Lebanon to Probe Lender Blacklisted by U.S. for Hezbollah Ties

(Bloomberg) -- Lebanon said it will investigate Jammal Trust Bank SAL after the U.S. blacklisted the lender for allegedly facilitating banking for the Iran-backed Hezbollah movement.

The central bank is to monitor the bank’s operations and look to see if it has violated the law, Governor Riad Salameh said in an interview in Beirut on Friday. He said that Jammal Trust was small, with deposits amounting to just 0.5% of the country’s total. All legitimate deposits at the bank would be guaranteed as the probe proceeds, the governor added.

Announcing the blacklisting on Thursday, U.S. Treasury Undersecretary for Terrorism and Financial Intelligence Sigal Mandelker described Jammal Trust as among the “corrupt financial institutions” that posed a “direct threat to the integrity of the Lebanese financial system.”

“This action is a warning to all who provide services to this terrorist group,” Mandelker said in a statement. The bank denied the charges made against it.

The Treasury took separate action against several individuals for moving funds between Iran’s Islamic Revolutionary Guard Corps and Hamas in Gaza, according to the statement.

The U.S. has targeted Hezbollah, a militant Iranian proxy group based in Lebanon, alongside its economic offensive to isolate and weaken Tehran, primarily by imposing sanctions on its oil critical exports.

Salameh said the Treasury had yet to share its findings on Jammal Trust with Lebanese authorities. “We have to wait and see,” he said.

In 2011, Lebanon-based Lebanese Canadian Bank, now defunct, was accused by the U.S. of helping to launder millions for Hezbollah. A month later, the bank announced it was merging with Societe Generale SA’s unit in Lebanon and later paid $102 million to settle a U.S. government lawsuit.

The head of the Association of Lebanese Banks, Salim Sfeir, said on Friday that Washington had said no additional banks would be blacklisted.

To contact the reporter on this story: Dana Khraiche in Beirut at dkhraiche@bloomberg.net

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, ;Lin Noueihed at lnoueihed@bloomberg.net, Mark Williams

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