Asharq Al-awsat English Middle-east and International News and Opinion from Asharq Al-awsat Newspaper

Lebanon Parliament Removes Banking Secrecy Rules

Lebanon Parliament Removes Banking Secrecy Rules

Thursday, 28 May, 2020 - 16:45
Lebanese members of parliament attend a legislative session at the UNESCO palace to allow social distancing amid spread of the coronavirus disease (COVID-19), in Beirut, Lebanon April 21, 2020. REUTERS/Mohamed Azakir
Asharq Al-Awsat

Lebanese lawmakers approved on Thursday a law to remove banking secrecy rules in order to better fight rampant corruption that has pushed the country to the edge of economic collapse.

The move opens the way for investigations into bank accounts of current and former officials such as cabinet ministers, legislators and civil servants, state-run National News Agency (NNA) reported.

The restoration of stolen public money has been a key demand of protesters who have been demonstrating since October against Lebanon’s ruling elite, which they blame for widespread corruption.

The approval of the law came two months after the government of PM Hassan Diab approved a decree to abolish the country’s banking secrecy laws.

The new law gives powers to the National Anti-corruption Commission and a Special Investigative Committee at the central bank to investigate bank accounts of officials, NNA said.

For Thursday's session, Lebanese MPs convened inside a Beirut theater so that they could observe social distancing measures imposed during the coronavirus pandemic.

Dozens of anti-government demonstrators briefly clashed with riot police outside the theater, known as the UNESCO palace, as legislators met.

Lebanon has been facing its worst economic crisis in decades, with unemployment figures soaring and the local currency losing more than half of its value against the dollar.

Since defaulting for the first time on its foreign currency debt in March, Lebanon has formed a rescue plan and started negotiations with the International Monetary Fund on $10 billion of aid.

MP Alain Aoun told Reuters Thursday that Lebanese lawmakers are awaiting recommendations from the IMF to include in a draft law which blocks capital transfers from Lebanon for all but limited reasons.

The draft allows annual transfers of up to $50,000 for reasons including medical bills, loans, foreign taxes and the purchase of essential goods. It would be in place for one year and could be extended.

"The aim is to prevent selective transfers of funds done by the banks for some privileged clients - transferring millions abroad for some while some here cannot get $100 from their account," Aoun said.

With no law to stop capital flight, banks have been applying informal restrictions on cash withdrawals and blocking most transfers abroad since the crisis erupted. But critics say these restrictions have been selectively applied and money has continued to leave the system.

Editor Picks