Banks deal with Syrian sanctions

ABL committee issues recommendations for banks to cope with sanctions on Syria

Local banks are confused about how to deal with Syrian deposits and transactions, in the wake of the sanctions imposed by the US and Europe, media reports said.

The Committee for Compliance and Fighting Money Laundering at the Association of Lebanese Banks (ABL) has recently issued a number of recommendations for local banks on how to deal with sanctions on Syria.

Among the measures proposed by the committee was to inform the Central Bank’s Special Investigation Committee (SIC) of the details of the accounts of persons and companies included in the sanctions lists.

The committee also recommended that banks refrain from using the US dollar when doing transactions abroad for Syrian clients. The committee also recommended that local banks act with integrity towards the application of the sanctions. This means that banks should not manipulate the names of their Syrian clients in an attempt to avoid the sanctions.

The recommendations of the ABL are not binding for banks, according to a source. “Each bank takes the action which its management believes is convenient for its interests, and for the interests of its clients,” the source said.

Most of the major banks in the country are not opening new accounts for Syrian individuals or companies, according to a banker. These banks have issued internal circulars prohibiting any money transfer in USD for their already existing Syrian clients. They are also refusing to issue checkbooks and credit cards in the USD.

The Central Bank still hasn’t issued any directives to control the dealing of financial institutions with Syrian deposits. The US prohibited, last August, its companies and individuals from doing business with Syrian firms or individuals. The EU followed with sanctions banning the import of Syrian oil and gas. Syria’s largest bank, the Commercial Bank of Syria, is currently under an asset freeze by both the US and the EU.

According to the same source, some other Lebanese banks are still undertaking transactions of Syrian individuals (who are not included in the sanctions). “But the banks are aware that any transactions made for Syrians cannot pass through US banks because of the sanctions and thus must be done through other routes,” the source said.

“Most of the banks in the country have interests in Europe and the US, thus they apply the sanctions to preserve their reputation,” the source said.