Shamgen [or Levant] Banking Agreement to be Signed

Turkey, Syria, Lebanon and Jordan are set to sign a regional banking cooperation agreement aimed at supporting and facilitating trade and investments between the countries.

The agreement comes in the wake of the signing of free-trade and visa-exemption agreements recently signed by the four countries, and comes amid a regional drive for further economic integration spearheaded by the Turkish government.

In comments made at the March 2011 "Enhancing Shamgen Banking: Turkey, Syria, Lebanon and Jordan" conference in Istanbul, Turkey's Central Bank Governon, Durmus Yilmaz, remarked "Although this conference is a step toward improving relations between the banking sectors of Turkey, Syria, Lebanon and Jordan in the short term, it is expected to contribute to the formation of a single market with the inclusion of other countries in the region in an area circumscribed by the Persian Gulf, Red Sea and the Mediterranean."

The Turkish daily, Today's Zaman has more on recent developments along that front:

Foreign ministers [from the four participating countries] decided on June 10 of last year to set up a high-level cooperation council to boost existing legal mechanisms ... to improve trade cooperation between them. The council plans to develop a long-term strategic partnership and to create a zone of free movement of goods and persons among them. ...

The countries’ aspirations to establish the planned single market in the Middle East are interpreted as the sign of the rise of an EU-like regional economic integration. Even the name of the conference proved how appropriate those interpretations are. The word “Shamgen” is a combination of “Sham,” the way the name of the Syrian capital of Damascus is pronounced in Turkish as well as in Arabic and with the meaningless “gen” to make it sound like the Schengen area, which comprises the territories of the 25 European states that act like a single state when it comes to international travel without internal border controls and visa requirements.
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Also speaking at the conference, Turkish Regulation and Supervision Agency (BDDK) President Tevfik Bilgin said relations between the countries in terms of banking investments are insufficient at the moment. “Investments made by Syrian, Lebanese and Jordanian bankers in Turkey and investments by Turkish banks in these three countries are very small,” he said. ...

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Lebanese Banks Comply with Iran Sanctions

From Bloomberg:

Lebanese banks will have to comply with stricter sanctions by the United Nations, the U.S. and the European Union on Iran, Central Bank Governor Riad Salameh said.

"It is up to the Lebanese banks to act in accordance with their interests and be sure, if they have to make an operation, that it's an operation that can't be contested internationally," Salameh said in an interview late yesterday at his office in Beirut. The latest UN resolution "is very clear and we will respect it and make sure it is respected."

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Stuart Levey, the U.S. Treasury undersecretary for terrorism and financial intelligence, visited Lebanon last month and met with Salameh as well as Finance Minister Raya Haffar el- Hassan for talks on sanctions against Iran. Salameh declined to provide details of the meeting.

Blom Bank SAL, Bank Audi SAL-Audi Saradar Group and Byblos Bank SAL, which are all among Lebanon’s top ten banks by assets, don’t allow transfers to Iran. There are 52 commercial banks operating in the country.

International Law

Lebanese banks are "also aware of the fact there is a list of people and institutions that the United States or the European Union have designated as parties not to deal with," Salameh said. "It's their responsibility therefore to act in a way that is in accordance with international law."

He said Lebanese banks have advised the central bank that they will abide by the sanctions and that "historically there was very a small level of an operation for Iran, or Iranian companies or merchants through Lebanese banks."

Bank Saderat, one of Iran’s largest lenders, which has six branches in Lebanon, will also have to comply with UN sanctions in accordance with Lebanese banking regulations, Salameh said.

The bank, which has been operating in Lebanon since 1963, has been under U.S. sanctions since 2006. In July, Germany’s financial regulator froze the assets of Bank Saderat’s Frankfurt and Hamburg units after the EU added the lender to a list of Iranian companies subject to "restrictive measures."

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