Latest news with #bankingsecrecy
LBCI
27-06-2025
- Politics
- LBCI
Lebanon's Central Bank denies lifting banking secrecy on corruption suspects
Banque du Liban issued a statement on Friday denying reports that it had unilaterally lifted banking secrecy and reopened accounts belonging to individuals previously accused of corruption. The statement clarified that the decision in question did not originate from the central bank or any of its regulatory bodies, including the Special Investigation Commission. Instead, it said the relevant judicial authorities had issued a final ruling, determining that the statute of limitations had nullified the charges brought against the individuals. Following the court's decision, the judiciary formally notified Banque du Liban that all legal proceedings had ended and requested the lifting of account freezes and the reinstatement of banking secrecy. "The Central Bank complied with this binding judicial ruling, as required by law," the statement said. "Any attempt to hold the bank accountable in this matter is misplaced and misleading to public opinion."
Reuters
18-06-2025
- Politics
- Reuters
Raid of Swiss banking blog sets bad precedent, media group says
ZURICH, June 18 (Reuters) - Press freedom group Reporters Without Borders on Wednesday criticized a raid this month against a prominent Swiss banking blog, saying it set a dangerous precedent for critical journalism in Switzerland. Zurich-based blog Inside Paradeplatz this week said police searched its offices and the home of its founder, confiscating a laptop, a mobile phone and documents in a raid over articles in 2016 about an ex-boss of bank Raiffeisen Switzerland. Prosecutors for the canton of Zurich said the evidence was linked to criminal proceedings into whether the blog violated a provision in banking secrecy laws which the government previously said had never been used to charge journalists. "The banking act has now been used against the media for the first time," Reporters Without Borders Switzerland told Reuters via email. "We see this as a dangerous precedent that further reinforces the already existing chilling effect of the law." The Zurich prosecutors' office said it had acted in accordance with the law and that the legislation's impact on press freedoms was a matter for politicians. An amendment to the Swiss banking act that has been in force since 2015 criminalises disclosure of confidential information passed on by bank employees or other insiders. "Swiss media have to think very carefully about whether and how they report on stories based on leaked bank data - even if, as in this case, there is a clear public interest in publishing," Reporters Without Borders said, noting that journalists risked prison sentences of up to three years. Former Raiffeisen CEO Pierin Vincenz was convicted of fraud in 2022 before a court overturned the ruling last year and referred the case back to prosecutors.
Arab News
08-05-2025
- Business
- Arab News
Hezbollah should no longer be above Lebanese law
Lebanon, which was once considered the Switzerland of the Middle East, held on to banking secrecy long after the Helvetic country gave it up. Despite the 2019 crisis and the freeze on bank deposits — with all the implications we know — the system maintained this secrecy until the end of April. Then, Lebanon's parliament finally passed a key reform granting regulatory bodies expanded access to bank account information. This was one of the main conditions set by the International Monetary Fund before it would dispatch its promised financial package. The reform allows government entities such as the central bank to audit customer accounts, including retroactively for up to 10 years, without needing a specific reason. On paper, this sounds like a positive step for Lebanon. Yet, if we look into the Lebanese model, how the banks have operated and how parallel financial systems are spread, we might want to say: let us wait and see. One cannot forget that the freezing of deposit accounts and the system of 'fresh' dollars — US dollars in the Lebanese banking system either in cash or received via international bank transfer after October 2019 — was unilaterally decided by the banks, not by another authority. This system allowed Lebanese banks to distinguish between newly deposited foreign currency and 'lollars,' the pre-crisis dollar deposits that are effectively trapped in the system, with access to them heavily restricted. Even worse, Hezbollah has developed a complete financial system that is unregulated and unsupervised. Will the government apply this expanded capacity to scrutinize Hezbollah and its financial dealings? This also should be a priority. Just as these banking reforms were achieved through international pressure, one can imagine that the same will apply to requests for information. I have little hope that this will uncover any corruption schemes or lead to anyone being seriously questioned. Even though Prime Minister Nawaf Salam hailed the move as essential to restoring public and international trust and addressing decades of financial opacity, only time will tell. Nevertheless, it is a necessary step toward meeting the reform requirements for the $3 billion IMF bailout agreement. For now, this might be the main goal. It is undeniable that the new Lebanese leadership is asking the right questions and setting the right agenda. Whether it has the capacity and will to implement reforms while promoting an economic relaunch remains to be seen. While the question of Hezbollah's surrender of its arsenal is stalling, its parallel financial system should be the target of an official investigation. Any entity conducting regulated financial activities without the proper licenses should be sanctioned and shut down. It is very clear that Hezbollah has a sophisticated business and financial network. This network operates with total impunity, outside of Lebanon's official banking regulations. It has allowed the Iranian proxy to funnel funds for its military, political and social activities — all despite the country's economic collapse and international sanctions. The nerve center is the Al-Qard Al-Hasan Association, which has been sanctioned by the US but continues to operate undisturbed by the Lebanese authorities. It clearly falls under the scope of regulated activities, as it offers loans and microfinance to Hezbollah loyalists. The new leadership in Lebanon must be aware that this system includes illicit revenue from illegal activities. There have been numerous press reports on Hezbollah's role in global drug trafficking, money laundering and smuggling. This extends beyond Lebanon's borders, reaching as far as South America and Africa, where Hezbollah has maintained a key role in the illegal diamond trade. These activities have generated billions and, as the merchandise moves one way, cash moves the other through couriers and 'hawala' networks. Scrutiny should also include tracking the financial flows corresponding to goods and cash provided by Iran. These flows have enabled Hezbollah to develop informal markets in many sectors, such as real estate, pharmaceuticals and smuggled convenience and household goods. In short, Hezbollah should no longer be allowed to operate above state law. This privileged status is the greatest source of corruption. It is a remnant of the Syrian occupation. This must be stopped, as one cannot expect a genuine tougher stance on banking impunity (despite the new laws) if the state is unable to rein in Hezbollah's illicit financial activities. This is the breach that must be addressed. The new leadership in Lebanon must be aware that Hezbollah's system includes illicit revenue from illegal activities. Khaled Abou Zahr This also means that Hezbollah's social activities, which act as a main lever, must come under state supervision. Clinics, schools and low-cost stores should become a point of focus. This entire parallel system cannot be allowed to continue, as it marks the end of Lebanon. Within the new geopolitical landscape, if the state fails to reimpose its authority, then chaos will soon ensue. There is no doubt that change will be difficult to implement. Hence, we may fall back into a system that looks positive on paper but is entirely negative in reality. This is why a complete overhaul of the country is needed. The construction of a new Lebanon faces many challenges and probably calls for a new political system that empowers the country's will. Yet, for now, the new leadership must find ways to reestablish the country's sovereignty. This means that the steps taken should not be imposed by the international community, but led and decided from within, for the good of the country. Bringing banks and Hezbollah under the rule of law will be a clear indicator of what is to come.
