Under US pressure, Lebanon tightens screws on money transfers
Lebanon's central bank announced on Friday that money changers and transfer companies must comply with stricter rules as the country faces heavy U.S. pressure to regulate its cash economy and cut off Hezbollah funding.
The move comes days after a visiting U.S. official said his country was determined to cut off Tehran's funding to the group, and after the U.S. Treasury said Iran's Revolutionary Guards had transferred over $1 billion to Hezbollah this year, mainly via money exchange companies.
Lebanese authorities are seeking to disarm Hezbollah, which was badly weakened in a recent war with Israel, and face heavy U.S. pressure to do so more quickly as well as fears of expanded Israeli military action.
As part of efforts "to remove Lebanon from the Financial Action Task Force (FATF) gray list... the central bank of Lebanon today has taken the first step in a series of precautionary measures aiming to strengthen the compliance environment within the financial sector," a central bank statement said.
The FATF in October last year added Lebanon to its "gray list" of nations that are subject to increased monitoring of financial transactions.
The central bank said it was imposing measures "on all non-bank financial institutions licensed by the central bank of Lebanon, including money transfer companies, exchange bureaus" and other firms handling foreign currency transactions and transfers to and from the country.
According to a central bank circular, from December 1, all non-bank financial institutions must "collect information and data linked to their customers and operations" for transactions of $1,000 or more and report them to the central bank.
Institutions must confirm they have collected the required information before carrying out any transaction, the circular added.
The measures are consistent "with international standards on fighting money laundering and terrorist financing, and preventing the misuse of the authorized financial system for suspicious transactions."
Hezbollah has pushed back against moves to stifle the group.
On Thursday, its parliamentary bloc condemned "U.S. efforts to tighten the financial siege on Lebanon" and rejected what it said was Washington's aim of imposing "financial guardianship" on the country.
Lebanon was once known as the "Switzerland of the Middle East" for its thriving banking sector before a crippling financial crisis in 2019.
Confidence in lenders tanked and the cash economy has since boomed, despite international institutions repeatedly warning of the risk of money laundering and terrorism financing.
Source: Agence France Presse
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