Lebanon Central Bank scrutinizes out-of-country cash transfers by PEPs


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Central Bank: Which PEPs transferred cash to foreign accounts during economic unrest?

Lebanon has contended in recent months with anti-government protestors. And in a savvy move to stop outflows of potentially ill-gotten money, the Central Bank of Lebanon wants to know which PEPs sought to transfer money out of the country.

In a brief Reuters report last week, we learned that the Central Bank of Lebanon requested that commercial banks review and report any efforts by Politically Exposed Persons (PEPs) to move money out of the country.

The focus on PEPs—especially politicians and government officials–is due to the move by the Central Bank to block transfers out of the country during a period of unrest and protest from October through December of 2019.

The Central Bank’s anti-money laundering department, in a circular dated Jan. 9, 2020, requested that commercial banks identify the source of funds deposited in accounts in question and to report suspicious activity related to these accounts and to transfers out of the country.

According to US News and World Report, Lebanon’s Banking Control Commission issued another circular, dated Jan. 14, 2020, that “asked banks for the dates and sizes of transfers to Switzerland since Oct. 17, without asking for the names of the customers who made the transfers.”

The economic crisis in Lebanon has spurred protests against the government, and various factions have used the unrest to seek advantage. Lebanon has a massive public debt and has sought relief and support from various nations. But supporters and lenders have pressed the nation to deal with corruption believed to be rampant among many politically exposed persons.

The domestic economic crisis, according to US News and World Report, resulted in a stalling of the inflow of foreign hard currency crucial to financing the deficit and trading on the international market. Banks have moved to control transfers of dollars abroad by account holders, and that has resulted in protests against various banks.

Caretaker Prime Minister Saad al-Hariri has defended the efforts by the Central Bank to scrutinize the transfers by politically exposed persons, and he has defended the governor of the Central Bank against complaints.

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