US-sanctioned Lebanese bank self-liquidates

Lebanese Central Bank approves request for self-liquidation by Jammal Trust Bank, which was placed on US sanctions list for acting as a key financial institution for Hezbollah.

BEIRUT - Lebanon's central bank announced Thursday it had agreed to the self-liquidation request it received from a bank hit by US sanctions last month over ties with Lebanon's Hezbollah.

"Central Bank Governor Riad Salameh announced today he approved the request made by Jammal Trust Bank SAL," the Lebanese state-run National News Agency reported.

On August 29, Washington slapped heavy financial sanctions on JTB, which was classed as a Specially Designated Global Terrorist (SDGT) and accused of acting as a key financial institution for Hezbollah.

The US Treasury said the bank was used for enabling several of the militant group's financial activities, "including sending payments to families of suicide bombers."

The news agency quoted Salameh as stressing that the value of the bank's assets and of its contribution to the national deposit guarantee body were sufficient "in principle" to pay back all deposits and fulfill obligations. Salameh said that all the depositors' funds would be secured on their due date and that the rights of JTB employees would be preserved.

“In light of the US Treasury's decision to list Jammal Trust Bank on the SDGT on 29 August 2019, despite its sound financial position confirmed in the reports of oversight commissioners and its full compliance with local and foreign banking rules and regulations, the Board of Directors had to take the decision of self-liquidation, under full coordination with the Central Bank of Lebanon,” JTB said in a statement.

The bank had denied the US allegations in August after it and its subsidiaries were hit with the US sanctions for funding Hezbollah and the central bank announced that it would probe the lender. The US Treasury described JTB as posing a direct threat to the integrity of the Lebanese financial system.

The bank has 25 branches in Lebanon and representative offices in Nigeria, the Ivory Coast and Britain, its website says.

It is a relatively small lender, with net assets of 1,600 billion Lebanese pounds ($1 billion) at the end of 2017, according to the annual report on the latest year for which data is available.

Washington has sought to choke off Hezbollah’s funding worldwide, with sanctions among a slew of steps against Tehran since US President Donald Trump withdrew last year from a 2015 international nuclear deal with Iran.

Iran-backed Hezbollah has been a US-designated terrorist group since 1997 and fights alongside the regime of Syrian President Bashar al-Assad in the neighbouring country's civil war.

It is Tehran's most potent proxy on the regional scene and also wields significant influence in Lebanese politics.

One of a handful of Shia-owned Lebanese banks, JTB had specialised in micro-credit in remote areas of the country's Shia-majority south, which is also Hezbollah's heartland.