Financial Crime World

New Lebanese Law: Cracking Down on Money Laundering and Terrorist Financing

Lebanon’s Parliament has passed a new law, Law No 44, aimed at fortifying the country’s stance against money laundering and terrorist financing. This article highlights key elements of the new legislation.

Defining Illicit Funds (Article 1)

The new law outlines the definition of illicit funds derived from criminal activities like:

  • Narcotic drugs trafficking
  • Terrorism financing
  • Insider trading
  • Corruption

Additionally, the scope of reportable offenses is expanded to include:

  • Illegal arms trafficking
  • Smuggling
  • Human and environmental crimes

Money Laundering (Article 2)

Money laundering is defined as:

  1. Concealing the illicit origin of funds
  2. Providing false justifications for their source
  3. Transferring, transporting, or investing laundered funds in various assets or transactions

Money laundering is considered a separate offense that does not necessitate a charge of the underlying predicate offense.

Penalties for Money Laundering and Terrorist Financing (Article 3)

Individuals involved in money laundering or terrorist financing operations face penalties, including:

  • Imprisonment
  • Fines up to twice the amount laundered

Financial Institution Obligations (Article 4)

Financial institutions are obligated to:

  • Implement customer due diligence measures
  • Retain copies of documents for at least five years

Regulated Entities and Reporting Requirements (Article 5)

  • Lawyers
  • Notaries
  • Insurance companies
  • Casinos
  • Real estate dealers
  • Merchants of valuables

are subject to different reporting requirements. The Special Investigation Commission (SIC) is established to ensure compliance.

The Special Investigation Commission (Article 6)

The SIC, an independent legal entity, is charged with:

  • Receiving suspicious transaction reports
  • Investigating operations suspected of money laundering or terrorist financing
  • Ensuring compliance by financial institutions and other parties subject to the law

SIC Decisions and Coordination with Authorities (Article 8)

SIC decisions, such as:

  • Lifting banking secrecy
  • Freezing accounts
  • Requesting the prohibition to dispose of assets

are binding on the concerned parties and authorities. The SIC communicates directly with domestic and foreign authorities to conduct investigations and coordinate efforts in ongoing cases.