Cooperation or consequences: Correspondent banks and Lebanon's gray list placement

Neither the Central Bank of Lebanon nor the commercial banks have received any negative updates from correspondent banks regarding the international arrest warrant against Governor Riad Salameh or Lebanon's placement on the gray list by the Financial Action Task Force. 

 

However, this does not mean these correspondent banks will remain idle in light of the negative financial and monetary assessments and measures affecting Lebanon.

 

Before issuing the international arrest warrant against Salameh and the gray list issue, one correspondent bank suspended its dealings with three Lebanese banks because these banks had not moved their accounts for an extended period.

 

Banking sources stated that the information they received abroad, particularly from the United States, does not indicate any US recommendation for JP Morgan and Citibank to cease dealings with the central and Lebanese banks. 

 

This as the continued operation of these banks, even at the minimum level, allows for external monitoring of any money laundering operations, and ceasing to work with Lebanese banks would make money laundering operations easier.

 

In this context, banking sources also expected that when Lebanon will be placed on the gray list, it would be categorized under the cooperative category, providing an opportunity within a specific timeframe to address its financial and monetary situation. 

 

The danger lies in the failure to address these issues, which would lead Lebanon to be listed as a non-cooperative, resulting in correspondent banks suspending their dealings.