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| 16 October, 2017

Lebanese banks safe from sanctions: Central Bank Governor

Lebanon's Central Bank Governor Riad Salameh looks on during  during an interview with Reuters in his office in Beirut, Lebanon July 18, 2016. Picture taken July 18, 2016.

Lebanon's Central Bank Governor Riad Salameh looks on during during an interview with Reuters in his office in Beirut, Lebanon July 18, 2016. Picture taken July 18, 2016.

REUTERS/ Jamal Saidi

Additional sanctions against Hezbollah being drafted by the United States will not affect the Lebanese banking sector, Central Bank Governor Riad Salameh said from Washington over the weekend.

BEIRUT - Additional sanctions against Hezbollah being drafted by the United States will not affect the Lebanese banking sector, Central Bank Governor Riad Salameh said from Washington over the weekend.

After holding talks with the U.S. State and Treasury departments, Salameh expressed relief during an interview with Lebanese TV station LBCI. “What we heard is reassuring,” he said.

“The goals [of the U.S. State and Treasury departments] are to support the Lebanese economy and banking sector,” said Lebanon’s Central Bank governor, who was in Washington for meetings with the World Bank and International Monetary Fund that wrapped up Sunday. There, he was awarded the prestigious shield in recognition for being ranked among the nine best central bank governors in the world by Global Finance Magazine.

The magazine selected Salameh and eight others on Sept. 12 as among the best-ranked central bank governors in the world

Also attending the meetings was Lebanese Economy Minister Raed Khoury, who emphasized Lebanon’s commitment to economic reforms with the aim of giving a much-needed boost to the country. He also spoke about the impact of the Syrian war on Lebanon in terms of the refugee crisis and the effect on Lebanese businesses of closures of export routes through embattled Syria, among other impediments to the country’s economy.

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Both the U.S. Senate and Congress are discussing additional sanction bills against Hezbollah that could dramatically increase the scope and extent of existing U.S. legislation against the party. However, a number of Lebanese official and business bodies have sought to lobby U.S. lawmakers to prevent sanctions having a drastic impact on the local economy.

Salameh added that the U.S. wouldn’t implement any mechanism that would affect the price of the Lebanese pound compared to the U.S. dollar, which could weaken the Lebanese currency and banking sector if it became unstable.

In fact, “international banks are strengthening their ties with Beirut,” Salameh said, stating that this could yield positive results. In a separate interview with the Lebanese business publication Arab Economic News, the central bank governor also noted that Lebanon continues to work with relevant authorities to abide by existing sanctions on Hezbollah.

Lebanon is also working to amend its own laws to comply with the sanctions including the U.S. Hezbollah International Financing Prevention Act of 2015.

During the interview, Salameh appeared optimistic and said he doesn’t expect any new restrictions, and he doesn’t believe anyone is trying to harm Lebanon.

He nevertheless warned that any mistake made in the implementation of the sanctions – or any noncompliance – could harm Lebanon.

Last month, U.S. Congress voted unanimously to amend the Counterterrorism Screening and Assistance Act of 2017, and established a network of sanctions aimed at weakening Hezbollah, a move that has yet to be applied but that experts believe would not be significant given that Lebanon has already weathered most of the blow of the sanctions. Hezbollah Secretary-General Sayyed Hasan Nasrallah admitted last week that U.S. sanctions against the party had affected it, but would not weaken the group’s resolve.

Last week, the U.S. State Department applied the first financial reward for information leading to the arrest of senior Hezbollah commanders in over a decade. On Oct. 10, the U.S. State Department announced an up to $7 million reward for information on Talal Hamiyah, who it says leads Hezbollah’s “international terrorism branch.” Another $5 million is offered for information on Fu’ad Shukr, a member of Hezbollah who runs the group’s military forces in southern Lebanon.





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