Lebanon’s central bank canceled the local license of Bank Saderat Iran as the United States stepped up pressure on countries to sever commercial ties with Tehran. Central Bank Governor Karim Souaid told Bloomberg that the move aims to “send a clear signal to the outside world that we are determined to protect our banking sector from any entity that might expose it to the risk of contamination.”
Souaid framed the revocation as evidence of Lebanon’s determination to protect its banking sector from possible US sanctions. Souaid stressed Lebanon could not afford not to take such measures.
Bank Saderat Iran did not operate as a full-scale commercial bank serving the general public in Lebanon or offer retail banking services in the manner typical of major Lebanese banks. The bank’s operations were restricted to a very narrow and specific scope, namely facilitating certain transfers and financial activities linked to specific networks or entities.
Limited Lebanon role4 of 8 outlets reported it · not in Alkalima Online and 3 more▾Lebanese banks had historically avoided dealing with Bank Saderat Iran because of sanctions imposed on Iran, and financial analyst Mounir Younes said, “The impact on the local market and the Lebanese banking sector is close to zero.” Bank Saderat did not have correspondent banking relationships outside Iran, with its only correspondent bank based inside the country.
Souaid said Lebanon must secure its removal from the Financial Action Task Force’s (FATF) gray list and root out illicit funds and money-laundering operations. The central bank hired a specialised US firm to map Lebanon’s cash economy and identify suspicious financial activity.
What some reports left out
Lebanon hired a specialised US firm to map its cash economy
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FATF exit push4 of 8 outlets reported it · not in Alkalima Online and 3 more▾Lebanon’s negotiations with the International Monetary Fund for a support package have been conditional on cracking down on illicit financial activity and passing sweeping reforms, which the government has promised to deliver. no detailed explanation has yet been issued by the Central Bank of Lebanon about the mechanism for implementing the decision, including the fate of branches, accounts, deposits, employees, and the deadline for winding down ongoing operations.