The Lebanese Army has found and removed a fuel smuggling pipeline at the country’s northern border with Syria.
The Army released a statement Wednesday, adding that around 30 meters of pipes were confiscated on the Lebanese side of the border.
“This step comes as part of the continuous efforts by the Army to combat smuggling at the Lebanese-Syrian border and to [control the border] using all available methods,” the statement read.
No further details were provided.
Fuel smuggling in the country has become increasingly public as Lebanon begins talks with the International Monetary Fund in a last-ditch effort to save its fast-sinking economy.
Earlier in May, trucks headed toward the Syrian border were stopped
Border control blame game
The announcement comes a day after former Defense Minister Elias Bou Saab blamed the Army for not controlling the border or closing illegal border crossings during his time at the ministry.
Bou Saab, currently a Free Patriotic Movement (FPM) MP, said that he had met with Hezbollah’s interlocutor to the Lebanese security forces, Wafik Safa, at the time to discuss the border situation.
“I told him [Safa] that the Lebanese Army can’t be present in an area where there’s smuggling going on and a blind eye is turned to it,” Bou Saab told MTV Lebanon on Tuesday. Safa told him to “give me 24 hours.” Bou Saab added: “He came back and said we [Hezbollah] have nothing to do with this. You guys made a decision in cabinet [to lock down illegal border crossings]: go implement it.”
In recent weeks, Prime Minister Hassan Diab’s government has tried to take credit for cracking down on illegal smuggling. A handful of suspects have been arrested and their vehicles or trucks confiscated in the act of smuggling.
Yet, Bou Saab doubled down on blaming the Lebanese Army for not doing the same when he was minister.
“I sent a list of 10 [illegal] border crossings to be shut down to the Army. I was told that there were logistical problems and it couldn’t; be done. Let the discussion be with the Army chief from here on out ... to see what they are missing,” Bou Saad said.
“The ball is in the Army’s court,” he said, in an effort to distance himself from blame.
According to Bou Saab, it is not only Hezbollah smuggling. “All parties are doing it. Some border crossings in north Lebanon have no Shiites in the area. There are some Christian areas that smuggle too.”
He referred to the recent arrests by the Army as “propaganda.”
This is not the first time Bou Saab or the FPM have targeted the Lebanese Army. During the anti-government protests last year, Bou Saab and the FPM criticized the Army for not reopening roads blocked by protesters.
Crackdown on smuggling
Beyond the pipeline, the government has made more concentrated efforts lately to crackdown on smuggling.
Videos have surfaced on social media of diesel tankers heading toward Lebanon’s border with Syria carrying subsidized fuel and wheat. On May 11, customs officers and local police seized two trucks carrying camouflaged tanks with diesel. However, the force was attacked by a group of people, allowing the vehicles to flee before being rearrested shortly after, reported Lebanon’s National News Agency.
But the problem is deeper than two trucks making their way into Syria.
In 2019, fuel imports in Lebanon doubled compared to 2018, which Firas Maksad, an adjunct professor at George Washington University, said is one indication that smuggling is on the rise. Videos showing trucks moving toward the border and comments from government officials, including Central Bank Governor Riad Salameh, are also indicators that smuggling is becoming more common.
“We don’t know if all of these imports are for domestic consumption,” AFP reported Salameh saying in October 2019.
Smuggled fuel deals a further blow to the country’s sinking economy as subsidized goods make their way across the border.
Lebanon subsidizes its fuel, wheat, and medicine imports, allowing importers to buy dollars at the official exchange rate of 1,507 Lebanese lira to the dollar. On the street, inflation has skyrocketed, and in the exchange shops, the rate for dollars is now over 4,000.
Across the border in Syria, the fuel can sell for three to four times the price it’s purchased at in Lebanon, said Lokman Slim, co-director of documentation and research at UMAM, a Beirut-based research group. The same applies for flour that crosses the border.
“It’s something that bankers in Lebanon have been talking about for quite some time,” Maksad said.
The country faces a severe dollar shortage that has driven up inflation, and the smuggling has exacerbated the greenback shortage, which was primarily driven by a lack of remittance flows, a stoppage of foreign investment, and the war in Syria.
A banking source, speaking on condition of anonymity, explained how this smuggling in part has contributed to the country’s dollar shortage.
When the central bank gives US dollars to exchange shops, those dollars should stay in Lebanon to circulate, maintaining the level of dollars in the country, the source explained.
But currently that isn't happening.
“Exchangers sell to Syrian merchants, and those dollars end up in Damascus, Tehran, and Aleppo,” the source said.
Before 2018, when fuel was smuggled, merchants would be paid in dollars that went to Syria but eventually would return to Lebanon as deals were struck back and forth across the border.
In 2019 this began to change. Syrians in Lebanon began to be paid in Lebanese lira, and as banks in Syria piled up with Lebanese currency, purchasers began to use Lebanese lira, rather than dollars, to pay for the fuel, the source said, thus leading to less dollars flowing back into Lebanon.
Slim said that the smuggling isn’t a new problem in Lebanon, and people living close to the border knew it was happening, but now its begun to take on and “industrial shape.”
“It’s no longer just a group of smugglers enjoying some protection,” he said. “It’s more of a policy, and it’s happening at a moment when Lebanon is short of funds.”
Lebanon’s foreign currency reserves have been depleting for months. In mid-March, they were estimated to be around $22 billion. In mid-September 2019, foreign reserves stood around $38.7 billion.
The country is currently in the throngs of its worst economic crisis in decades, and has recently begun talks with the IMF.
Previously, Lebanon asked international donors for $4-5 billion in soft loans to purchase wheat, fuel, and medicine. In March, the country defaulted on its Eurobond payments, citing the need to purchase essential provisions, triggering talks with the IMF.
“The Lebanese government wants to put its best foot forward, and those lines about diesel smuggling into Syria is not the way to do it,” Maksad said. “It’s highly problematic that smuggling continues.”
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