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Lebanon Inches Closer to Abandoning its Banking Secrecy System

Lebanon Inches Closer to Abandoning its Banking Secrecy System

Saturday, 16 April, 2022 - 09:30
The headquarters of the Central Bank in Beirut, Lebanon (Reuters)

Lebanon might soon abandon its “banking secrecy” system, which has been in place for more than six decades.


The move comes as part of conforming to the requirements that have been agreed upon by the country's executive and legislative authorities, and in preparation for converting the initial deal with the International Monetary Fund (IMF) into a financing program agreement worth $3 billion over four years.


Speaking under the conditions of anonymity, a concerned banking official confirmed to Asharq Al-Awsat that the expedited draft law aimed at approving a package of proposed amendments to a set of effective laws related to banking secrecy would establish a new banking era in line with the latest international requirements for blocking suspicious money outlets.


The official asserts that Lebanon’s currently overlapping systems for savings and money management are no longer in line with the updated rules in the global financial system.


Updating the legal structure for managing funds and the banking system would not only confirm the state's commitment to IMF conditions, but would correct the conditions of the entire financial sector and prepare for its proper repositioning in international markets.


The US Treasury Department had reiterated its request from Lebanese banks to take more effective measures to protect the Lebanese financial system from corruption, by conducting financial audits on the accounts of politically prominent figures and determining the sources of their funds.


Moreover, the US Treasury reminded banks that failing to take the necessary measures may leave them subject to penalties and sanctions.


For their part, bank administrations are striving to demonstrate their firmness in combating money laundering and terrorist financing by complying with international standards. They are opening their doors to the international community in combating all kinds of illegal financing.


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