Lebanon among key U.S. targets in Syria sanctions efforts

Lebanon is one of the principal targets of the U.S. Treasury Department’s latest efforts to apply pressure on the finances of Syrian President Bashar Assad’s government, U.S. and European officials told the Wall Street Journal. The Treasury and its partners in Europe and the Middle East are focusing on more than a dozen Lebanese banks that hold branches in Damascus, according to the newspaper Saturday.

The newspaper reported that when Daniel Glaser, the U.S. Treasury assistant secretary for terrorist financing, visited Beirut earlier this month he gave a stark warning that Lebanese banks risk being blacklisted if they are seen as helping Syrian banks evade sanctions – a more direct message than the one Glaser issued to the media at the time in which he said Lebanon must work to avoid attempts by Syria to use its financial sector as a means to evade sanctions. “We were clear that we’re worried that Beirut could be a main conduit for the Syrians,” the newspaper quoted a U.S. official who was briefed on Glaser’s trip as saying.

Officials also said the action taken against the Lebanese-Canadian bank, which was sanctioned over its links to Hezbollah, served as a warning to Lebanon over any perception of its banking sector’s links to the party, which is listed by the U.S. as a terrorist organization, or to Syria or Iran.

There have been fears that sanctions imposed on Syria may impact Lebanon, due to the close relationship between the two countries, and Glaser is not the first official to warn about such dangers. U.K. Ambassador to Lebanon Tom Fletcher has said he hopes the Lebanese economy could distance itself from the Syrian sanctions.

Lebanese bankers and officials have sought to assure investors and the public that the financial sector is safe. Earlier this month Labor Minister Charbel Nahhas said all banks in Lebanon are subject to banking controls and regulations, while Lebanese bankers and officials have told Reuters there is little evidence that money being moved out of Syria during its eight-month crisis has been transferred into Lebanese banks.