US Treasury delegation visits Lebanon amid political shifts; can new leadership fix its financial system?

Report by Bassam Abou Zeid, English adaptation by Karine Keuchkerian

For the first time, a U.S. Treasury Department delegation visited Lebanon, against the backdrop of shifts in three administrations affecting the country: in Washington from Biden to Trump, in Syria from Assad to Sharaa, and in Lebanon from a caretaker government to President Joseph Aoun and Prime Minister Nawaf Salam.

According to U.S. sources, these shifts have helped strengthen efforts to combat money laundering and terrorism financing through Lebanon.

Anti-money laundering and terrorism financing were the main focus of the Treasury delegation’s discussions in Beirut. 

Members of the delegation expressed satisfaction with what they heard from the Central Bank of Lebanon, commercial banks, and licensed money transfer companies, particularly regarding verification of sources of funds and client data in transfer operations.

However, banking sources noted that Lebanon’s continued presence on the Financial Action Task Force (FATF) “grey list” is keeping correspondent banks cautious in their dealings with Lebanese banks. 

This situation, they said, pushes some individuals seeking transfers to resort to informal channels, outside Lebanon’s legitimate financial system. Removing Lebanon from the list, they added, could encourage greater reliance on the official banking sector.

The Treasury delegation also conducted field visits to several money transfer companies, observing operations directly and commending measures taken to apply international financial standards and reduce the cash economy.

According to available information, the delegation also raised concerns with some Lebanese officials about how family members of individuals sanctioned by the U.S. are still able to conduct business and investment activities. 

Some companies, institutions, and shops were described as fronts that contribute to financing Hezbollah. It was unclear if the delegation provided evidence, but discussions took place on how to address such cases even before granting licenses for operations.