US sanctions Lebanese brothers Raymond & Teddy Rahme for "corruption and undermining democracy"

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The US Department of the Treasury's Office of Foreign Assets Control (OFAC) has designated two Lebanese brothers, Raymond Zina Rahme and Teddy Zina Rahme, for using their wealth, power, and influence to engage in corrupt practices that contribute to the breakdown of the rule of law in Lebanon.

"The Rahme brothers have been using their business empire and political connections to enrich themselves at the expense of their fellow citizens during a time when the Lebanese people face significant economic distress, an energy crisis, and unprecedented political dysfunction."

According to OFAC, the Rahme brothers have used companies under their control, located both inside and outside of Lebanon, to win multiple government contracts through a highly opaque public tendering process.

"In 2017, the Rahme brothers secured a subcontract to import fuel for use by Lebanon’s state-owned national electricity utility, Électricité du Liban (EdL), and to import fuel on behalf of the Lebanese Ministry of Energy and Water in a bidding process widely reported to be corrupt. While contracted, the Rahme brothers imported tainted fuel, causing significant harm to Lebanese power plants. The Rahme brothers passed off their dangerously compromised fuel product by blending it with other fuels through their UAE-based company, ZR Energy DMCC."

"While the Rahme brothers enriched themselves with this scheme, the Lebanese people suffered, and the country’s infrastructure further deteriorated. Power stations across Lebanon increasingly malfunctioned and daily electricity cuts increased. OFAC has taken this action today pursuant to Executive Order (E.O.) 13441, which authorizes sanctions against persons determined to have taken, or to pose a significant risk of taking, actions, including acts of violence, that have the purpose or effect of undermining Lebanon’s democratic processes or institutions, contributing to the breakdown of the rule of law in Lebanon."

OFAC has also designated ZR Energy DMCC, ZR Group Holding SAL, and ZR Logistics SAL for being owned or controlled by, directly or indirectly, Raymond Zina Rahme and Teddy Zina Rahme. ZR Group Holding SAL operates in the energy, telecommunications, and aviation industries, while ZR Logistics SAL is also owned by the Rahme brothers through ZR Group Holding SAL.

“Today’s action underscores the United States’ commitment to shining a light on corrupt actions, which continue to unjustly impact the Lebanese people,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson. “Now more than ever, the Lebanese government should implement desperately needed economic and political reforms.”

The designation of the Rahme brothers and their companies is expected to significantly impact their ability to do business globally.