Ambassador Hale Remarks Following Announcement of the Initial Understanding with Iran on its Nuclear Weapons Program

November 28, 2013
My meeting today with Prime Minister Mikati was an opportunity to discuss the recent understanding between the international community and Iran.  These initial understandings will both stop Iran's nuclear plan from advancing and roll back key aspects of the program.  These are the first meaningful limits Iran has accepted on its nuclear program in close to a decade.

 This understanding lasts for six months.  During that period, negotiations will continue.  Their aim is a long-term, comprehensive solution that addresses all of the international community's concerns about Iran's nuclear program and its ability to develop nuclear weapons.  

 That is our goal because we are committed to preventing the proliferation of weapons of mass destruction and to protecting our allies, especially in a region such as the Middle East, where security is so critical.  A successful resolution of this issue could have profoundly positive benefits for all people in the region and the world

 We recognize that Lebanon's leaders and people have a justifiable interest about these negotiations and about what is happening, and in knowing what they may mean for Lebanon and its relationship with the United States.

 I'd like to underscore a point Secretary Kerry has made: these discussions will not change our alliances or our friendships.  In fact, these discussions with Iran in no way dilute the strength and steadfastness of our commitment to the shared values of the Lebanese and Americans, or to our strategies and partnerships to promote those goals.

 As we proceed with negotiations about Iran's nuclear program, the United States will not ignore Iran's destabilizing actions in the region.  We will continue to counter Iran's terrorist activities, and those of its proxies, including Hizballah.

 We will continue to enforce sanctions that remain in place - continuing the pressure on Iran during this first phase. And we will continue our work with Lebanon to ensure that the enforcement of the international sanctions remains rigorous.  We will continue to urge adherence to Lebanese law and international agreements, such as the Baabda Declaration and Security Council resolutions 1701 and 1559.  We, and the International Support Group, will continue to address the effects on Lebanon from the war in Syria and help in Lebanon's wise policy of dissociation from that conflict.

 Our commitment to Lebanon, our desire to work with the people and leaders of Lebanon to ensure a stable, independent, prosperous, and sovereign Lebanon, remains as strong as ever.  

Remarks by U.S. Ambassador David Hale at the American Lebanese Chamber of Commerce Luncheon in His Honor

November 18, 2013

Thank you, Salim, for that very kind introduction.

 

Your Excellencies, friends, I am happy to be with so many old friends and new ones as well.  Many of you know I feel a strong connection with Lebanon, given my years of prior service at our Embassy here.  I last had lunch with this gathering in 2001.  And while it is true that we all have gotten a little older, I am happy to see that we all have enough of our original teeth to still enjoy a meal together, and hopefully to get through a few minutes of remarks without a nap.

 

I also recall the launch of AmCham's forerunner, the Lebanese-American Business Association (LABA).  When I was a junior officer handling our political, economic and commercial work in the early '90s, Salim and a group of his colleagues came to see me in Awkar to try out a concept of theirs, to see if the U.S. would support the formation of LABA.  Not then understanding the intricacies of the approval and clearance process in my government, my response was an immediate and unrestrained "Yes, let's do it."  And do it, you did.  So imagine how good it feels to stand here today and see your accomplishments. 

 

The American Chamber of Commerce is a key element in the American-Lebanese relationship.  Yes, of course our government-to-government and military-to-military ties are crucial, and get most of the news.  But they are only one part of the picture.

 

After all, it is the personal ties and shared values between individual Americans and individual Lebanese, and among individual Americans of Lebanese origin, that bind our countries.  These ties are reflected in so many different aspects of our two nations' experiences.

 

We all know about the educational links between us.  We know about the thousands and thousands of Lebanese who have studied in America and Americans who have studied here.  We know about the role American educational institutions – AUB, LAU, ACS, IC, the American Schools in Tripoli and Nabatiyyeh-- have played in this country in sharing American values and systems in ways that have enriched not just Ras Beirut, but all of Lebanon and indeed all of the Middle East.

 

We know about the incredible success of Lebanese immigrants and their descendants in my country, in the arts, medicine, sports, politics, diplomacy, business, and the contributions they have made to America.

 

 

What may be less well known is how early we began to forge these ties, starting with trade.  American merchant ships from Boston paid regular calls in Beirut harbor even before our own independence in 1776.  And in America, Lebanese traders were an essential part of the expansion of our frontiers westward.

 

It was often Lebanese traders who had the ingenuity, fortitude, and drive to provide the goods sought by settlers as they moved westward into new terrain.  Lebanese brought something of their famous Phoenician entrepreneurship to America, from Wichita to Detroit, and from Maine to California.

 

This entrepreneurial spirit continues to bind our countries.  For several years running the United States has been Lebanon's number one trading partner.  I applaud all those here representing companies that generate trade with the U.S.  You know the resources of our embassy are at your disposal for continued trade expansion.  

 

Other ties bind us.  Lebanese and Americans share many core values.  We both believe in:

 

          --a free market;

 

--mutual respect and coexistence among various faiths and cultural traditions;

 

          --freedoms of expression, the press, and religion;

 

          --democratic and accountable institutions of governance; and

 

          --the value of education and of making it available to all.

 

Every day, we work to fulfill the promise and opportunity created by those shared values.  We do so through tangible programs, investments, and training.  Whether helping the Lebanese Armed Forces improve its capabilities or giving activists in Lebanese civil society tools to achieve their goals, we are partners for the Lebanese - as you strengthen your institutions and democratic traditions.

 

Since 2005, the U.S has invested more than a billion dollars in the Lebanese Armed Forces and the Internal Security Forces, through equipment and training, for a very specific reason.  Only when those institutions are protecting all of Lebanon's citizens, and controling all of Lebanon's borders and territory, will this country be stable and at peace.  The provision of security and control of arms must be in the hands of institutions that are transparent and accountable to the people, not in the hands of factions with their own agendas and foreign entanglements.

 

You don't need me to tell you that greater stability will improve the investment climate and economy of Lebanon.  Nor do you need me to tell you that stability alone is not enough.   It was disconcerting to see that Lebanon -- a country with such a strong history of commerce – placed 111th in the World Bank's "Doing Business" report for 2014.  Lebanon fell six places this year.

 

Reversing this trend will require removing obstacles to investment.  These include current policies on intellectual property rights, the high costs of production, and inadequate infrastructure.  As your partners, we can offer programs that can assist in removing some of these obstacles.

 

Effective, persistent lobbying by AmCham can bring results, and I would be happy to join with you in a strategy to work with your leaders to tear down obstacles to trade and investment.

 

But some first steps are needed.  One is to establish the political will among Lebanese leaders to tackle these problems.  Another is to break the political paralysis in this country that prevents basic government decision-making and functions. 

 

 

Before I close, I know there is a broader political question on the minds of many of you, because of its potential implications for the region, Lebanon included.  The topic is the international community's effort to prevent Iran from getting a nuclear weapon.  That is our goal because we are committed to preventing the proliferation of weapons of mass destruction and to protecting our allies, especially in a region such as the Middle East where security is so critical.  A successful resolution of this issue could have profoundly positive benefits. 

 

It's important for people in Lebanon to know – for people in the region to know – what Secretary Kerry has said:  that whatever arrangement the international community arrives at, it will not change our alliances or our friendships.  These discussions with Iran in no way dilute the strength and steadfastness of our commitment to the shared values of the Lebanese and Americans, or to our strategies and partnerships to promote those values.

 

In fact, Lebanon has an advantage, because the United States and the international community have a parallel strategy of support for Lebanon.  And that won't change.

 

The recently established International Support Group demonstrates an international consensus to help Lebanon protect itself from the effects of the war in Syria.  That international consensus embraces the Baabda Declaration, key Security Council resolutions such as 1701 and 1559, and seeks to give Lebanese state institutions the tools needed to implement them.

 

There is also an international consensus that Lebanon and the international community must work together to alleviate the impact on Lebanon of the refugees coming from Syria.

 

Finally, there is an international consensus that Lebanon's policy of dissociation from the Syrian conflict is the right policy, and that Lebanese factions that are violating that policy are putting their own narrow interests and those of their foreign sponsors above the interests of the Lebanese nation and people. 

 

The United States is a fully committed partner for Lebanon.  We want Lebanon to be stable, prosperous, and apart from the conflict in Syria.

 

Whether in business, education or security – in all of the many layers and dimensions of our relationship - we know what is possible when American and Lebanese individuals and their institutions work together, based on shared values, to the benefit of both our societies.  

 

Thank you.

Remarks by Department of Treasury Assistant Secretary for Terrorist Financing Daniel Glaser at the 2013 Annual Arab Banking Conference

November 15, 2013

"Protecting the Lebanese Financial Sector from Illicit Finance"

Welcome

It is a great pleasure to be here today at the 2013 Arab Banking Conference.  I would like to thank the Union of Arab Banks, the Association of Banks in Lebanon, and the Government of Lebanon for hosting this important dialogue and for inviting me to speak.  My appearance here today is just the latest example of the close collaboration between the U.S. Treasury Department and the Lebanese financial authorities—both in the public and private sectors—in our joint and ongoing mission to combat illicit finance within the international and Lebanese financial systems.  The Lebanese financial system is a critical asset to the Lebanese people and serves as a bedrock of the national and regional economy.  Our partnership has already contributed to its resiliency and security, and I am confident this partnership will intensify in the months and years to come.  And intensify it we must, for there is still much work to be done and many challenges ahead.  These have only been magnified by recent political developments in this region.  Lebanon's ability to retain its position as an important regional and international financial center requires constant vigilance, leaving no stone unturned in our collective efforts to uproot money laundering, terrorist financing, and other forms of illicit finance from the Lebanese financial system.  Failing to do so would not only represent a missed opportunity to contribute to global efforts to uphold the rule of law and disrupt criminal and illicit groups, but might also allow regulators and financial institutions around the world to draw the conclusion that business with Lebanon comes at too high a risk.  Such an outcome is not in our collective interest, so we must take action to ensure that strong counter illicit finance measures are adopted and implemented in Lebanon.  In this regard, my remarks today will focus on the illicit finance threats to the Lebanese financial system, and discuss the steps that should be taken to secure the good standing of Lebanon's financial sector.

The Importance of Combatting Illicit Finance

As we all know, the international community for the past quarter century has been focused on safeguarding the financial system from abuse by illicit actors.  These efforts have intensified over the past decade, with organizations such as the Financial Action Task Force (FATF) and the United Nations (UN) requiring countries to take both systemic and targeted measures to undermine the financial activity of organized criminal groups, narcotraffickers, terrorist organizations, WMD proliferators, and regimes such as Iran and Syria.  The centrality of these efforts to the health and vitality of the fundamental international financial architecture was underscored by the G20 Leaders themselves at their historic Summit in Washington, D.C. in November 2008.  There, in outlining a roadmap to recovery during the darkest moment of the global financial crisis, the G20 Leaders reaffirmed the importance of combating money laundering and terrorist financing as a key component of promoting integrity in financial markets.  They called upon countries to "implement national and international measures that protect the global financial system from uncooperative and non-transparent jurisdictions that pose risks of illicit financial activity."  The G20 Leaders' statement makes it clear that part of the price of integration into the international financial system is the adoption and implementation of the full range of measures designed to combat illicit finance. 

Our Lebanese partners recognize this imperative.  As I mentioned earlier, the Lebanese financial system is a critical asset to the people of Lebanon and a bedrock of the national and regional economy.  It has long been a source of professionalism and stability in a region often beset by crisis and upheaval.  In the past, this was maintained by a studied neutrality and the guarantee of bank secrecy for all.  As we all understand, this approach is no longer tenable.  Moving forward, that professionalism and stability, which have been the hallmark of the Lebanese financial system, can be maintained only through the efforts of both the public and private sectors to ensure a hostile environment for terrorists, criminals, narcotraffickers, and sanctioned regimes such as Iran and Syria.  Working together we can stop the illicit financial activities of groups that seek to destabilize the region such as al Qa'ida and Hizballah. 

The Illicit Finance Threats to the Lebanese Financial System

It is important at the outset to identify the illicit finance threats that Lebanese financial institutions face.  Some of the threats, such as narcotics-related money laundering, are universal challenges confronting financial centers around the world.  Others, such as terrorist financing and sanctions evasion, while certainly not unique to Lebanon, are amplified by Lebanon's geographic, historic, and political circumstances.

These threats and challenges are not hypothetical.  Many are illustrated by the recent case of Lebanese Canadian Bank (LCB).  That scheme involved the laundering of hundreds of millions of dollars in narcotics proceeds through the Lebanese financial system using bulk cash shipments and trade-based money laundering involving used car sales and consumer goods.  These drug trafficking proceeds were often funneled to Lebanon through several Lebanese exchange houses that utilized accounts at LCB branches.  The LCB narcotics money laundering scheme is indicative of a broader trend: international criminals are developing increasingly sophisticated means to move funds and obscure the illicit activities and actors involved.  The narcotics trafficking exposed by our actions against LCB spanned several continents and involved financial flows of hundreds of millions of dollars across many jurisdictions.  These transactions were accomplished with the assistance of dozens of individuals and entities, whose access to the international financial system ultimately centered on a bank here in Lebanon.  So the important point to note here is that though the criminal activity occurred around the world, the funds were flowing to the Lebanese financial system.  This underscores the need for Lebanese financial authorities to be both vigilant and proactive in cracking down on money laundering and send the message that the Lebanese financial system is not open for business to proceeds from illicit activities.

There are, however, additional lessons to be drawn from LCB.  The facts of LCB demonstrate that what at first appears to be a criminal money laundering scheme might actually have broader implications.  In the case of LCB, Hizballah benefitted from a global narcotics trafficking network.  This should not be surprising given Hizballah's involvement in a wide range of illicit activities.  These illicit activities, combined with its ties to sanctioned regimes such as Iran and Syria, should call into question all financial relationships with Hizballah or its agents.  And the risks of engaging in such relationships will only increase as more countries apply sanctions on Hizballah, which continues to engage in destabilizing military activity in Syria and attacks in Europe.  Most recently, we have seen the EU take exactly such a step with their inclusion of Hizballah on their proscribed entities list this past July.  This came on the heels of the Gulf Cooperation Council's announcement in June that it would impose sanctions on Hizballah.

The threats to the Lebanese financial system, however, are not limited to traditional money laundering and terrorist financing.  Particularly given Lebanon's geographic location, Lebanese financial institutions must also be alert to the threat of sanctions evasion.  As a nearby regional banking hub, regimes such as Syria and Iran will continue to look to Lebanon as a potential financial access point into the global system.  Lebanese financial institutions are therefore an important component of international efforts to isolate these regimes, and Lebanon's resistance to any attempts to use Lebanese banks as a gateway to the international financial system is essential.

U.S.-Lebanese Cooperation

Given this array of challenges, U.S.-Lebanese cooperation is critical.  As U.S. actions targeting money laundering and terrorist financing demonstrate, the United States is prepared and will continue to take action to protect our financial system from threats when we deem necessary.  The Lebanese financial authorities, however, must be proactive as well.  Nobody knows the Lebanese financial system as well as they do, so they need to be the first line of defense.  The good news is that we know we have strong partners here, in both the public and private sectors.  The Lebanese government consistently cooperates in addressing specific illicit finance threats, including money laundering, terrorist financing, and sanctions evasion.  We are confident that this collaboration will continue to deepen.

More broadly, over the last several years, the Lebanese authorities have been working to build a solid regulatory foundation to close the gaps in the system that are exposed to illicit finance threats.  In so doing, they have identified some of the pressing risks and developed expanded regulatory requirements to address them.  These include measures requiring Lebanese financial institutions to implement international sanctions and expanding anti-money laundering and counter terrorist finance regulation to financial institutions such as exchange houses. The Lebanese government is working to close gaps by putting a cross border currency declaration requirement in place and we urge Parliament to pass the legislation without delay.   But as we have seen around the world, regulatory efforts will not be as effective as they should be without a strong partnership with the private sector.  In that regard, I am pleased to see that relationship developing in Lebanon, where efforts by the public sector have been reinforced by a commitment to improving compliance in the private sector.  In fact, many Lebanese banks seek to go beyond the minimum requirements of the law, in order to ensure that they are not unwittingly facilitating illicit finance.  Such efforts will continue to solidify their standing in the international financial system.  

Conclusion

Lebanon should be proud of the achievements of its financial sector and its position within the global financial system.  This sector has remained a source of stability for the people of Lebanon during the crises of the past decades and it continues to provide essential services to Lebanon and the region.  As Syria continues to be destabilized by horrific acts of violence, leading us to sanction both the Assad regime and al-Qa'ida affiliates, the region faces new and unprecedented economic challenges.  The Lebanese financial sector is clearly playing an important role as it works to maintain economic stability and prosperity.  You have a partner in the United States in confronting the full range of challenges in your financial system because we share your commitment to ensuring your banks remain at key pillar of Lebanon's stability.  Together we can institutionalize the important position of the Lebanese banking sector within the international financial system.

The people of Lebanon have invested significantly in their sovereignty and independence by strengthening key institutions of the Lebanese state and economy, like the Lebanese financial sector.  I have had the privilege of working with many of you over the past few years and I know how seriously you take this duty.  As the world changes around us and the risks facing the international finance system continue to fluctuate, I am confident that the historic bonds we have built and the friendships we have created will remain the guiding framework for our efforts.

Remarks by Ambassador Hale During LAF Cessna Handover Ceremony

November 6, 2013
Good afternoon.  It is an honor to be here today as we handover this Cessna Aircraft to the Lebanese Armed Forces.  This transfer is a reflection of the strong cooperation between the United States and Lebanon, particularly in enhancing Lebanon's security. Now more than ever, it is important to show the benefits of U.S.-Lebanese security cooperation.

For some years, the LAF has been rebuilding itself from the ground up.  All militaries have basic needs for standard equipment, and the United States has worked with the LAF to help meet those needs.  But the military-to-military partnership between the United States and Lebanon is multifaceted,  to include substantial training and equipment of increasing sophistication.

Today's transfer of an advanced Cessna Aircraft reflects that progress and builds upon previous Cessna and Huey helicopter transfers.  These aircraft will help the LAF conduct effective border security missions and combat threats from extremist groups.

Lebanon's security institutions are a key pillar of the state.  Our assistance to them – now over a billion dollars since 2006 --  is a cornerstone of the partnership between our two nations.  The United States is firm in its belief that the LAF is Lebanon's only legitimate defense force.  We will remain committed to strengthening the capacity of the LAF so it can pursue its mission of securing Lebanon's borders, defending the sovereignty and independence of the state, and of achieving Lebanese unity and stability, to enable the full implementation of Security Council resolutions, including 1701 and 1559.

The LAF has shown courage and determination in the pursuit of these goals, and has our full support.  On behalf of the United States, I thank President Sleiman and General Qahwagi for their extraordinary leadership in this challenging time for both Lebanon and the region.

I often hear from ordinary Lebanese their strong desire for normal lives.  They want an economy that can produce jobs for them.  They want to educate their children.  They want to lead their lives without worrying about basic security.  They want to practice their faiths freely and express their opinions openly.  They want to choose their political representatives democratically.

To achieve those very human objectives and needs, there must be stability and Lebanese state institutions that are accountable to the Lebanese people, not unelected factions accountable to foreign powers.  Our partnership with the LAF and other Lebanese institutions is designed precisely to help the Lebanese fulfill those aspirations.

Thank you.