Financial Crime World

Lebanon’s AML/KYC Regulations: A Look at Passports, Identity Cards, and Corporate Requirements

In the heart of the Mediterranean, Lebanon stands as a financial hub with a dynamic economy and thriving banking sector. However, the fight against Money Laundering (AML) and Know Your Customer (KYC) procedures are of utmost importance for any financial center. In this article, we delve into the specifics of the Lebanese regulations.

Identification Requirements

Individuals

Domestic and international individuals seeking to open an account must provide:

  • A passport or identity card
  • Their residence permit

Corporations

For corporations, the requirements are more extensive:

  • Articles of incorporation
  • Certificates of registration
  • Identity documents of the legal representative, directors, and shareholders with a controlling percentage

Lebanese Regulation and Laws

Lebanon has electronic signature laws. The relevant AML laws and regulations, which include Law 318 Fighting Money Laundering, came into effect in 2001, with amendments in 2003 and 2015.

The regulatory body for banking and financial institutions is the Central Bank of Lebanon (BDL), while other financial services are largely unregulated.

Verification of Identities

Yes, Lebanon requires the verification of customers’ identities retroactively.

The country has not undergone a FATF mutual evaluation in the last 3 years; the last evaluation took place in 2009.

Transaction Thresholds

There are no minimum transaction thresholds. However, due diligence is required for cash and cheque transactions below USD10,000. All new clients are required to submit a detailed KYC form.

Document Submission for Individuals and Corporations

Individuals

Require the submission of:

  • A copy of a passport, identity card, individual civil registration, or residence permit
  • A KYC form displaying their residential or work addresses, profession, and average monthly income

Corporations

Legal entities must provide:

  • Articles of incorporation
  • Certificate of registration at the Chamber of Commerce
  • Ownership structure
  • A list showing the stocks or shares
  • A list of authorized signatories
  • The identity of their legal representative
  • Identities of their directors and shareholders with a controlling percentage
  • Legal documents related to the ultimate beneficiary

Beneficial Ownership Requirements

Customers filling out a form detailing the identity of beneficial owners:

  • Name
  • Family name
  • Residential address
  • Profession
  • Financial information

High-Risk Customer Factors

Enhanced due diligence measures are required for various high-risk customer factors, such as:

  • Money exchange businesses
  • Gold and precious stones dealers
  • Restaurants and night clubs
  • Real estate agents
  • Car dealers
  • Foreign Politically Exposed Persons (PEPs) and their families
  • Close associates
  • Offshore companies
  • Companies established in tax havens
  • Non-face-to-face customers
  • Customers dealing through intermediaries
  • Those dealing through fiduciary contracts or trusts
  • Companies with a capital constituted partly or wholly of bearer shares
  • Those with clients or residents from countries that do not adequately apply FATF recommendations

Penalties for Noncompliance

Penalties for noncompliance include imprisonment and fines.

Reporting Suspicious Transactions

Suspicious Activity Reports (SARs) are made to the Governor of the Central Bank in their capacity as chairman of the Special Investigation Committee (SIC). There are no de-minimis thresholds for reporting suspicious transactions, and all transactions, regardless of materiality, need to be reported.