A coalition of Lebanese lawyers has lodged an unprecedented lawsuit against prominent banker Bassam Sehnaoui following a contentious meeting with Israeli Prime Minister Benjamin Netanyahu. The suit alleges that Sehnaoui engaged in illicit financial arrangements that breach Lebanese law and compromise national interests.
The complaint, filed in a Beirut court, claims the banker facilitated cash transfers to entities linked to the Israeli state without proper disclosure, violating a 2019 Lebanese financial compliance act. Lawyers argue that the meeting, which took place at the former Israeli embassy in Beirut last month, was used to negotiate undetected cross‑border transactions, providing a loophole for money laundering. Sehnaoui, a former governor of the Central Bank of Lebanon and a seasoned global financier, denies the allegations, stating that all transactions were fully compliant with international banking standards.
Why it matters
While the case is rooted in Lebanon, its implications ripple through the Gulf region. UAE banks maintain correspondent relationships with Lebanese institutions, and any legal restrictions or reputational damage could affect cross‑border settlements and credit lines in the Gulf. Moreover, the lawsuit adds another layer of complexity to Israel‑Lebanon relations—an ongoing topic of debate within UAE diplomatic circles that seek stability and connectivity across the region.
The UAE, as a key regional financial hub, observes this development closely. Rated as one of the safest places for banking and investment, Dubai’s financial markets rely on the integrity of partner banks. If Sehnaoui’s involvement extends to UAE correspondent branches, regulators might reassess risk‑management protocols and compliance guidelines to safeguard against similar breaches.
What’s next
The Beirut court will conduct preliminary hearings next week to assess the merits of the case and the viability of a full trial. Both sides have agreed to mediation, but the lawyers controlling the suit have already mobilised legal teams across Doha and Riyadh to monitor any fallout.
Should the lawsuit proceed, it may trigger investigations by the Central Bank of Lebanon and the UAE Securities and Commodities Authority. In the event of a ruling, sanctions could include revocation of banking licenses or restrictions on cross‑border payments, affecting a limited but significant number of UAE‑based subsidiaries that operate through Lebanese channels.
For now, Sehnaoui has issued a statement calling the allegations “unfounded” and warned that the lawsuit could undermine the Arab world’s financial stability. The Central Bank of Lebanon has promised a swift review of all correspondent accounts linked to the banker.
Authorities across the Gulf are poised to take precautionary measures. The Dubai Ministry of Finance has urged local banks to review their contractual agreements with Lebanese counterparts and to enhance transparency in cross‑border settlement procedures.
Additional reporting by The Dubai Herald newsroom.
