WASHINGTON: The US government has imposed sanctions on two Lebanese brothers accused of selling tainted fuel to Lebanon and engaging in corrupt practices that contributed to the breakdown of rule of law.

Brian E. Nelson, the Treasury Department’s under secretary for terrorism and financial intelligence, said during a press briefing on Wednesday that the US government had taken action against Raymond and Teddy Zina Rahme as a result of their corrupt business practices.

The designation of the brothers took place under the auspices of the Office of Foreign Assets Control, which is part of the Treasury Department.

The Rahme brothers are described as wealthy, powerful and well connected businessmen who have secured state contracts to import fuel for the country’s power plants. The Treasury Department said the brothers obtained the contracts through a questionable process designed to enrich themselves.

During the briefing, attended by the Arab News, Nelson said that in 2019, ZR Energy DMCC, a company controlled by the brothers and based in UAE, won a state contract to import 150,000 tons of fuel to help avoid a power crisis in Lebanon.

“Instead of importing quality fuel, it imported tainted fuel,” he said, adding that the tainted fuel had damaged power plants and this affected the Lebanese population.

In 2020, a Lebanese judge charged ZR Energy DMCC with bribery and money laundering for its role in the fuel import scandal.

Prosecutors in the country did not follow up on the initial charges, Nelson said, but the scandal exposed a powerful network of corruption in Lebanon that had enabled the brothers to falsify the results of tests on fuel samples in exchange for bribes, including expensive gifts and foreign trips.

Lebanon is mired in a long-running financial crisis, during which the currency has lost more than 95 percent of its value against the dollar, but Nelson said the nation’s government has ignored calls for political and economic reforms.

The Treasury Department estimates that Lebanese banks have allowed certain customers to transfer at least $456 million out of the country, he added, while the Lebanese people face deteriorating energy infrastructure as a result of lack of action to introduce reforms and tackle endemic corruption.

Nelson said that the sanctions designation does not connect the Rahme brothers to any particular political group in Lebanon.

“The US Treasury Department designated the Rahme brothers to impose a personal financial cost on those who engaged in corrupt practices at the expense of the Lebanese people,” he added.

“The designation highlights how corruption is particularly endemic to the electricity sector in Lebanon.”

As a result of the sanctions, the Rahme brothers will be unable to do business in the US or have any financial dealings with US organizations or citizens.

“All property and interests in property of the individuals, and of any entities that are owned, directly or indirectly, 50 percent or more by them, individually or with other blocked persons, that are in the United States or in the possession or control of US persons, must be blocked and reported to OFAC,” the Treasury Department said, referring to the Office of Foreign Assets Control.

Nelson also urged Lebanese authorities to make progress in the reforms process.

“Now more than ever, the Lebanese government should implement desperately needed economic and political reforms,” he said. The reforms are required to unlock billions of dollars of international financial aid for the country.

In the midst of the economic crisis in Lebanon, the office of president has been vacant since October, when Michel Aoun’s term ended, because politicians have been unable to agree on a successor.

US assistant Secretary of State for Near Eastern Affairs Barbara Leaf visited the country last month as part of a tour in the region. She later said the US remains committed to supporting efforts to bring stability to Lebanon and its people. She highlighted in particular financial assistance recently provided by Washington to members of the Lebanese Armed Forces.