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Anti-money-laundering laws to tighten

Central Bank Governor Riad Salameh speaks during a conference in Beirut, Thursday, May 10, 2012. (The Daily Star/Mohammad Azakir)

BEIRUT: Lebanon will amend existing anti-money-laundering laws to better combat terrorism funding, Central Bank governor Riad Salameh said Friday.

Salameh spoke at the opening roundtable discussion on recent procedures to stamp out money-laundering activity. He said the newly proposed amendments would be sent to Parliament for approval.

“These [amendments] are designed to buttress the monitoring of terrorism funding in accordance with the Lebanese laws and to organize the cross-border currency movement,” Salameh said.

“Lebanon, as in the case of neighboring countries, is subject to more auditing from the international community and most notably the United States and Europe.”

But Salameh did not elaborate on the proposed measures, and the Cabinet has already approved Salameh’s proposed amendments.

The United States is increasing its pressure on Lebanese banks to clean their balance sheets, improve supervision of all transactions and accounts, block any attempt to fund suspected terrorist organizations, and fully abide by strict international measures to combat money laundering.

In February, the U.S. Treasury accused the Lebanese-Canadian Bank of involvement in money laundering and terrorist funding, prompting Salameh to persuade the management of the bank to sell all its assets and liabilities to another lender to protect the deposits of the Lebanese customers.

SGBL took over most of the assets of the defunct Lebanese-Canadian Bank after making the best offer.

But the incident put all Lebanese banks under the spotlight of U.S. financial authorities which pressed the Central Bank to improve the supervisions of all accounts and transactions.

The U.S. Treasury sanctioned Hezbollah leader Sayyed Hasan Nasrallah Thursday for allegedly helping Syria crush anti-government protests. Lebanese banks say they have a vested interest in complying with all international resolutions to avoid the wrath of the U.S. and European countries.

Bankers admit that they have no other choice but to fully cooperate with the United States in the fight against terrorist funding.

The roundtable, which was organized by the Special Investigation Commission and the Lebanese Financial Reporting Unit, addressed ways for Lebanese banks to robustly apply the recommendations of Financial Action Task Force.

The FATF recommendations are internationally endorsed global standards against money laundering and terrorist financing. They are aimed at increasing transparency and enabling governments to take action against illicit use of their financial system, according to the FATF website.

In 2012, the recommendations have been strengthened in areas specifically aimed at dealing with new threats, such as the financing of weapons of mass destruction, and tougher regulations on corruption.

Adopting a risk-based approach, the FATF recommendations allow financial institutions and central banks to apply their resources to higher-risk regions of the world.

Salameh said the new laws, which will be endorsed by the Parliament soon, include reinforced anti-terror-financing legislation and international transfer regulations.

“Today Lebanon is under close monitoring by the international community, particularly the United States and Europe,” he said.

“We are taking the appropriate measures that allow us to both observe sanctions and preserve our sovereignty [in relation to] Lebanese-currency transactions.”

Salameh said money-conversion operations were being monitored in order to detect any untraceable transactions, adding that they were training employees to better identify suspicious transactions.

Praising the role of the Special Investigation Commission, Salameh said the commission has been enhancing its activities in spite of massive political pressure.

“It is natural that the SIC would not be able to uncover all illegal transactions, but there is no doubt that the commission is assuming its responsibilities to the fullest,” he added.

 
A version of this article appeared in the print edition of The Daily Star on September 15, 2012, on page 4.

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