BEIRUT: A senior U.S. official warned Friday that any financial dealings with Hezbollah carried risks, adding that Lebanons resistance was essential to thwarting any attempts to evade international sanctions on Iran and Syria.Speaking during the second day of the 2013 Annual Arab Banking Conference held at Phoenicia Intercontinental Hotel in Beirut, Daniel Glaser, assistant secretary at the U.S. Treasury Department, said Hezbollahs illicit activities, combined with its ties to sanctioned regimes such as Iran and Syria, made questionable all financial relationships with the political party or its agents.
The risks of engaging in such relationships will only increase as more countries apply sanctions on Hezbollah, which continues to engage in destabilizing military activity in Syria and attacks in Europe, he said.
Glaser warned that regimes such as Syria and Iran would continue to look to Lebanon as a potential financial access point into the global system.
Lebanese financial institutions are an important component of international efforts to isolate these regimes, and Lebanons resistance to any attempts to use Lebanese banks as a gateway to the international financial system is essential, he added.
Glaser noted that the EU had recently moved to include the armed wing of the group on its terrorism blacklist.
This came on the heels of the Gulf Cooperation Councils announcement in June that it would impose sanctions on Hezbollah, he said.
Glaser highlighted the importance of strong collaboration between the private and public sectors in ensuring a hostile environment for terrorists, criminals, narcotraffickers and sanctioned regimes such as Iran and Syria.
He praised the Lebanese government for its efforts in cooperating to address illicit finance threats. We are confident that this collaboration will continue to deepen, he said.
He also urged Parliament to pass legislation for a solid regulatory foundation adopted by the government aimed at closing gaps in the system that are exposed to illicit finance threats.
Glaser believes that Lebanons ability to retain its position as an important regional and international financial center requires continuous efforts to uproot money laundering and other forms of illicit finance in the Lebanese financial system. Failing to do so might allow regulators and financial institutions around the world to draw the conclusion that business with Lebanon comes at too high a risk, he said.
Such concerns came to the fore in February 2011 when the now-defunct Lebanese-Canadian Bank was identified as a financial institution of primary money laundering concern under Section 311 of the U.S. Patriot Act for the lenders role in facilitating the activities of an international narcotics trafficking and money laundering network.
The network moved illegal drugs from South America to Europe and the Middle East via West Africa and laundered hundreds of millions of dollars monthly through accounts held at LCB, as well as through trade-based money laundering involving consumer goods throughout the world, including through used car dealerships in the U.S.
In the case of LCB, Hezbollah benefitted from a global narcotics trafficking network. This should not be surprising given Hezbollahs involvement in a wide range of illicit activities, Glaser said.
These transactions were accomplished with the assistance of dozens of individuals and entities, whose access to the international financial system ultimately centered on a bank in Lebanon, Glaser said.
Glaser urged Lebanese financial authorities to be both vigilant and proactive in cracking down on money laundering, noting that though the criminal activity in LCBs case occurred around the world, the funds were flowing to the Lebanese financial system.
By Zawya
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