US places sanctions on Syrian bank

The United States has imposed sanctions on Syria International Islamic Bank, accusing the company of being a vital conduit in what it says are the Assad government's efforts to obtain weapons of mass destruction.

The United States has imposed sanctions on Syria International Islamic Bank (SIIB), accusing the company of being a vital conduit in what it says are the Assad government's efforts to obtain weapons of mass destruction.

The Sharia-compliant lender was established in 2007 by investors including Qatar International Islamic Bank.

Three Qataris serving as board members resigned yesterday as Qatar's central bank took coordinated action with the US government.

"SIIB has acted as a front for the Commercial Bank of Syria, which has allowed that bank - Syria's largest commercial bank - to circumvent sanctions against it by the United States, the European Union and the Arab League," the US Treasury department said.

The US accused SIIB of having "surreptitiously facilitated" financing worth almost US$150 million (Dh550m) during the last year to the Commercial Bank of Syria. That bank has previously faced sanctions for allegedly funding efforts in Syria and North Korea to obtain weapons of mass destruction.

SIIB also made payments for Syrian Lebanese Commercial Bank, a subsidiary of Commercial Bank of Syria. Both have been subject to US sanctions since August.

"Today's action will add to the economic pressure on the Assad regime by closing off a key evasion route," said David Cohen, the US Treasury's undersecretary for terrorism and financial intelligence. "The Treasury department, working with others around the world who share our goal of ending the brutal repression of the Syrian people, will continue to close off the Assad regime's access to the international financial system."

The action does not target the Qatari investors in SIIB, the Treasury added.

However, Qatari authorities said they would ensure other banks in Qatar did not fall foul of sanctions against the bank.

"The government of Qatar and the Qatar central bank are taking action to ensure that the sanctions … are not evaded by persons dealing with Qatari financial institutions," Qatar's central bank said.

"This action is in line with the continuing cooperation between the government of Qatar and the United States to maintain economic pressure on the Assad regime," the central bank said.

Qatar's banks expanded their presence in Syria in the years preceding the Arab Spring.

Qatar International Islamic Bank's entry in 2007 was followed by Qatar National Bank-Syria, which has established 13 branches since 2009.

SIIB generated a net profit of 850m Syrian pounds (Dh48.9m) during the first quarter of this year, more than triple the profit it generated in the same period last year.

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