Banking sources informed the "Central" that the Acting Governor of the Central Bank of Lebanon, Wassim Mansouri, reached an agreement with the U.S. Treasury delegation that visited Beirut last week to expedite reforms that contribute to the restructuring of the banking sector. This sector is seen as critical to controlling money laundering and terrorism financing operations and reducing the size of the cash economy, which has exceeded 50% of the entire economy.
The U.S. Treasury delegation expressed concern about the inability to combat the cash economy, which, if continued, could lead Lebanon to be placed on the gray list and isolate it financially and banking-wise on a global scale. This follows a deadline set by the Financial Action Task Force for Lebanon to implement certain measures to prevent the increase of the cash economy and its implications for combating related crimes, especially since Lebanon had promised the group to apply these measures.
Banking sources noted that Mansouri promised the U.S. delegation to contribute to accelerating the implementation of laws aimed at combating money laundering and terrorism financing, including the restructuring of the banking sector and restoring financial balance. They highlighted that banks had managed, prior to 2019, to effectively control any money laundering and anti-terrorism financing operations, providing reassurance to the global financial system.
Sources did not rule out that Mansouri might hold a meeting with the Banking Association to discuss ways to reduce the cash economy, in addition to regulating the work of currency exchangers concerning the application of laws, despite the presence of many illegal exchangers through whom illicit operations can pass, as they are not subject to Central Bank oversight and do not comply with currency and credit laws.
The Central Bank had organized a workshop for licensed money changers aimed at training them to confront suspicious financial operations and how to apply anti-money laundering and counter-terrorism financing laws.
In this context, banking sources questioned why solutions to the problems facing the banking sector have not been found despite more than four years since the financial collapse. One of the main issues they highlighted is the lack of a decision from the Lebanese state regarding the fate of deposits and the determination of the extent of losses and financial gaps and how these losses are distributed, especially as the Lebanese state still insists on washing its hands of responsibility, considering the banking sector liable for these losses.
These sources expressed satisfaction with a decision by the Council of State not to erase deposits, which has compelled the Lebanese state to find solutions to this issue.
