After several foreign banks, including a major Swedish bank, removed Lebanon from its list of cross-border-supported countries, more European banks may soon follow suit, Al-Akhbar suggested.
Svenska Handelsbanken AB, commonly known as Handelsbanken, is a large Swedish bank that boasts over 460 branches in Sweden and other countries.
The bank, which offers universal banking services, recently published its new list of countries that it supports for cross-border payments.
Reportedly, Lebanon is not on that list this time around.
Evidently, this means that the bank will not allow transactions to or from Lebanon to be processed through any of its branches. This will take effect in early July 2020.
In a similar move, several banks in each of Iceland, Denmark, Norway, and Finland recently scratched Lebanon off their cross-border lists, blocking all transborder payments relating to the struggling country.
Banking sources told Al-Akhbar that the reason behind this wave of restrictions against Lebanon is “to enforce anti-money-laundering laws.”
The same sources predict that other banks in different European countries might follow suit in the future, “as a result of the successive crises in the Lebanese banking sector.”
That is in addition to removing the option for Lebanese banks to utilize “nesting,” which is the practice of allowing a foreign bank to process the cross-border bank transactions of another foreign bank, through a correspondent bank.
These restrictions come in a time when the Lebanese economy is going through its most disastrous phase since the civil war of 1975-1990.
While the official Lebanese pound per US dollar exchange rate remains at approximately 1,515 LBP, the parallel market tells a completely different story.