A senior United States Treasury official visited Beirut on Monday to sell Lebanon on recent US sanctions targeting Iranian-backed Hezbollah group, Lebanon’s central bank governor said.
Treasury Department Assistant Secretary Marshall Billingslea met with the prime minister and the speaker of parliament, as well as officials from the Association of Banks in Lebanon and the central bank governor.
Central Bank chief Riad Salameh played down reports in local media that the US would impose further sanctions on Lebanon’s dollar-strapped banking system saying that Billingslea “is not coming here to squeeze Lebanon.”
A statement from the US embassy in Lebanon said Billingslea would encourage the Lebanese government to distance itself from Hezbollah and “other malign actors attempting to destabilize Lebanon and its institutions.”
Hezbollah, considered a terrorist organization by Israel and the United States, is also a major political actor in Lebanon and a key government backer in war-torn Syria.
Hezbollah holds three cabinet seats, and along with its allies has more power than ever in the parliament and government. It is also among the most effective armed groups in the region, extending Iran’s influence to Israel’s doorstep. Domestically, the group’s power exceeds that of the Lebanese armed forces.
Last month, the Treasury’s Office of Foreign Assets Control sanctioned Jammal Trust Bank, accusing of acting as a key financial institution for Hezbollah.
The Treasury said the bank was used for enabling the Iranian proxy group’s financial activities, “including sending payments to families of suicide bombers.”
The bank denied the US charges about “knowingly facilitating banking activities” for Hezbollah operations, while the Association of Banks in Lebanon assured the public the US sanctions would not affect the country’s banking sector.
But less than a month after the measures were announced, the Jammal Trust Bank self-liquidated.
The Lebanese state-run National News Agency quoted Salameh as saying last week that the value of the bank’s assets and of its contribution to the national deposit guarantee body were sufficient “in principle” to pay back all deposits and fulfill obligations.
Iran-backed Hezbollah has been a US-designated terrorist group since 1997 and fights alongside the regime of Syrian President Bashar Assad in the neighboring country’s civil war. It is Tehran’s most potent proxy on the regional scene and also wields significant influence in Lebanese politics.
One of a handful of Shiite-owned Lebanese banks, JTB had specialized in micro-credit in remote areas of the country’s Shiite-majority south, which is also Hezbollah’s heartland.
For years, the US has imposed sanctions on officials from Hezbollah, which Washington considers a terrorist organization.
In July, the US 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.