Anti Money Laundering (AML) in Lebanon
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Money laundering is a minor problem in Lebanon. Banking sources emphasize that Lebanon is not a significant financial center for money laundering, but acknowledge that it does have a number of vulnerabilities. Lebanon imposes no controls on the movement of capital. It has a substantial influx of remittances from expatriate workers and family members.
In 2001, Lebanon enacted Law No. 318, which created a framework for lifting bank secrecy, broadening the criminalization of money laundering beyond drugs, mandating suspicious transaction reporting, requiring financial institutions to obtain customer identification information, and facilitating access to banking information and records by judicial authorities. The law was amended in 2003 to criminalize terrorist financing.
The provisions of Law No. 318 expand the type of financial institutions subject to the provisions of the Banking Secrecy Law of 1956 to include institutions such as exchange offices, financial intermediation companies, leasing companies, mutual funds, insurance companies, companies promoting and selling real estate and construction, and dealers in high-value commodities. In addition, Law No. 318 requires companies engaged in transactions for high-value items (e.g., precious metals or antiquities) and real estate to report suspicious transactions.
All financial institutions and money exchange houses are regulated by the Central Bank. Law No. 318 clarified the Central Bank’s powers to require financial institutions to identify all clients (including transient clients), maintain records of customer identification information, request information about the beneficial owners of accounts, conduct internal audits, and exercise due diligence in conducting transactions for clients.
AML Training in Lebanon
Under Lebanon's Regulations on the Control of Financial and Banking Operations for Fighting Money Laundering, financial institutions must ensure that all staff members participate in training to remain up-to-date on the latest AML developments.
The Economy of Lebanon
The 1975-1990 civil war seriously damaged Lebanon's economic infrastructure, cut national output by half, and all but ended Lebanon's position as a Middle Eastern entrepot and banking hub. In the years since, Lebanon has rebuilt much of its war-torn physical and financial infrastructure by borrowing heavily - mostly from domestic banks.
Banking In Lebanon
The Central Bank of Lebanon, Banque du Liban (BDL), controls bank liquidity by adjusting discount rates, intervening in the open market, and determining credit facilities to banks and financial institutions. It regulates banks' credit in terms of volume and types of credit, by imposing a credit ceiling, by directing credits toward specific purposes or sectors, and by setting the terms and regulations governing credits in general.
The Central Bank imposes on banks reserve requirements, as well as penalties should shortfalls occur.
The BDL grants licenses for the establishment of banks, financial institutions, brokerage firms, money dealers, foreign banks, leasing companies and mutual funds in Lebanon. The Banking Control Commission controls and supervises these institutions. Conferring with the Association of Banks, the BDL issues circulars and resolutions governing the relations of banks with their customers.
The legal tender is the Lebanese pound. There are 14 denominations of banknotes issued by the Central Bank: the LBP 1, 5, 10, 25, 50, 100, 250, 500, 1,000, 5,000 10,000, 20,000, 50,000 and 100,000.
Coins are found in denominations of 50, 100, 250, and 500 pounds, as well as piastres coins in 5, 10, 25 and 50.
Other Key Statistics of Lebanon
Time Zone: UTC+2 (7 hours ahead of Washington, DC during Standard Time). Daylight saving time: +1hr, begins last Sunday in March; ends last Sunday in October.
Location: Middle East, bordering the Mediterranean Sea, between Israel and Syria.
Population: 4,461,838 (June 2015 est.).
Labor Force: The unemployment rate is 20%.
Languages Spoken: Arabic (official), French, English, Armenian.
Trade Organizations: Lebanon is an observer of the World Trade Organization (WTO).