Lebanese officials and banks assured a senior U.S. official Tuesday that Lebanon was fully committed to all financial sanctions on Syria and Iran.
“We told U.S. Treasury Undersecretary for Terrorism and Financial Intelligence David Cohen that Lebanese banks have no intention to have any kind of transaction with Syrian and Iranian financial institutions,” a banker who attended the meeting with the U.S. official told The Daily Star.
Cohen is touring a number of states in the region to ensure that all countries in the Middle East fully comply with economic and financial sanctions on Syria and Iran. Banks and financial institutions which fail to abide by these measures may be the target of sanctions by the U.S. and Europe.
Prime Minister Najib Mikati, Central Bank Governor Riad Salameh and other Lebanese officials also reiterated during their talks with Cohen that local banks have frozen all types of deals with the Syrian central bank in compliance with measures adopted by Washington the European Union.
A banker, who spoke on condition of anonymity, told the paper that Lebanese banks operating in Syria have already downsized their operations following the crisis which engulfed the country. “At least 50 percent of the deposits in banks operating in Syria have dropped since the turmoil started a year ago,” the banker said.
The banker stressed that all the assets held by Lebanese banks in Syria represent less than 3 percent of the balance sheets of the banking sector.
“We should also keep in mind that exiting the Syrian market is not easy because only the Syrian central bank has the power to accept the departure of foreign banks in the country,” the banker added.
The banker added that more than 50 percent of the banks operated by Lebanese are owned by Syrian investors. The U.S. Embassy said in a statement that Cohen met with Mikati, Salameh and a number of representatives from the Lebanese banking community. It added that this was Cohen’s first visit to Lebanon.
“In his meetings, Undersecretary Cohen discussed the steps Lebanon should take to ensure a transparent and well-regulated financial sector for Lebanon’s continued prosperity. He also stressed the need for authorities to protect the Lebanese financial sector from potential attempts to evade U.S. and international financial sanctions. He reiterated that it was important to ensure instability in Syria does not undermine the Lebanese financial sector,” the statement said.