In addition to blowing up the facade of BLOM Bank, to make a point, regarding its distaste regarding the closing of the closing of Hezbollah-linked bank accounts, the designated terrorist organization has now demanded a concession from Beirut bankers and the Central Bank (Banque du Liban), that could result in the complete isolation of Lebanon from the US, and possibly the world's, banking systems.
Hezbollah wants a "guarantee" that Shi'ites (obviously Hezbollah party members, and their associates) will have access to bank accounts, and it affirms that it will be submitting a white paper, detailing how such a program should be conducted, to Riad Salameh, the director of the Central Bank. On his part, Salameh reportedly has retreated from the statements made during his interviews with the press, saying that no Hezbollah member whose account is closed will be able to open another one in Lebanon. He is now saying his comments were "taken out of context." It sounds ominously like he is under intense pressure to retreat from his stated position.
The problem is that, should US regulators see that Hezbollah members ( and not just those with OFAC sanctions entered against them) have accounts in Beirut, in today's zero-tolerance climate, Treasury could bar the offending banks from accessing the US banking structure, close all their correspondent accounts, and even freeze assets. Such a move would isolate those banks, and probably be a death sentence, as clients, who could not trade with US customers, would fee in droves.
Some Lebanese banks may soon face a difficult choice: obey the American HIFPA law, and take on Hezbollah, a battle which they cannot win, or disregard it, and pay the price, when sanctions are imposed. What will they do ?
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