Lebanon’s Efforts to Combat Money Laundering and Terrorist Financing Reveal Gaps

A recent assessment by international authorities has highlighted significant gaps in Lebanon’s efforts to combat money laundering and terrorist financing. Despite some progress, the country still faces challenges in implementing effective measures to prevent the misuse of its financial system.

Challenges in Implementing Effective Measures

According to the assessment, Lebanon’s banks and financial institutions have made some strides in applying customer due diligence measures and identifying suspicious transactions. However, notaries public and lawyers have been found to be lacking in their understanding of money laundering risks and are not adequately applying risk-based approaches to mitigate those risks.

Gaps in Implementation

The report also noted that Lebanese authorities have established procedures for handling dual-use materials and have successfully intercepted prohibited trade transactions and imports of dual-use goods. However, there are still gaps in the implementation of licensing and registration procedures, particularly when it comes to identifying the beneficial owner of legal persons.

Lack of Comprehensive Risk-Based Approach

Furthermore, the assessment revealed that Lebanon’s legal framework is based on a 2015 law that criminalizes money laundering and terrorist financing, but some provisions have not been implemented effectively. The country also lacks a comprehensive risk-based approach to monitoring suspicious transactions and has not fully implemented targeted financial sanctions related to terrorism and proliferation.

Areas for Improvement

The assessment highlighted several areas where improvement is needed:

• Enhancing the understanding of money laundering risks among notaries public and lawyers
• Improving the implementation of licensing and registration procedures for dual-use goods
• Strengthening the legal framework to criminalize money laundering and terrorist financing
• Implementing a comprehensive risk-based approach to monitoring suspicious transactions
• Fully implementing targeted financial sanctions related to terrorism and proliferation

International Community’s Concerns

The international community is urging Lebanon to address these gaps and implement more effective measures to prevent the misuse of its financial system. Failure to do so could result in reputational damage, economic instability, and increased risks of money laundering and terrorist financing.

Response from Lebanese Authorities

In response to the assessment, Lebanese authorities have promised to take steps to improve their anti-money laundering and combating the financing of terrorism (AML/CFT) regime. However, more needs to be done to ensure that Lebanon’s financial system is safe from misuse and compliant with international standards.