Washington showing Lebanese Banks who’s boss

Over the past two years, US pressure on Lebanese banks reached unprecedented levels. The main indicator is the increased frequency of visits from US treasury envoys to Lebanon.

The latest such visit was paid by Neal Steven Wolin, US deputy secretary of the treasury. Before him came Daniel Glaser, assistant secretary for terrorist financing, who followed David Cohen, under-secretary for terrorism and financial intelligence.

All three are highly ranked officials in financial intelligence. They have been visiting Lebanon repeatedly since the beginning of the Syrian crisis, or more precisely, ever since the Lebanese Canadian Bank scandal broke in February 2011, when the bank was designated a “primary money laundering concern” and accused of funneling funds to Hezbollah by the treasury department.

Throughout this period, successive US ambassadors to Lebanon have also been following up on these issues.

US officials have become accustomed to tailoring their demands on Lebanon’s monetary authorities according to their political priorities. They routinely discuss the details with the Governor of the Central Bank of Lebanon (BDL) Riad Salameh, the board of directors of the Associations of Banks in Lebanon (ABL), and sometimes the sitting prime minister.

Prior to the last two years, US demands would have passed through undeclared channels, contrary to the publicity granted to today’s meetings and their particulars. This is in addition to the threatening statements that follow each visit, whether announced in Beirut or on their home soil.

The visits and related pressures have set “the rules of the game” between Lebanese banks and the US.

They told us that the US treasury will deal with everyone on the basis of either with us or against us.“When you get to know the rules of the game, then you will be able to realize the extent of pressure from the Americans, where they will take it, and the nature of the red, green, and yellow lines,” an ABL board member told Al-Akhbar.

But it seems that the banker’s association and monetary authorities in Lebanon only understood these rules following Wolin’s recent visit. He had a single message to deliver: the Lebanese banking sector will not be targeted, but any bank or financial institution that facilitates the funding of terrorism will not be tolerated.

This message was seen as a positive stance toward Lebanon, according to one BDL vice-governor, especially because it was delivered in a “polite” manner to Prime Minister Najib Mikati, Salameh, and ABL.

But within the rules of the game, the more serious and significant message delivered during this visit was kept concealed:

“They told us that the US treasury will deal with everyone on the basis of either with us or against us. Opening accounts for Syrians, Iranians, or Hezbollah members and their relatives means that we are working against them [the US],” a banker, speaking on the condition of anonymity, explained to Al-Akhbar.

What caught the banker’s attention was that the US delivered the same message to political and monetary authorities in neighboring countries, in an attempt to tighten the financial embargo on the Syria-Iran-Hezbollah axis.

But these neighboring countries, which include Jordan, Egypt, and the UAE, do not apply US dictates in the same manner as Lebanon.

In Lebanon, the BDL has issued dozens of circulars restricting the work of currency traders suspected of involvement in money laundering for Hezbollah, and has asked parliament to impose additional restrictions on the import of cash money.

While other countries received the same message from Washington, they have not been as rigid in implementing these new rules of the game as Lebanon.BDL also issued a verbal request for banks not to open accounts for citizens of Syria, Iran, and Sudan. As a result, it has become almost impossible for these nationals to open an account in Lebanon.

Additionally, for the past year, Bank Saderat Iran has been looking for another bank in Lebanon to act as its clearing center in the areas where they do not have branches – without success.

Moreover, BDL is preparing to implement a disclosure mechanism for account holders from the US to ensure that they do not evade taxes. This is part of the Foreign Account Tax Compliance Act, or FATCA.

While other countries received the same message from Washington, they have not been as rigid in implementing these new rules of the game as Lebanon.

The banker gave the example of Jordan, which has yet to abide by Washington’s instructions and has been receiving a substantial inflow of smuggled Syrian deposits. In fact, Jordanian currency traders accept all denominations of the Syrian pound.

Egypt hosts a considerable proportion of Syrian refugees who are hoping to move on to the UAE, and Dubai – an important Iranian trading post – is teeming with wealthy Syrians.

The banker said this difference in implementation is largely due to “the existence of positive and open relations between authorities in these countries and the US.”

“This openness means that both sides are cooperating on more than one level, especially in intelligence. The US treasury gets its information from these countries through intelligence-sharing mechanisms,” he continued.

“Therefore, the Americans do not need to be strict there. They can leave it as a pressure valve that can be monitored closely. This is not required in Lebanon, where they usually get what they want – gradually and in several doses,” he explained.

Al Bawaba

  • 5thDrawer

    ‘The West’ … already controlled by huge amounts of paperwork that Americans require to do anything – (even buying a loaf of bread requires a receipt) – became a way for American governments to track their own citizens on the subject of taxation. (tax laws got more American Crooks than cops did.)
    Perhaps that’s one reason their taxes are so low – aside from not providing things like overall health-care – because their IRA is deathly hard on anyone who missed paying the taxes the IRA thinks should be paid.
    Over the last 100 years with various wars and concepts of ‘world economy’ and ‘big business’, etc, etc, etc ‘the west-world’ has allowed Americans to follow the money everywhere … most of which, at least paperwork for, flows through an American bank in New York at one point in it’s travels. (forests die for computer-work)
    That is to say, what they feel means being ‘with us’ means. (You let us check your economy and what your people buy with their earned dollars, and we’ll consider you a friend.) Especially in this computer-age, that helps advertisers to peg markets as well, of course … the information they collect is largely available to wonderfully-admired big-money corporations who can slide in cheaply and replace local smaller businesses. (The Walmart method.) At the same time, it provides an overview of what governments elsewhere are up to, and gives Americans the ‘clout’ to ‘suggest’ how banking should be done by others – when they wish to track those they consider ‘bad’. (See Switzerland)
    In that sense at least, then, much of the world has become ‘with us’ … and most often it has been seen to be ‘good business’ practice for others, unless one notes things like the ‘housing-bubble-screw’ of 2009 in an American banking system which is more UN-regulated than ANY others. (see ‘lobbyists’)
    So Americans must often look at themselves and consider exactly what is meant by ‘freedom of the individual’ in their own system where paranoia reigns largely (see words like ‘patriot act’, ‘homeland security’, ‘anything-defence’, etc.) and too often the individual is bolloxed by ‘regulations’ imposed simply to track money-flow for their feeling of ‘security’.
    ‘Sharia’ systems do not work the same way, of course, and ‘the west’ and ‘the middle east’ surely do not understand each other on the differences in basic concepts. Where only one ‘Ruling Entity’ decides how money will be doled out and moved around, it is a huge gap.
    Lebanon has managed to bridge it to a large extent, which is a good thing. But Americans make no friends who feel ‘with them’ when an individual cannot send needed money from anywhere else in the world to a sick or hungry relative in Lebanon (or anywhere) because a New York bank, in it’s paranoia, stops it’s movement. And usually those are amounts of money that wouldn’t buy the box of Cuban cigars of an ‘arms dealer’ – let alone an anti-aircraft missile.
    ‘The Middle East’ had better get used to paperwork ….

    • 3AlawiMinHouran

      in the west, paperwork is requested for refugees like you who sold their country; when america decides that her agents saoudis and iranis have to fight you will not see it on any paper; of course refugees are not involved in the process; you do not need to be refugee by law to be a refugee: many who betrayed Lebanon and gossip about it like you proudly brag are naturalised americans or other yet westerners will always consider you dirty lebanese; by marginalising Lebanon, you in particular and this blog in general, you accentuate this process where lower western cultures keep on considering Lebanon as a terrorist country while they are themselves instigators of terrorism as well as terrorist by proxies; i may permit myself to call you one of those proxies

      • 5thDrawer

        Well MiniAlawi, aside from not really understanding what I was saying but having some ‘usual fit’ and taking aim at only the last line, you can write anything into the margins here I suppose, including that you think Im a refugee from something and try to make it into a personal shot.
        Either that, or you don’t like my shots at the ‘American way’ and are defending them. 🙂

        • 3AlawiMinHouran

          sorry but i do not know who you are and i have no personnal issues with you nor with what you write; while crossing over the writings in this blog i was shocked to find some people claiming to be lebanese insulting Lebanon in such a gross way and unfortunatelly you are one of them; actually you are the most degrading and dishonoring to Lebanon than many of the declare israelis, iranians and sunnis in this blog; i just wanted to rtemind you that even though you live in the west, even though you may have a green card or spanish nationality or any western nationality, you will be considered a foreigner in their eyes toill the end regardlessof what you do and regardless of what you pretend to like them and to imitate them; that is of course if you are lebanese which i am seriously starting to doubt

      • daber

        yahoo alawl 5th is goood mr yu no good to him mr

  • 5thDrawer

    ‘The West’ … already controlled by huge amounts of paperwork that Americans require to do anything – (even buying a loaf of bread requires a receipt) – became a way for American governments to track their own citizens on the subject of taxation. (tax laws got more American Crooks than cops did.)
    Perhaps that’s one reason their taxes are so low – aside from not providing things like overall health-care – because their IRA is deathly hard on anyone who missed paying the taxes the IRA thinks should be paid.
    Over the last 100 years with various wars and concepts of ‘world economy’ and ‘big business’, etc, etc, etc ‘the west-world’ has allowed Americans to follow the money everywhere … most of which, at least paperwork for, flows through an American bank in New York at one point in it’s travels. (forests die for computer-work)
    That is to say, what they feel means being ‘with us’ means. You let us check your economy and what your people buy with their earned dollars, and we’ll consider you a friend. Especially in this computer-age, that helps advertisers to peg markets as well, of course … the information they collect is largely available to wonderfully-admired big-money corporations who can slide in cheaply and replace local smaller businesses. (The Walmart method.) At the same time, it provides an overview of what governments elsewhere are up to, and gives Americans the ‘clout’ to ‘suggest’ how banking should be done by others – when they wish to track those they consider ‘bad’. (See Switzerland)
    In that sense at least, then, much of the world has become ‘with us’ … and most often it has been seen to be ‘good business’ practice for others, unless one notes things like the ‘housing-bubble-screw’ of 2009 in an American banking system which is more UN-regulated than ANY others. (see ‘lobbyists’)
    So Americans must often look at themselves and consider exactly what is meant by ‘freedom of the individual’ in their own system where paranoia reigns largely (see words like ‘patriot act’, ‘homeland security’, ‘anything-defence’, etc.) and too often the individual is bolloxed by ‘regulations’ imposed simply to track money-flow for their feeling of ‘security’.
    ‘Sharia’ systems do not work the same way, of course, and ‘the west’ and ‘the middle east’ surely do not understand each other on the differences in basic concepts. Where only one ‘Ruling Entity’ decides how money will be doled out and moved around, it is a huge gap.
    Lebanon has managed to bridge it to a large extent, which is a good thing. But Americans make no friends who feel ‘with them’ when an individual cannot send needed money from anywhere else in the world to a sick or hungry relative in Lebanon (or anywhere) because a New York bank, in it’s paranoia, stops it’s movement. And usually those are amounts of money that wouldn’t buy the box of Cuban cigars of an ‘arms dealer’ – let alone an anti-aircraft missile.
    ‘The Middle East’ had better get used to paperwork ….

    • 3AlawiMinHouran

      in the west, paperwork is requested for refugees like you who sold their country; when america decides that her agents saoudis and iranis have to fight you will not see it on any paper; of course refugees are not involved in the process; you do not need to be refugee by law to be a refugee: many who betrayed Lebanon and gossip about it like you proudly brag are naturalised americans or other yet westerners will always consider you dirty lebanese; by marginalising Lebanon, you in particular and this blog in general, you accentuate this process where lower western cultures keep on considering Lebanon as a terrorist country while they are themselves instigators of terrorism as well as terrorist by proxies; i may permit myself to call you one of those proxies

      • 5thDrawer

        Well MiniAlawi, aside from not really understanding what I was saying but having some ‘usual fit’ and taking aim at only the last line, you can write anything into the margins here I suppose, including that you think Im a refugee from something and try to make it into a personal shot.
        Either that, or you don’t my shots at the ‘American way’ and are defending them. 🙂

        • 3AlawiMinHouran

          sorry but i do not know who you are and i have no personnal issues with you nor with what you write; while crossing over the writings in this blog i was shocked to find some people claiming to be lebanese insulting Lebanon in such a gross way and unfortunatelly you are one of them; actually you are the most degrading and dishonoring to Lebanon than many of the declare israelis, iranians and sunnis in this blog; i just wanted to rtemind you that even though you live in the west, even though you may have a green card or spanish nationality or any western nationality, you will be considered a foreigner in their eyes toill the end regardlessof what you do and regardless of what you pretend to like them and to imitate them; that is of course if you are lebanese which i am seriously starting to doubt

        • 3AlawiMinHouran

          sorry but i do not know who you are and i have no personnal issues with you nor with what you write; while crossing over the writings in this blog i was shocked to find some people claiming to be lebanese insulting Lebanon in such a gross way and unfortunatelly you are one of them; actually you are the most degrading and dishonoring to Lebanon than many of the declare israelis, iranians and sunnis in this blog; i just wanted to rtemind you that even though you live in the west, even though you may have a green card or spanish nationality or any western nationality, you will be considered a foreigner in their eyes toill the end regardlessof what you do and regardless of what you pretend to like them and to imitate them; that is of course if you are lebanese which i am seriously starting to doubt

      • daber

        yahoo alawl 5th is goood mr yu no good to him mr