By: Sammi Ibrahem,Sr
Azza Hajj Hassan wrote in the “Cities” under the title “The Lebanese-Syrian Economy in the Goal of Caesar: The Blockade Applied”: “The American Penal Code“ Caesar ”entered into force yesterday, Tuesday, June 17th, amid escalating fears of the magnitude of negative effects He will leave it on the Lebanese economy, and if Lebanon is not directly concerned with American sanctions, it is in the eye of the American “Caesar” storm.
Interconnection risk
Analysis and interpretations differ regarding the impact of Caesar’s law on the Lebanese economy. However, it remains clear that the Lebanese and Syrian economies are closely related and connected at all levels, especially after the year 2011 with the beginning of the Syrian war. The best evidence of the two economies closely related, international reports, including those of the United Nations and the World Bank, addressed the reflection of the decline in the domestic product of the Syrian economy directly on the Lebanese GDP. As the decrease in Syrian output by 1 percent automatically reflects a 0.20 percent decline in Lebanese output.
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On the basis of the interdependence of the economies of the two countries, it has become obligatory for the authorities in Lebanon on the one hand and the institutions of the private sector on the other hand, to search and reconsider many of the relations and exchanges that may be covered by US sanctions.
Caesar’s law aims to cut off any supplies to the Syrian regime, be it from governments, companies, or individuals. It affects everyone who engages in transactions with the Syrian regime and provides him with financial, technical, or contracting support, or with the Syrian government, or any of the official institutions or Syrian entities. It affects every person or organization that sells or provides goods, services, or any type of economic and financial support to the Syrian authority. The US Penal Code is directed directly and decisively to the Syrian Central Bank, and to everyone who cooperates or has a relationship with the Central Bank.
Electricity and Contracting
Some people, through reading the effects of the American Penal Code on the Lebanese economy, see that the latter will not be significantly affected by Caesar’s law, according to a source following the file, especially since the law does not affect commercial transactions between Lebanon and Syria or crossing the transit, ruling that Lebanon will be affected negatively by the sanctions, except for the electricity file . It is expected that the Lebanese government will have to stop importing electricity from Syria, given that the relationship is concentrated with the official electricity establishment of the Syrian government. While others warn of the effects of the law on the Lebanese economy, unless matters are rectified and a specific mechanism and borders are established for economic interaction between the two countries. He believed those who described Lebanon as the “soft side of Syria”. The latter has been using Lebanon as a conduit for its imports since 2011 with the imposition of a blockade on it, and Syria, in return, is breathing space for Lebanon in terms of exports by road.
The worst effects of the US Penal Code on Lebanon are almost to block the way for Lebanese companies to enter the Syrian market, to participate in the reconstruction and contract investment, and to hinder the preparation of the Lebanese ground to receive foreign companies intending to participate in the reconstruction of Syria.
The banking system
As for the most sensitive files at the present time and the most vulnerable to American sanctions, it is the file of the Lebanese banking sector and its contributions to banks in Syria, i.e. Bank of Syria BASY, Byblos Bank Syria BBS, Bank of Syria and Overseas BSO, Fransabank Syria FSBS, Bank of the East (affiliated with the bank Lebanese French) SHRQ, Bank of Syria and the Gulf SGB. Although the mentioned banks have not been Lebanese banks since 2011, when they separated from their parent banks in Lebanon, their liquidity, budgets, and capital are not integrated with the banks ’budgets in Lebanon, and they are managed by private companies and independent management boards, but are owned by a number of shareholders. Among them are the Lebanese banks, but it is imperative that the Lebanese banks and monetary authorities deal with caution with those in Syria, especially in terms of their relationship with the Syrian Central Bank that is directly targeted by Caesar’s law.
And the banking sector has to take the maximum precautions in terms of dealing with the funds of the Syrian depositors in Lebanon, and scrutinizing the extent of their association with financing or support operations for the Syrian authorities. It has also become urgent for Lebanese companies that were hoping to cross into the Syrian market through reconstruction projects, to reconsider their future plans in order to avoid falling prey to US sanctions.
