U.S. queries Syrian deposits in Lebanon
The United States has informally inquired about the Syrian customer deposits in Lebanese banks as part of Washington’s efforts to tighten economic and financial sanctions on Damascus, media reports said.
“U.S. officials asked Finance Minister Mohammad Safadi and Central Bank Governor Riad Salameh about the Syrian deposits in Lebanon banks but made no formal inquiry,” As-Safir newspaper reported from Washington.
Safadi and Salameh are part of a large Lebanese delegation attending the World Bank and International Monetary Fund meetings in Washington. Safadi and Salameh told U.S. officials that Lebanon will abide by any Security Council resolution concerning the banking sector.
The finance minister, according to some press reports, said that Lebanon had no interest to be the financial lung of Syria. “Safadi wanted to tell U.S. officials that Lebanon will not be the secret coffer of fleeing Syrian deposits now or in the future,” an informed source told The Daily Star. But it is not clear whether Salameh responded to the informal requests of U.S. officials.
U.S. President Barack Obama’s administration has slapped tough economic and financial sanctions on the Syrian regime in an attempt to compel Syrian president Bashar Assad to cede power following the bloody crackdown on Syrian protesters who are demanding a regime change in their country.
Europe has also joined the U.S. efforts to isolate Syria politically and economically and has recently banned the import of Syrian oil and gas. There are no official figures on the size of Syrian deposits in Lebanon but unconfirmed reports claimed that Syrian deposits do not exceed $3 billion.
Bankers confidentially say that most of the Syrian deposits in Lebanese banks belong to prominent businessmen and traders who are not associated with the Syrian regime, assuring that this money was deposited in Lebanon many years ago. These bankers stress that Syrian deposits represent a very small portion of the massive deposits in Lebanon and ruled out the possibility of freezing these deposits in the future.
The Central Bank and the Association of Banks in Lebanon have vehemently denied press reports that claimed that over $20 billion in cash have fled from Syria to Lebanon.
“These reports are totally unfounded and unrealistic. The total foreign currency deposits in Syria are close to $3.5 billion only. The average growth of Lebanese banks this year is not expected to reach 8 percent. This refutes all the allegations that Lebanon has received $20 billion from Syria,” the Secretary General of ABL Makram Sader told The Daily Star earlier. Salameh told reporters in Washington that Lebanese banks are not being targeted by the U.S.
“U.S. officials assured us that Lebanese banks will not be targeted individually or collectively and there is no intention to repeat the scenario of the Lebanese-Canadian Bank,” the governor said.
In February, the U.S. Treasury charged the Lebanese-Canadian Bank with money-laundering activity and involvement in terrorist funding. These accusations prompted Salameh to travel to Washington to find an acceptable exit to the Lebanese-Canadian bank crisis. The Lebanese-Canadian Bank was compelled to sell all its assets to SGBL in a deal worth less than $550 million.
The chairman of Byblos Bank François Bassil echoed the same views in an interview with Al-Markazeh agency Monday. “Our banks do not have branches in Syria but rather shares in these banks. Our share in Syrian banks do not exceed 49 percent of the total capital and this is the level set by the Syrian authorities,” Bassil said.
However, Bassil said that Syrian authorities have agreed to raise the Lebanese capital in Syrian banks to $200 million and this represented 60 percent of total deposits. He believes that Syrian banks, thanks to their high liquidity, will not be affected by the political and security incidents in its territories but will surely be affected in the future if the volume of business shrinks dramatically. Bassil admitted that the events in Syria had a negative impact on the Lebanese economy in general.
- Giving up on the EU? Greece, Cyprus look to GCC investors
- Turkish whistleblower: government can hand over any bank to state fund
- Why Israelis are rushing to empty out their Swiss bank accounts
- Wealth in the land of Arab Spring: Egypt's top ten richest men in 2014
- Will the US dollar peg protect GCC currencies?