The United States, UK, and Canada sanctioned the former governor of Lebanon’s central bank, Riad Salameh, for “corrupt and unlawful actions” on August 10 but stopped short of sanctioning the Banque du Liban (BdL) for its illegal activities under his leadership. Considered “the world’s worst central banker” by The Economist, Salameh vacated his position at the bank 10 days ago, at the conclusion of his fifth term and more than 30 years at the post.
According to a Treasury Department statement, Salameh abused his position to enrich himself, his family, and his associates by diverting approximately $330 million from BdL transactions “through layered shell companies to invest in European real estate.” Treasury specified that the sanctions did not apply to BdL, which under Salameh’s direction provided the Iran-backed terrorist group Hezbollah with financial services and help laundering money.
Expert Analysis
“For over a decade, successive U.S. administrations have covered for Salameh, the BdL, and the banking sector, even as Hezbollah has been laundering money through the entire sector under Salameh’s watch. Only now that he’s out of office did he get sanctioned, without reference to Hezbollah activity. In fact, Salameh’s designation is under an authority unrelated to Hezbollah. Moreover, Treasury’s press release specifically continued to shield BdL, even as a designation in January noted its cooperation with a Hezbollah money exchanger. This performative action is on brand with the administration’s overall policy in Lebanon.” — Tony Badran, FDD Research Fellow
“These sanctions are too little and too late. Washington spent decades propping up Salameh, believing that he was an ally who kept Hezbollah’s hands away from the Lebanese Central Bank and banking sector, only for it to turn out that Salameh was the guardian of Hezbollah’s money laundering and the Ponzi scheme that Hezbollah’s allies ran, thus crashing the country and its economy.” — Hussain Abdul-Hussain, FDD Research Fellow
Salameh’s Scheme Led to Lebanese Economic Collapse
The international banking community once praised Salameh for stabilizing Lebanon’s economy after the country’s civil war that lasted from 1975 to 1990. However, opinions on Salameh began to change following the start of Lebanon’s economic collapse in 2019, due in large part to his policy of borrowing money to pay creditors. Staggering inflation — officially above 250 percent — has caused the Lebanese lira to lose 98 percent of its value, falling to over 15,000 lira to the dollar, causing 80 percent of the population to fall into poverty and be unable to withdraw their savings.
Salameh Wanted in Europe for Money Laundering
In 2021, Switzerland opened an investigation into money laundering and embezzlement by Salameh and his brother that took place between 2002 and 2015. On May 16, France issued an international arrest warrant against Salameh after he failed to appear before French prosecutors. Interpol issued a red notice to arrest Salameh three days later. Germany issued an international arrest warrant for Salameh on May 23, followed by a secnd Interpol red notice on May 30.
Salameh remains in Lebanon, where local authorities have confiscated his passports and imposed a travel ban due to a Lebanese investigation.
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