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U.S. accuses Lebanese firms of money laundering

US Treasury Under Secretary for Terrorism and Financial Intelligence David Cohen (L) speaks on combating illicit finance in the Middle East during a press conference on April 23, 2013. (AFP PHOTO/Mandel NGAN)

BEIRUT: The U.S. Treasury Department has designated two Lebanese money exchange firms as a “primary money laundering concern,” alleging they may be laundering millions of dollars of narcotics profits and funneling the money to Hezbollah, according to a statement released Tuesday.

The two exchange houses were identified by the U.S. Treasury Department statement as Kassem Rmeiti & Co. For Exchange and Halawi Exchange Co.

The Treasury Department claims Lebanese narcotics kingpin Ayman Joumaa operating in South America moved the proceeds of his drug trade through Rmeiti and Halawi Exchange in Lebanon after the U.S. added the Lebanese Canadian Bank to a blacklist for its operations with Hezbollah.

The two trading firms were designated under section 311 of the U.S. Patriot Act that allows for identifying foreign companies that may be laundering money and supporting terrorism.

Hezbollah is considered a terrorist organization by the United States.

The U.S. blacklisted the Lebanese Canadian Bank two years ago. The Treasury sanctioned Joumaa and others allegedly involved in his narcotics trafficking network in 2011.

“As our actions against the Lebanese Canadian Bank, Joumaa and the two exchange houses today make clear, the Treasury Department, working with our partners across the Federal government, will aggressively expose and disrupt sophisticated multinational money laundering organizations that handle drug proceeds for criminal enterprises including the terrorist group Hizballah,” Tuesday’s statement said. It added that the Treasury’s Financial Crimes Enforcement Network issued an order that requires American financial institutions to report information on any new or attempted transactions by Rmeiti Exchange and Halawi Exchange.

The statement added that another notice, if adopted as a final ruling, would cut off the two exchange houses from the U.S. financial system.

Last month, the secretary-general of the Association of Banks in Lebanon, Markam Sader, told The Daily Star that Lebanese banks were regularly updating the lists of individuals and groups with suspected links to terrorist organizations in line with strict U.S. and European measures to combat terrorist funding.

Sader was speaking a week after a large Lebanese banking delegation visited Washington and held talks with U.S. officials, senators and key figures from the Treasury Department.

Sader added that no members of Hezbollah or its affiliates had accounts with Lebanese banks.

“We have to abide by the U.S. lists even if some of these groups are Lebanese parties,” he said back in April.

“Hezbollah is included on the list and naturally we have to abide by the U.S. measures,” he added.

The Treasury Department said it would “continue to work with the Lebanese Central Bank and other relevant Lebanese authorities to address concerns highlighted by today’s action.”

 
A version of this article appeared in the print edition of The Daily Star on April 24, 2013, on page 1.

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