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UANI Calls on the Association of Banks in Lebanon and Secretary General Makram Sader to Clarify Role of Iran, Syria, and Hizballah in Lebanese Banking System.

UANI Poses Five Questions for the ABL and Secretary General Sader

NEW YORK -- On Thursday, United Against Nuclear Iran (UANI) called on the Association of Banks in Lebanon (ABL) and Secretary General Makram Sader to clarify the role that Iran, Syria, and Hizballah play in the Lebanese banking system (LBS).

Secretary General Sader was quoted in a July 5, 2012 Lebanon Daily Star article, in response to UANI's Lebanese banking system campaign, stating that: "There are a number of articles published in prestigious U.S. newspapers that claim that some of our banks are hoarding illegal cash or getting involved in terrorist funding. [None of] these allegations were substantiated by their authors."

In a July 19, 2012 letter to Dr. Makram Sader, Secretary General of the Association of Banks in Lebanon, UANI CEO,Ambassador Mark D. Wallace, wrote:

Our team at United Against Nuclear Iran ("UANI") was surprised by your statement in The Daily Star of July 5thO

Please find below definitive statements that support UANI's concerns, and that were contained in our letter of May 28, 2012 to Governor Riad Salame, head of Banque du Liban ("BDL"). Perhaps you overlooked themOit is imperative that the ABL issue clear and unequivocal responses to the below five (5) inquiries:

1. Do you disagree that Hizballah is the dominant political party in Lebanon?

2. Do you disagree with Hassan Nasrallah when he said:

a. "By the same means that we got weapons and other stuff, money came as wellO All of this has been achieved through Iranian money!"

b. That Iran is the dominant financial supporter of Hizballah?

3. Do you disagree with the statement that "While Iran continues to provide a significant portion of Hizballah's funding, Hizballah has also broadened its sources of financial support in recent years. Hizballah is now heavily involved in a wide range of criminal activity, including the drug trade and smuggling."

4. Do you agree that the international community "cannot hope to apply effective financial pressure against a group like Hizballah so long as its maintains massive inflows of cash from a state sponsor of terrorism, in the case the Iranian Government."?

5. Can you definitively say that BDL and the LBS have not:

a. Transacted or held accounts with or for any Iranian institutions or persons?

b. Transacted with the Iranian Central Bank, Bank Markazi?

c. Facilitated through the LBS, the illicit Iranian support of Hizballah and Iranian weapons sales and support of Hizballah and Syria's illegitimate Assad regime?


By traditional economic indicators Lebanon's economy is in shambles. Lebanon suffers from an extraordinarily high level of debt and extremely high debt to GDP ratio. For example, while Lebanon's GDP is around $40 billion, roughly equivalent to Uruguay, Lithuania, Costa Rica or Ghana, its sovereign debt is $53.8 billion - the fourth largest debt to GDP ratio (137% as of December 2011) in the world. The obvious risk of sovereign default is great - unless there is a fraudulent hidden scheme driven by Hizballah and its state sponsors, Iran and Syria, to support this economic house of cards. There is exactly such a scheme.


The irrational strength of Lebanese sovereign bonds corresponds with same time period of increased sanctions pressure against Iran. Iran has sought to avoid sanction pressure by directing more and more support to Hizballah to ensure the stability of its key proxy, and to ensure a financial outlet. Coupled with Hizballah's criminal activities (and the flight of some capital from Syria), the result is vast inflows of deposits into the LBS. As a result, with all economic indicators pointing to a serious risk of sovereign default, Lebanon's currency and banking system act like the currency and banking system of a far more successful sovereign.

Notably, the illicit Hizballah cash inflows into Lebanon have been gradually increasing coincidental with the rise of sanctions against Iran and as Syria falters. Once laundered into the LBS as bank deposits, the Lebanese banks pay relatively high interest rates and the deposits have to be put to work by the LBS to earn income for the banks. Among other illicit activities, the LBS utilize these deposits to purchase Lebanese sovereign bonds. The LBS's large-scale purchases of Lebanese sovereign debt effectively price support and stabilize what would otherwise be a far more volatile security. The market effect is that Lebanese sovereign bonds and its central banking system are artificially stabilized. Given the size of this financial support, such support can only come from either or both of illicit activities and a state actor - namely Iran.


The LBS is a fraud. Though the Lebanese banking system was once a great and well regarded sovereign banking system, it has evolved into a state-sponsored money laundering enterprise that enables the hidden large scale infusion of criminal and Iranian funds into Lebanon. The focal point of the fraudulent Lebanese banking system centers on BDL.

1. How can BDL explain the mismatch between the weak Lebanese economy and its artificially stabilized sovereign debt?

2. How can BDL rationalize the enormous inflow of cash deposits? And which coincides with the increase of sanctions against Iran?

3. How can BDL deny the strong financial bonds between Iran and Hizballah?


We understand that Lebanon is a diverse country with many influences and only some insidious. Unfortunately, the insidious influence of Hizballah controls Lebanon. And, of course, Hizballah is the important leading proxy of Iran. The international community has come together in an unprecedented manner to economically isolate Iran and successfully pressure Iran to forego its nuclear weapons program. Given the incredible importance of this moment in the isolation of the Iranian regime, it can no longer be "business as usual" between Iran and Hizballah and Lebanon.

UANI recently announced the results of a three month-long investigation into the influence of Iran and Hizballah in the Lebanese banking system (LBS) and Lebanon's sovereign bond market, and announced a campaign to compel legitimate financial institutions into divesting from Lebanon's bond market.

Investment firms such as Erste-Sparinvest and Eaton Vance have already divested from Lebanese bonds.

UANI has requested a reply from Secretary General Sader by July 30, 2012.

Click here to read UANI's full letter to the Association of Banks in Lebanon (ABL) and Secretary General Makram Sader. Click here to read the Daily Star article, "U.S. group: Lebanese banks laundering money." Click here to view UANI's research, "HIZBALLAH, LEBANON & IRAN: PARTNERS IN A SOVEREIGN MONEY LAUNDERING SCHEME." Click here to read UANI's May 28 letter to Riad Salame. Click here to call on the U.S. Government to Sanction the Lebanese Banking System and for Bond Holders and Credit Agencies to end Lebanon Business.
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Publication:Business Wire
Geographic Code:1U2NY
Date:Jul 19, 2012
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