Financial Crime World

Complying with Stricter Regulations: Lebanon’s Banking Sector Takes on Money Laundering and Terrorism Financing

The Circular: A Call to Action for Exchange Institutions

The Banque du Liban has issued a circular instructing exchange institutions in Lebanon to adhere to stricter regulations aimed at combating money laundering and terrorism financing. In response, these institutions must take specific measures to prevent these illicit activities.

Key Requirements

Notifications and Information Sharing

  • Notify the Banking Control Commission of any check issued or banking transaction performed on behalf of customers, particularly if the transaction exceeds $10,000 or its equivalent.
  • Include information about:
    • Source and destination of funds
    • Identity of both the beneficiary and economic right owner

Prohibitions

Avoiding Compromised Institutions

  • Do not open bank accounts at banks where any of their owners, partners, shareholders, directors, or authorized signatories hold an account.
  • Refrain from accepting cash deposits in customers’ bank accounts or performing transactions on behalf of third parties without prior authorization.

Compliance and Training

Establishing Efficient Procedures

  • Appoint a Compliance Officer to oversee compliance with applicable laws and regulations.
  • The Compliance Officer must:
    • Attend AML/CTF training sessions
    • Obtain specialized certifications in this field

Additional Requirements for Category A Exchange Institutions

Enhanced Due Diligence

  • Set up a computerized central archive for information collected about money laundering and terrorism financing operations.
  • Verify the skills and ethical qualifications of employees periodically.

Consequences of Non-Compliance

Penalties and Accountability

The Governor of the Banque du Liban, Riad Toufic Salame, emphasized the importance of implementing these measures to ensure the integrity and stability of the Lebanese banking sector. Failure to comply with these regulations will result in penalties for exchange institutions.

By adhering to these stricter regulations, Lebanon’s banking sector can effectively combat money laundering and terrorism financing, ensuring a safer and more secure financial environment for all stakeholders.