Fortunately, the central business district in Downtown Beirut has not been damaged in the air raids, and it is reported that banks are open and operational at this time. The only change in conditions has been a limitation by a number of commercial banks upon the conversion of Lebanese Pounds into US Dollars.

The money launderers who operate in Lebanon, particularly the ones involved in moving narcotics profits, and for many of whom dollars are the currency of choice, need Lebanese Pounds for certain operations, such as:

• Placing investments within Lebanon. Sometimes, the launderers will "roundtrip" the funds, sending them overseas, then later back into the point of origin, to further obscure the criminal source of funds.

• Purchase of goods and services for their clients. Local currency has  a low profile in business transactions.
  

• Purchase of precious metals, such as gold,silver and platinum, for physical smuggling or transport out of the region.

• Purchase of weapons or other commodities for their clients, who will use these items to barter for drugs at the point where they are grown or manufactured or processed.Therefore, making their illicit dollars available for trade in this troubled time would solve both the laundrymen's problems and those of legitimate Lebanese businessmen wishing to avoid the possibility that Lebanese currency will decline in value.

Compliance officers in international banks with current correspondent relationships in Lebanon should also be on alert for large transfers from Beirut. With the current military situation, drug traffickers may be looking to repatriate their operating capital to a sfe place until the dust settles. 

For further reading: Chaos in Middle East may be exploited by laundrymen, World-Check, 13 July, 2006.