Wednesday, November 30, 2011


The Lebanese Government, speaking through its Foreign Minister, has stated that Lebanon will not enforce Arab League sanctions against Syria. This means that any transactions that your bank clients engage in with Lebanese financial institutions, non-bank financial institutions, and that country's private sector could be sanctions evasions for the Syrian Government. Do you really want that exposure ?

Add Arab League sanctions to this the existing EU and US sanctions in place against Syria, and you have a potential perfect storm for violations; your financial institution could be unwittingly facilitating international trade for Syria when it sends payment for goods and services to Lebanese banks, not knowing that they are fronting for Syrian Government interests, the true end user.

You could also run afoul of those Arab League sanctions, and have penalties imposed upon your Middle East branches when it is learnt that you facilitated Syrian sanctions evasion through Lebanon.

Bank officers charged with country risk assessment should evaluate the situation,and make an educated decision on whether to adjust their country risk rating for Lebanon, but, in my humble opinion, any transactions with Lebanese banks are now problematic. You do not know who is in the shadows.

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