The bank has been stopped from acquiring new customers from high-risk jurisdictions for 126 days and the FCA has fined two of its approved persons.
Anthony Wills, the former compliance officer at the Bank of Beirut, and Michael Allin, the internal auditor, have been fined £19,600 and £9,900, respectively.
The FCA said: "The Bank of Beirut repeatedly provided the regulator with misleading information after it was required to address concerns regarding its financial crime systems and controls.
"Wills and Allin failed to deal with the regulator in an open and cooperative way when responding to queries about the actions taken to mitigate financial crime risk.
"Wills and Allin were responsible for addressing a number of the actions required of the firm. Wills handled most of the communication between the firm and the regulator and he sought to dismiss concerns that the Bank of Beirut was not properly implementing the required changes.

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"Allin provided false assurance that the improvements to the firm's processes had been made. The FCA recognises that both Wills and Allin were influenced by senior management. However, the FCA relied on the word of Wills and Allin to gain comfort that the changes to the firm's processes had been completed. Given Wills and Allin's position as approved persons, they should have resisted their senior management in these circumstances."
Georgina Philippou, acting director of enforcement and market oversight, said:
"It is essential to consumer protection, market integrity and the prevention of financial crime that we can rely on firms giving us the right information at the right time. Bank of Beirut's failings impeded us and left it open to the risk that it might be used for financial crime.
"Equally worrying was the fact that Wills and Allin provided a number of misleading communications to us, which is a serious breach of their responsibilities as approved persons. We are reliant on compliance officers and internal audit to act as a first line of defence, to support effective regulation at firms and to show backbone even when challenged by their colleagues."
Concerns about the culture within Bank of Beirut became apparent following supervisory visits to the firm in 2010 and 2011, the FCA said.
The regulator believed too little consideration was being given to the risk that the firm be used for financial crime. The bank was required to take a number of actions to address these concerns.
However, the bank "repeatedly provided misleading information" to the regulator indicating that "it had completed remedial actions when it had not".
Bank of Beirut settled with the FCA at an early stage of the investigation. Had it not done so, it would have faced a fine of £3m and a restriction of 180 days. Wills and Allin also settled at the first opportunity, had they not they would have faced financial penalties of £28,000 and £14,100 respectively.