BEIRUT: Beirut will abide by a U.S. law that imposes sanctions on banks that knowingly do business with the militant Hezbollah group, Lebanon’s Central Bank governor said Monday. Riad Salameh told the Associated Press in an interview that bank officials are now studying regulations issued Friday in Washington by the U.S. Treasury Department.
U.S. President Barack Obama signed the Hezbollah International Financing Prevention Act on Dec. 18. Since then, Lebanese officials and bankers have been flying to Washington to discuss the move with American officials.
Hezbollah, a powerful Lebanese group that has members in Parliament and the Cabinet, is considered a terrorist organization by the United States.
Many in Lebanon are worried that the U.S. legislation will have negative effects on the Lebanese banking sector, which is one of the most active industries in the tiny Arab country. Several Lebanese bankers and the head of the Lebanese banking association did not return AP’s requests for interviews.
Salameh’s comments at the Banque du Liban headquarters in Beirut came three days after the U.S. Treasury Department’s Office of Foreign Assets Control issued regulations aimed at implementing the Hezbollah financing prevention act.
“Our departments are studying the regulations so that there will be commitment by the banking sector to the law in accordance with the regulations,” Salameh said.
Asked whether banks dealing with Hezbollah Cabinet ministers or legislators who get paid from the state will be affected, Salameh said that the law covers “significant transactions” and does not mention salaries.
The U.S. regulations say Washington will target those “knowingly facilitating a significant transaction or transactions for” Hezbollah and those “knowingly facilitating a significant transaction or transactions of a person identified on the List of Specially Designated Nationals and blocked persons.”
OFAC’s list includes names of officials, businessmen and institutions that the U.S. says are linked to Hezbollah. The list includes Hezbollah leader Sayyed Hasan Nasrallah and top military commander Mustafa Badreddine as well as some businessmen. The list also includes the group’s Al-Manar TV and Al-Nour Radio.
Nasrallah said in December 2015, when the law was signed, that his group does not deal with Lebanese or foreign banks.
“We have no money in Lebanese banks, neither in the past nor now,” Nasrallah said in a speech. “We don’t transfer our money through the Lebanese banking system.”
Salameh said that he was discussing with Lebanese banks how to implement the law in “a way that does not harm the Lebanese people.”
U.S. State Department spokesman John Kirby told reporters in Washington Friday that “these regulations are a continuation of the U.S. government’s efforts against Hezbollah and they give the U.S. government additional sanctions authorities to go after this terrorist organization and its support apparatus worldwide.”
He added that “the safety, soundness and security of the Lebanese financial system is a great priority to the United States, and the U.S. government will act only on the strongest evidence and the most solid evidence in our efforts to isolate Hezbollah from the international financial system.”
“We’ll do it in such a way that will support the Lebanese economy, that will support the Lebanese financial system and will not target innocent people,” Kirby said.
Speaking about the Lebanese economy and financial conditions, Salameh said financial flows “toward Lebanon are still positive.”
He added that bank deposits rose more than 4 percent in the first quarter of 2016 compared with the same quarter a year earlier. He said there was no demand to transfer Lebanese pounds to U.S. dollars. The pound has been pegged to the U.S. dollar for more than two decades.
“All this shows that there is confidence and we rule out any [financial] crash in Lebanon,” Salameh said.