I.  Commercial Overview

Prime Minister Rafiq Hariri, who took office in October 1992 after Lebanon
emerged from 17 years of civil war, has embarked on an ambitious path toward
Lebanon's reconstruction.  The government's efforts have fostered a resurgence
of investment and commercial activity.  Foreign business interest in Lebanon
has grown rapidly, particularly since 1993.  The U.S. government seeks to
reassure Lebanon of the U.S. commitment to reconstruction, and to encourage
U.S. business to invest in Lebanon's recovery.

The program to rebuild Lebanon's infrastructure provides significant
opportunities for medium and long-term involvement in projects worth more than
usd 10 billion USD over the next ten years.  Lebanon has a traditionally
competitive, open market commercial orientation and the most liberal banking
regime in the Middle East.  There are virtually no restrictions on foreign
exchange or capital movement.  The Lebanese pound has gained value gradually
and continuously against the U.S. dollar since mid-1993.

There are no country-specific U.S. trade sanctions against Lebanon, but there
are other obstacles to trade and investment:

(1) the U.S. Department of State warns all U.S. citizens against travel to
Lebanon.  U.S. passports are not valid for travel in, to, or through Lebanon
without special validation for such travel by the Department of State. (This
restriction will be reviewed in August 1994 and in February 1995.)  The
exceptionally strict security at the U.S. Embassy in Beirut limits commercial
services for U.S. business.

(2) the U.S. Department of Transportation prohibits the sale of passenger air
transportation to Lebanon in the United States.  Other restrictions affect air
cargo from Lebanon to the United States.  Since 1992, air cargo shipments from
the United States to Lebanon have been permitted.

(3) as of mid-1994, OPIC insurance and Eximbank facilities were not yet
available to U.S. Commercial interests in Lebanon.  Exim's and OPIC's absence
puts U.S. interests at a disadvantage.  French, German, and U.K. firms, among
others, can obtain coverage for Lebanon from their respective foreign
government export credit and investment guarantee agencies.

According to Lebanese customs data, Lebanon's imports were worth USD 4.8
billion in 1993.  (Lebanon calculates import values based on a customs dollar
exchange rate of 800 Lebanese pounds.)  Italy, Lebanon's most important
supplier, has 12.7 percent of the market.  The United States is second (10.6
percent).  Germany, France, and Syria are also important suppliers.  Lebanon
is traditionally a key transit country for goods moving between Eastern Europe
and nearby Arab countries.