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Building A Financial Intelligence Unit In a Bank Secrecy Environment Lebanon’s Experience Presented by A. Mansour Sec PowerPoint Presentation
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Building A Financial Intelligence Unit In a Bank Secrecy Environment Lebanon’s Experience Presented by A. Mansour Secretary Special Investigation Commission . Lebanon on the NCCT List.

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slide1

BuildingA Financial Intelligence Unit

In a

Bank Secrecy Environment

Lebanon’s Experience

Presented by

A. Mansour

Secretary

Special Investigation Commission

lebanon on the ncct list
Lebanon on the NCCT List
  • FATF placed Lebanon in 2000 on the list of non-cooperative countries /territories (NCCT) due to the following reasons:
    • No AML Law
    • Major Banking Center in the Region
    • Strict Banking Secrecy Law
    • Due Diligence accord adopted by the banks in 1996 was insufficient
    • No measures for Fighting money laundry in place
bank secrecy law lebanon
Bank Secrecy law - Lebanon
  • Law passed in 1956 even prior to the promulgation of the law of Money & Credit in 1963
  • The law Provides total bank secrecy whereby secrecy cannot be lifted even by a court order
  • Secrecy can be lifted only in the following cases:
    • Bankruptcy
    • Death (Death of one of the holders of a joint account does not lift secrecy)
    • Client approval
    • Litigation between client & bank
aml cft regime fiu creation
AML/CFT Regime & FIU Creation
  • In 2000 a Team was set up at BDL to create public awareness that lead to a “High Political Commitment” on AML
  • In 2001 AML law 318 was passed and BDL issued Reg 83
  • The Special Investigation Commission (Lebanon’s FIU) was set up with additional Powers & Functions:
    • Exclusive powers on Lifting Bank Secrecy & Freezing Accounts
    • Carry out Financial investigations with the Capacity to request information from : Judicial, Law enforcement , Customs , and all Administrative agencies
    • Supervision : Examinations of Reporting entities on Compliance with AML law & regulations , as the banks prudential supervisor does not have access to customers’ deposit accounts
  • Set up 2 National committees on AML & CFT
aml cft regime set up
AML/CFT Regime – Set Up
  • Other steps taken to put in place an AML/CFT operational regime :
    • Developed SIC appropriate organizational structure
    • Created public AML/CFT awareness in the business community : Banks, Fis, Money dealers, Insurance,..
    • Tracked developments of international standards to prepare for necessary amendments to AML law & regulations
    • Established International Cooperation by joining Egmont Group in July 2003
    • Launched Regional initiatives : lead the efforts to the creation of MENFATF in Nov 04
aml law 318 of 2001 reg 83
AML law 318 of 2001 & Reg 83
  • Mile stone in the Lebanese legislation on AML. It defines, criminalizes, and imposes sanctions on ML
  • Establishes the SIC as an “independent legal entity “ with a “Judicial Character” at the Central Bank of Lebanon
  • Immunity for SIC staff and Reporting entities on actions taken while discharging their duties under law 318
  • Reg 83 covers various AML procedures ranging from KYC/CDD requirements, filing of STR’s & other control procedures
lifting bank secrecy mechanism
Lifting Bank Secrecy Mechanism
  • SIC receives STRs or ROAs requesting information about a Bank client, a transaction , or bank account
  • In cases of ROA the SIC request the reasons behind the request to verify if the underlying predicate crimes are within the scope of AML/CFT laws of Lebanon
  • SIC writes to the bank or financial institutions asking for the provision of the required information
  • SIC request information on KYC, account balances or accounts statements, cards, other details on the account
  • Banks & financial institutions have to respond within a week
  • SIC analyses the received information and disseminate to the relevant parties
2001 2010 the sic handled 1573 case classified by predicate offences
2001-2010 The SIC Handled 1573 Case Classified by Predicate Offences
  • Secrecy Lifted: 188 cases
  • Information Provided Involving Secrecy: 738 cases
  • Freezing Accounts: 145 cases
bank secrecy international cooperation rec 40
Bank Secrecy & International Cooperation, Rec 40
  • Lifting bank secrecy is essentail to be in compliance with Rec 40
  • International cooperation is of key importance when assessing the effectiveness of individual jurisdictions and multi-lateral efforts to combat ML&TF
  • Current issues under consideration to review Rec 40 :
    • Status of the FIU should not affect their capacity to exchange information
    • What info the FIU should be able to access directly or indirectly ( Calls to revisit Rec 26 before Rec 40)
    • FIU to respond to ROAs same as STRs
    • Easing of restrictive conditions to cooperation and consistency with Rec 36-39 ( Mutual legal assistance, Dual criminality, freezing of accounts, Extradition)
in brief
In Brief
  • Lebanon’s answer to Bank Secrecy was an AML/CFT law that created a “Multifunctional” FIU , empowered with to lift Bank Secrecy
  • Strict implementation of the law
  • Active and enhanced inter-agency & international cooperation

Results: Lebanon is in compliance with

International AML/CFT requirements while preserving its own particularities in respect of the Bank Secrecy law