Central Bank of Lebanon Issues Strong Ban
On 14 July 2025, the Central Bank of Lebanon (BDL) released Circular No. 170, addressed to all banks, financial institutions, brokerage firms, and investment funds under its supervision. The circular imposes strict rules to stop any direct or indirect financial dealings with unlicensed entities, especially organizations designated under international sanctions, most notably those listed by the U.S. Office of Foreign Assets Control (OFAC) .
Protecting the Banking System and International Relationships
The bank warned that allowing such funds into Lebanon’s formal banking sector could harm relationships with correspondent banks overseas, particularly in the U.S., where most dollar transactions are processed. These ties are critical for Lebanon’s ability to engage in international currency transfers and maintain confidence in its financial system.
Which Entities Are Affected
Circular 170 explicitly mentions several entities, including Al-Qard Al-Hassan, Bayt al-Mal, Al-Yusr Investment & Finance, and any other unlicensed associations or organizations under international sanctions. These entities are now barred from accessing any banking services, including opening accounts, receiving funds, or engaging in transactions through any Lebanese bank even via intermediaries
Legal Consequences for Non-Compliance
The circular leaves no room for leniency. Any bank or institution violating these rules could face severe penalties: license suspension or revocation, freezing of accounts and assets, and referral to the Special Investigation Commission for legal action.
BDL Clarifies Purpose of Circular 170
In a separate statement, Banque du Liban (BDL) underscored the primary aim of Circular 170: to prevent the inflow of funds from Lebanese entities or organizations that are subject to international sanctions. This clarifies that the directive is preventative in nature, designed to safeguard the integrity of Lebanon’s banking system.
