-Hayat of 10 February. Syria’s allies inside the government “cannot force the banking sector in Lebanon to violate these sanctions because that would be contrary to the interest of the sector,” he told the daily, stressing that it is his responsibility to preserve stability internally and Lebanon’s relations with all countries, except Israel. “I am not willing to pick up a quarrel with anyone,” he added, as he boarded a plane in Beirut on his way to France for a state visit. Mr Miqati explained that during the visit President Nicolas Sarkozy and the French government were fully aware of the “political geography” of Lebanon – a reference to the historical close ties with Syria. Mr Sarkozy had also shown understanding towards Lebanon’s policy to dissociate itself from the unrest in Syria, he added. The Governor of the Central Bank of Lebanon (CBL) Riad Salamah, who accompanied Mr Miqati to Paris, is said to have assured the French leadership that the Lebanese banking sector was implementing the US and EU sanctions against Syria, and that he intends to be very cautious so that the “sector does not suffer a setback because it is a crucial sector for the country.”

The prime minister’s position with regard to international sanctions against Syria appears to be at odds with the official position of Lebanese Foreign Minister 'Adnan Mansur, who declared on a number of occasions that Lebanon would not enforce the Arab League’s economic sanctions against Syria. Last November the League imposed economic sanctions on the Syrian regime because of its violent crackdown on demonstrators. The sanctions include a freeze on all assets of the Syrian government held in Arab countries, a halt in transactions with the Central Bank of Syria ( CBS ) and the Commercial Bank of Syria and an end to Arab government funding for projects in Syria (MEES , 5 December 2011). More recently, on 12 February the League reiterated in Cairo its condemnation of the Syrian repression of protestors and called for the tight implementation of economic sanctions by the League members against Syria and the ceasing of trade dealings with the regime, with the exception of transactions related directly to the Syrian people.

Although Mr Mansur’s remarks mainly referred to the Arab League sanctions, a banking source told MEES that by last September and October, Lebanese banks had already started implementing the US and EU sanctions quietly, and according to recent reports more international pressure on the Lebanese banks is being exerted to make them abide by the sanctions. Last November the US sent a clear message to Syria’s neighbors, Lebanon and Jordan, that they should ensure that their financial sectors are not used by Syria to evade US and EU financial sanctions (MEES, 21 November 2011). Mr Salamah told a banking conference in Beirut in January that no individual or institution on the US or EU sanctions lists could do business with Lebanese banks. But this will create problems because a number of major Lebanese banks had established joint venture banks in Syria with local interests, following the opening up of the Syrian banking sector in the early 2000s after President Bashar al-Asad came to power.

© Copyright MEES 2012.

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