As the Lebanese and Syrian markets thirst for dollars due to the economic crisis as well as the sanctions implemented through the “Caesar Act”, a different kind of dollar is making its way into the market. The current severe shortages of dollars in the banking system, are forcing people to resort to alternative sources of dollars, mainly the black market. This has given rise to the dangerous and fraudulent activity of injecting millions of ‘frozen’ dollars from Libya, Iraq, and Iran. These bills are making their way mainly to the South of Lebanon, Beqaa, and the Southern Suburb of Beirut.
From Libya to Haret Hreik
Sources told Janoubia that large sums of frozen dollar bills were smuggled from Libya through Hezbollah’s military channels directly to Haret Hreik while some made its way to Damascus and other Syrian regions. The Syrian authorities managed to arrest several promoters involved in these operations in Aleppo. Investigations confirmed that the source of the bills was Lebanon. Oddly, Lebanese authorities have not yet uncovered any details about those responsible for bringing in these millions of dollars according to the sources. These bills have been circulating since the end of June 2020 up until this very day.
Legal experts are warning citizens from falling prey to advertisements offering these dollar bills at half-price; compared to their legitimate alternative. This means that 2 ‘frozen’ dollars are sold for the price of 1 dollar. They go on to explain that the promotion of these bills is synonymous to the promotion of counterfeit bills. Although these bills are not counterfeit and are in fact authentic at the surface level, they are just as invaluable as counterfeits. These bills can no longer enter the banking system, as their serial numbers are globally blacklisted.
What is the Frozen Dollar?
Financial experts told Janoubia that the most accurate version of the account on the source of these ‘frozen’ dollars is that they came from Libya following the popular revolution that overthrew Qaddafi in 2011. At the time, former President of the United States Barack Obama signed an executive freezing all the assets of Gaddafi, his family, and his senior officials. These frozen assets also affected the Libyan government, its central bank, and its wealth fund. As a result of that decision, millions of dollars (the sum of which is unknown) became unusable and accumulated inside the banks. As the country’s security and political situation deteriorated, many of those bills were smuggled to neighboring Arab countries according to multiple sources.
Other accounts claim the phenomena dates back to the 1990-1991 Gulf war and the US occupation of Iraq in 2003. Back then large sums of dollars were stolen from multiple Iraqi banks. According to a Libyan currency stock market website, these bills were reported to Washington in order for their serial numbers to be frozen. Indeed, the banks communicated with the United States administrations, and the serial numbers were frozen in a way that they can never be deposited in the banking system or even transferred electronically.
These frozen bills will thus remain in the black market until they are destroyed or decay out of use without replacement.