Lebanese bank sanctioned by US denies doing banking activities for Hezbollah

Jammal Trust Bank vows to take steps ‘to clear its good name,’ says it complies with all laws meant to prevent terror financing

People walk past a branch of Jammal Trust Bank in Beirut, Lebanon, August 30, 2019. (AP Photo/Bilal Hussein)
People walk past a branch of Jammal Trust Bank in Beirut, Lebanon, August 30, 2019. (AP Photo/Bilal Hussein)

A Lebanese bank targeted by the US Treasury Department for “knowingly facilitating banking activities” for the Hezbollah terror group denied the charges Friday, saying it abides by international laws.

The Treasury’s Office of Foreign Assets Control sanctioned Jammal Trust Bank on Thursday and added it to its list of global terrorist organizations.

Lebanon Finance Minister Ali Hassan Khalil tweeted that the country’s banking sector will be able to overcome the repercussions of the US Treasury Department’s decision, adding that deposits of the bank’s clients will be safe.

The bank said in a statement that it learned about the sanctions “with great surprise” and “denies each and every allegation” on which the Treasury based its action.

The statement also said the bank is committed to “abiding strictly by Central Bank of Lebanon rules and regulations, as well as all international rules and regulations on countering money laundering and financing of terrorism.”

The bank said it shall take appropriate steps in order “to clear its good name,” adding that it would appeal the Treasury’s decision.

In this photo from November 12, 2010, Hezbollah fighters parade during the inauguration of a new cemetery for their fighters who died in fighting against Israel, in a southern suburb of Beirut, Lebanon. (AP Photo/Hussein Malla, File)

The head of Lebanon’s central bank, meanwhile, told Reuters that it will guarantee deposits at the bank that are not subject to sanctions.

The Association of Banks in Lebanon said in a statement Thursday night that it regrets the decision, adding that this will not have any effects on the country’s banking sector.

In addition to the sanctions on Jamal Trust Bank, the US, in partnership with Oman, announced sanctions Thursday against individuals accused of moving tens of millions of dollars between Iran’s elite Quds Force and the military wing of the Gaza-ruling terror group Hamas.

Senior US administration officials, speaking on condition of not being identified, told reporters that the two actions were above all meant to send a signal.

The bid to squeeze Jammal “should be seen as a warning shot that Hezbollah and its Iranian puppet masters should keep their hands off Lebanese financial institutions,” one official said, calling this part of a strategy to “choke off every last avenue of funding.”

Although Jammal is only a modest sized bank in Lebanon, it is the “bank of choice” for Hezbollah, another official said.

A third senior official called the sanctions a reflection of the “gloves off approach” by US President Donald Trump against Hezbollah.

Prime Minister Benjamin Netanyahu cheered the move and urged other countries to act against “Iranian aggression in the Middle East.”

Sympathizers of the Shiite Hezbollah terror group gather to watch the transmission on a large screen of a speech by the movement’s leader Hasan Nasrallah, in the town of Al-Ain in Lebanon’s Bekaa valley on August 25, 2019. (AFP)

“This is an important step designed to put pressure on Iran and its proxies, which are acting against the State of Israel,” he said.

The imposition of sanctions came as tensions between Israel and the Iran-backed group ratcheted up this week after an Israeli strike on an alleged Iranian drone attack plot in Syria and a mysterious UAV explosion at a Hezbollah office in Beirut attributed to Israel.

For years, the US has imposed sanctions on officials from Hezbollah, which Washington considers a terrorist organization.

The Treasury Department last month targeted a Hezbollah security official and two members of Lebanon’s parliament suspected of using their positions to further the aims of the Iran-backed terrorist organization and “bolster Iran’s malign activities.”

In 2011, the Treasury Department accused the Lebanese Canadian Bank of laundering money from drugs and other operations for clients tied to Hezbollah.

Two years later, the bank agreed to pay US authorities $102 million to settle the charges.

Most of the assets of the Lebanese Canadian Bank were later acquired by the Lebanese subsidiary of France’s Societe Generale.

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