$600 Million of KRG is Frozen in Lebanese Bank for Four Years

KRG officials have faced ongoing challenges in recovering over $600 million frozen in a Lebanese bank since 2021, due to restrictive measures imposed by the Central Bank of Lebanon and geopolitical complexities.

More than $600 million from the Kurdistan Regional Government’s (KRG) oil sales has been frozen in a Lebanese bank for the past four years, leaving the KRG in a financial bind. Despite multiple attempts by KRG officials to retrieve the funds, the Central Bank of Lebanon’s restrictions have thwarted their efforts.

The situation traces back to early 2021 when $294 million was deposited into a KRG account at Midbank in Beirut. Murtaza Lakhani facilitated the transfer of this amount from Glencore as payment for oil. Subsequently, an additional 310 million euros were transferred from a Fitol Group account in a Cypriot bank to the same KRG account at Bankmed. Combined, these amounts exceed $600 million.

In May 2021, under significant pressure from the US Treasury Department, the Lebanese central bank suspended remittances from Lebanon, affecting several banks, including Bankmed. This action was part of broader measures aimed at curbing financial networks benefiting Hezbollah and entities close to Iran.

Despite persistent efforts by KRG officials to release the funds, the restrictions on Bankmed have remained steadfast for four years. The bank’s close association with the Hariri family adds another layer of complexity to the situation.

Kurdfile reports that the suspension of oil exports has exacerbated the financial strain on the KRG, making the recovery of these frozen assets even more critical. However, the geopolitical interests at play, particularly involving Hezbollah and Iranian-linked parties, have kept the restrictions in place.

This prolonged financial impasse highlights the vulnerabilities and challenges the KRG faces in navigating the intersection of regional politics and international finance.