Post by congregatio on Sept 9, 2023 1:26:36 GMT 4
August 10, 2023
Action Taken in Coordination with United Kingdom and Canada
WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating the former governor of Lebanon’s central bank, Riad Salameh (Salameh), whose corrupt and unlawful actions have contributed to the breakdown of the rule of law in Lebanon. Salameh abused his position of power, likely in violation of Lebanese law, to enrich himself and his associates by funneling hundreds of millions of dollars through layered shell companies to invest in European real estate. OFAC is also designating four close associates of Salameh, including members of Salameh’s family and his primary assistant, who helped to conceal and facilitate this corrupt activity. The United States is taking this action alongside United Kingdom and Canada, partners who share the United States’ vision of a Lebanon that is governed for the benefit of the Lebanese people and not for the personal wealth and ambition of Lebanon’s elite.
“By using his position to enrich himself, his family, and his associates in apparent contravention of Lebanese law, Salameh contributed to Lebanon’s endemic corruption and perpetuated the perception that elites in Lebanon need not abide by the same rules that apply to all Lebanese people,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “We are joining the United Kingdom and Canada in imposing sanctions on the former governor because he used his position to place his personal financial interests and ambitions above those of the people he served, even as the economic crisis in Lebanon worsened.”
Today’s coordinated sanctions complement multiple investigations into Salameh and those close to him undertaken by both Lebanese and European law enforcement. OFAC’s action is taken pursuant to Executive Order (E.O.) 13441, which authorizes sanctions against certain persons who have taken actions that have the purpose or effect of undermining Lebanon’s democratic processes or contributing to the breakdown of the rule of law in Lebanon. OFAC’s designation of Salameh and individuals involved in his corrupt schemes do not extend to the Banque du Liban (BdL) or the BdL’s U.S. correspondent bank relationships. The U.S. government will continue its extensive cooperation with a range of public and private sector entities to support efforts to counter corruption and implement economic reforms in Lebanon.
Riad Salameh
Within the last several years, international efforts to promote corporate transparency have exposed Salameh’s connection to numerous shell companies and bank accounts in Europe and the Caribbean. As governor of the BdL, Salameh used his office to engage in a variety of unlawful self-enrichment schemes with the help of close family members and associates. In one scheme, Salameh — with the assistance of his brother, Raja Salameh (Raja) — used a shell company owned by Raja in the British Virgin Islands, Forry Associates, to divert approximately $330 million from transactions involving the BdL. As part of this scheme, Salameh approved a contract that allowed his brother’s company to take a commission on purchases of financial instruments by Lebanese retail banks from the BdL, even though Raja’s company provided no apparent benefit for these transactions and the contract avoided naming Forry Associates or its owner. Salameh and Raja then moved these funds to bank accounts in their own names or the names of other shell companies. Salameh’s primary assistant at the BdL, Marianne Hoayek (Marianne), joined Salameh and Raja in this venture by transferring hundreds of millions of dollars — far more than her official BdL salary accounted for — from her own bank account to those of Salameh and Raja.
Diverted funds were frequently transferred to a number of property management companies in France, Germany, Luxembourg, and Belgium that were registered in the names of either Salameh’s son, Nady Salameh (Nady), or Salameh’s former partner, Anna Kosakova (Anna). Nady was the publicly registered officer of companies registered in Luxembourg that used subsidiaries in Germany and Belgium to purchase high-end commercial real estate worth tens of millions of dollars. In France, Anna owned companies that received funds from Forry Associates and used those funds to purchase luxury properties, including apartments for Anna and Salameh in one of Paris’ most sought-after neighborhoods, and an office building on the Champs-Elysées where the BdL rented space for its “continuity of operations” center.
Salameh also used shell companies in Panama and a trust in Luxembourg to hide his identity as he purchased shares in a company where his son, Nady, had worked as an investment advisor, only to later sell those shares to a Lebanese bank regulated by the BdL. This sale represents both a conflict of interest as well as a likely violation of a Lebanese law prohibiting employees of the BdL from profiting from other private businesses, enacted to ensure that they devote their attention entirely to safeguarding Lebanon’s economic prosperity.
Salameh is being designated pursuant to E.O. 13441 for having taken, or posing a threat of taking, actions that have the purpose or effect of contributing to the breakdown of the rule of law in Lebanon. Raja, Nady, Anna, and Marianne are being designated pursuant to E.O. 13441 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Salameh.
Sanctions Implications
As a result of today’s action, all property and interests in property of these persons that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. OFAC regulations generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of blocked or designated persons. This action does not apply to the BdL. Neither the BdL nor its assets should be considered blocked due to today’s action.
The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the Specially Designated Nationals and Blocked Persons List (SDN List), but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior.
Action Taken in Coordination with United Kingdom and Canada
WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating the former governor of Lebanon’s central bank, Riad Salameh (Salameh), whose corrupt and unlawful actions have contributed to the breakdown of the rule of law in Lebanon. Salameh abused his position of power, likely in violation of Lebanese law, to enrich himself and his associates by funneling hundreds of millions of dollars through layered shell companies to invest in European real estate. OFAC is also designating four close associates of Salameh, including members of Salameh’s family and his primary assistant, who helped to conceal and facilitate this corrupt activity. The United States is taking this action alongside United Kingdom and Canada, partners who share the United States’ vision of a Lebanon that is governed for the benefit of the Lebanese people and not for the personal wealth and ambition of Lebanon’s elite.
“By using his position to enrich himself, his family, and his associates in apparent contravention of Lebanese law, Salameh contributed to Lebanon’s endemic corruption and perpetuated the perception that elites in Lebanon need not abide by the same rules that apply to all Lebanese people,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “We are joining the United Kingdom and Canada in imposing sanctions on the former governor because he used his position to place his personal financial interests and ambitions above those of the people he served, even as the economic crisis in Lebanon worsened.”
Today’s coordinated sanctions complement multiple investigations into Salameh and those close to him undertaken by both Lebanese and European law enforcement. OFAC’s action is taken pursuant to Executive Order (E.O.) 13441, which authorizes sanctions against certain persons who have taken actions that have the purpose or effect of undermining Lebanon’s democratic processes or contributing to the breakdown of the rule of law in Lebanon. OFAC’s designation of Salameh and individuals involved in his corrupt schemes do not extend to the Banque du Liban (BdL) or the BdL’s U.S. correspondent bank relationships. The U.S. government will continue its extensive cooperation with a range of public and private sector entities to support efforts to counter corruption and implement economic reforms in Lebanon.
Riad Salameh
Within the last several years, international efforts to promote corporate transparency have exposed Salameh’s connection to numerous shell companies and bank accounts in Europe and the Caribbean. As governor of the BdL, Salameh used his office to engage in a variety of unlawful self-enrichment schemes with the help of close family members and associates. In one scheme, Salameh — with the assistance of his brother, Raja Salameh (Raja) — used a shell company owned by Raja in the British Virgin Islands, Forry Associates, to divert approximately $330 million from transactions involving the BdL. As part of this scheme, Salameh approved a contract that allowed his brother’s company to take a commission on purchases of financial instruments by Lebanese retail banks from the BdL, even though Raja’s company provided no apparent benefit for these transactions and the contract avoided naming Forry Associates or its owner. Salameh and Raja then moved these funds to bank accounts in their own names or the names of other shell companies. Salameh’s primary assistant at the BdL, Marianne Hoayek (Marianne), joined Salameh and Raja in this venture by transferring hundreds of millions of dollars — far more than her official BdL salary accounted for — from her own bank account to those of Salameh and Raja.
Diverted funds were frequently transferred to a number of property management companies in France, Germany, Luxembourg, and Belgium that were registered in the names of either Salameh’s son, Nady Salameh (Nady), or Salameh’s former partner, Anna Kosakova (Anna). Nady was the publicly registered officer of companies registered in Luxembourg that used subsidiaries in Germany and Belgium to purchase high-end commercial real estate worth tens of millions of dollars. In France, Anna owned companies that received funds from Forry Associates and used those funds to purchase luxury properties, including apartments for Anna and Salameh in one of Paris’ most sought-after neighborhoods, and an office building on the Champs-Elysées where the BdL rented space for its “continuity of operations” center.
Salameh also used shell companies in Panama and a trust in Luxembourg to hide his identity as he purchased shares in a company where his son, Nady, had worked as an investment advisor, only to later sell those shares to a Lebanese bank regulated by the BdL. This sale represents both a conflict of interest as well as a likely violation of a Lebanese law prohibiting employees of the BdL from profiting from other private businesses, enacted to ensure that they devote their attention entirely to safeguarding Lebanon’s economic prosperity.
Salameh is being designated pursuant to E.O. 13441 for having taken, or posing a threat of taking, actions that have the purpose or effect of contributing to the breakdown of the rule of law in Lebanon. Raja, Nady, Anna, and Marianne are being designated pursuant to E.O. 13441 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Salameh.
Sanctions Implications
As a result of today’s action, all property and interests in property of these persons that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. OFAC regulations generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of blocked or designated persons. This action does not apply to the BdL. Neither the BdL nor its assets should be considered blocked due to today’s action.
The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the Specially Designated Nationals and Blocked Persons List (SDN List), but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior.
