The warning shot has sounded

The United States government’s recent designation of Lebanese-Canadian Bank (LCB) as a “prime money laundering concern” crippled the bank, prompting a shotgun marriage merger that will effectively erase LCB from the country’s banking sector. The event has highlighted the shortcomings of the country’s anti-money laundering (AML) and counter-terrorist financing regime, and has been a wake-up call for Lebanese banks to both the ramifications of non-compliance and the long reach of the US Treasury’s Financial Crimes Enforcement Network (FinCEN). It is also almost certainly a warning that Lebanon will be hit where it hurts most if it plays politics against the interests of the world’s largest economy. When asked about LCB’s merger with Société Générale Banque au Liban (SGBL), Lebanon’s alpha banks refused comment across the board — indeed the topic of money laundering in Lebanon is so sensitive that officials and experts from multiple local and international organizations interviewed for