Former Banque du Liban (BdL) governor Riad Salameh will not enjoy a quiet retirement after his exit from the role on July 31. Rather, he will have to navigate new August 10 sanctions imposed by the United States, the United Kingdom, and Canada against him and four other associates for financial crimes likely committed during his thirty-year tenure at the bank. The joint decision marks the latest in a long-running saga to hold Salameh and other Lebanese elites accountable for widespread corruption in the Mediterranean country—the outcomes of which remain to be seen.

Washington, London, and Ottawa accuse Salameh of “using his position to enrich himself, his family, and his associates in apparent contravention of Lebanese law,” noting he “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.” U.S. under secretary of the treasury for Terrorism and Financial Intelligence Brian Nelson added that the three countries believe Salameh “place[d] his personal financial interests and ambitions above those of the people he served, even as the economic crisis in Lebanon worsened.”

The sanctions announcement also targets members of the Salameh family and other associates, including his brother Raja and son Nady. The former governor’s ex-wife Anna Kosakova and primary assistant at the BdL, Marianne Hoayek, are also listed. Raja allegedly used British Virgin Islands shell companies to divert roughly $330 million in transactions involving the BdL. Hoayek assisted in the transfers. 

Meanwhile, Nady and Kosakova owned companies in Luxembourg, Germany, and Belgium, facilitating real estate purchases worth tens of millions of dollars associated with BdL funds. The sanctions freeze any assets held by these individuals and prohibit transactions between citizens or businesses of the sanctioning countries.

The sanctions are the strongest rebuke against the embattled former central bank governor and his associates to date. Currently, there are multiple cases against Salameh in Europe, including Luxembourg, Germany, France, and Belgium, for allegations comprising embezzlement, money laundering, fraud, and illicit enrichment. The first three countries seized assets worth $130 million in March 2022. He is also wanted by Paris and Berlin, who issued an Interpol Red Notice for his arrest in May, but Lebanon does not extradite its nationals.

Lebanon is also investigating Salameh, although Beirut is unlikely to hold him accountable given his connections to the country’s political elites and likely knowledge of their financial crimes in connection to the broader Ponzi scheme he facilitated in collaboration with them via BdL and Lebanon’s commercial banks for decades. The fact that Salameh’s case in Lebanon was suspended for an undisclosed period on the same day as the sanctions announcement speaks to this reality.

Salameh’s connections to Lebanon’s political elites in this regard make the timing of the sanctions interesting. Beirut remains without a president or official government due to an ongoing political impasse between competing political blocs—a situation some international leaders are trying to address. This includes the “Quint” or “Quincy” Committee, consisting of the United States, France, Saudi Arabia, Qatar, and Egypt. Officials from these countries met on July 17 in Doha, Qatar, to devise a strategy for ending Lebanon’s political gridlock, even suggesting blunt mechanisms against leading Lebanese politicians and groups blocking a new president.

While only the United States is a Quint member in the joint sanctions group, this move could mark the beginning of a stronger approach to Lebanon’s political issues within the Quint framework. The United States has the unique capacity to leverage targeted sanctions against individuals contributing to Lebanon’s woes given its status as the pre-eminent financial power of the world. This tool could very likely constitute Washington’s core role within the Quint—with Salameh operating as the signal to other Lebanese elites that the status quo will not continue. Indeed, Salameh was touted as friendly with Washington, suggesting the sanctions may signal that any other official is fair game for unilateral measures.

Ultimately, the role of the central bank—and particularly Salameh—cannot be separated from the issues facing the broader Lebanese political system today. The BdL will play a crucial role in the much-needed reforms that will hopefully revive Lebanon’s ailing economy and welcome International Monetary Fund (IMF) support. Simultaneously, there is a strong chance that the bank’s governor position is included in a grand bargain that resolves the current political gridlock. Lebanon’s sectarian system naturally produces competition along such lines for major government positions and is largely why the battle for the presidency—held by a Maronite Christian who chooses a Sunni Muslim prime minister and authorizes their government—is so polarizing. The central bank is no different in this regard, although competition for the governor role will fall squarely between Lebanon’s Christian parties.

With this in mind, the Quint could be operationalizing the early stages of an approach discussed in the last gathering in Doha. Such a plan may utilize the influence of regional states like Saudi Arabia, Qatar, and Egypt alongside U.S. pressure to entice Lebanon’s major political players to agree on the presidency, prime minister, cabinet roles, and central bank governor. Saudi Arabia and Qatar have particular influence within Lebanese political circles, whereas Egypt’s role in the stalled Lebanon-Syria-Egypt gas deal gives it an understandable seat at the table. At the moment, France appears to be spearheading this effort via its special envoy, Jean-Yves Le Drian, who visited the country in late June.

Such a deal is no small task and is not guaranteed to succeed, especially given the long-running resistance to reform that has defined the Lebanese political system. However, the unique nature of Lebanon’s economic, political, and social crisis presents a rare opportunity to induce change—namely because the alternative is a cliff with no answers and potential conflict. For now, the makeup of any future government remains opaque, with the identity of the next central bank governor particularly shrouded in mystery. Time will tell if the Quint can make some progress that holds more individuals accountable and reforms the system that has sustained Lebanon’s corruption and patronage for so long.

Alexander Langlois is a foreign policy analyst focused on the Middle East and North Africa. He holds an M.A. in International Affairs from American University’s School of International Service. Follow him at @langloisajl.

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