Israel Matzav

Lebanon fears being sanctioned for money laundering for Iran

Lebanese banking officials fear being sanctioned as a result of their banking system being used by Hezbullah to launder money for Iran.

New York-based United Against a Nuclear Iran (UANI) made public last month the results of a three-month, confidential investigation into the influence of Iran and Hezbollah on Lebanon’s banking system and sovereign bond market.

The group says Lebanon’s financial system – including Banque du Liban, the country’s central bank – is being used to funnel massive amounts of illicit cash for Hezbollah and its state sponsor, Iran.

“The Lebanese banking system provides the means by which Iran transacts funds transfers to evade the effects of sanctions and the growing international banking blockade against Iran, and allows the money transfers that support illicit weapons and other transactions, including with Syria,” UANI said.

Lebanese concerns about the report come after several groups – Austria’s Erste Sparinvest, Eaton Vance Investment Managers, Nord Est Asset Management, Ameriprise and Aktia Fund Management – divested from Lebanese sovereign debt securities.

Last week, UANI also called on Advanced Series Trust and its investment adviser Prudential Investments LLC to divest from Lebanese debt securities.

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In response, UANI spokesman Nathan Carleton said that Lebanese banking officials should be concerned about the campaign, noting that several bondholders had divested from Lebanese sovereign debt.

“Lebanon’s Central Bank Governor Riad Salame has said absolutely nothing in response to UANI, and his silence has been deafening,” Carleton added. “He has notably been unable to answer even basic questions about Iran’s role in Lebanon’s banking system, including whether he agrees with Hezbollah’s leadership that its funding comes entirely from Iran.”

Regarding criticisms of UANI’s explanations over the Lebanese sovereign debt to GDP ratio, Carleton said there was “no innocent explanation as to why Lebanon’s numbers are so off-kilter.”

“While we are not privy to private conversations between US and Lebanese officials, we doubt that the US has truly been giving the Lebanese banking system a 100-percent clean bill of health. After all, the idea that Iran funnels money to terrorists through Lebanon is not new, and has been acknowledged by the US before,” Carleton said.

Given Hezbullah's role in the Lebanese government, it's hard to believe that it's not using Lebanon's banking system, and it's unlikely that it's not passing those benefits on to Iran. It's time for Lebanon to come clean and stop supporting terror.

Labels: Hezbullah, Iran sanctions regime, Lebanon, money laundering

posted by Carl in Jerusalem @ 12:29 PM