On Tuesday, the Banque du Liban (BDL) issued Circular No. 170, banning the direct or indirect entry of funds linked to Lebanese organizations subject to international sanctions, especially those imposed by the US Office of Foreign Assets Control (OFAC).
The central bank cautioned that permitting such financial flows could endanger the ties between Lebanese banks and their foreign correspondents, particularly US institutions responsible for processing dollar transactions.
However, the BDL emphasized that its responsibility is limited when dealing with sanctioned organizations beyond its jurisdiction or supervisory authority. In such cases, responsibility lies exclusively with the state and the relevant ministries. The central bank also rejected any attempt to attribute to it powers not conferred by the Lebanese Code of Money and Credit.
OFAC, a branch of the US Treasury Department, enforces Washington’s foreign policy and national security priorities through economic and financial sanctions. It freezes assets and bans transactions involving individuals, organizations, banks, companies, or states linked to terrorism, money laundering, drug trafficking, or serious human rights violations.
In practice, any entity or individual placed on OFAC’s blacklist is cut off from US dollar transactions and the American banking system – a restriction with worldwide repercussions given the dollar’s role as the leading global currency.
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