WASHINGTON (AP) — The U.S. Treasury Department on Tuesday sanctioned two Lebanese brothers who are accused of selling “dangerously compromised fuel” to Lebanon’s state utility company.
The Treasury’s Office of Foreign Assets Control blocked Raymond Zina Rahme and Teddy Zina Rahme from accessing U.S. bank accounts and the larger U.S. financial system. The brothers allegedly used their role as government subcontractors to import tainted fuel that caused “significant harm to Lebanese power plants.”
The tainted fuel allegedly caused more malfunctions at power stations across the country and a rise in daily electricity cuts.
Since late 2019, Lebanon has fallen into the worst economic crisis in its modern history, rooted in decades of corruption and mismanagement by a political class that has ruled the country since the end of the 15-year civil war. Three-quarters of Lebanon’s population of over 6 million, including a million Syrian refugees, now lives in poverty. Inflation is soaring.
Brian Nelson, U.S. Treasury’s undersecretary for terrorism and financial intelligence, said in a statement the sanctions underscore a “commitment to shining a light on corrupt actions, which continue to unjustly impact the Lebanese people.”
“Now more than ever, the Lebanese government should implement desperately needed economic and political reforms,” he said.
Treasury used a 2007 executive order that allows for sanctions to be imposed on those who contribute to “undermining Lebanon’s democratic processes or institutions, contributing to the breakdown of the rule of law in Lebanon.” President Joe Biden signed a continuation of that order in July 2022.
Last month, the International Monetary Fund gave a grim assessment of Lebanon’s prospects for escaping its deepening financial crisis, saying that without reforms, the country is headed for hyperinflation.
Ernesto Ramirez Rigo, the head of the IMF mission in Lebanon, said at a news conference that inaction by Lebanese leaders would leave the nation in a “never-ending crisis” that would affect the quality of life of “many Lebanese for years to come.”
Associated Press writer Abby Sewell in Beirut contributed to this report.