Lebanon central bank can’t prevent watchdog grey-listing
On August 22nd, acting central bank governor Wassim Mansouri announced that Lebanon’s central bank (BdL) is working to prevent the country from being added to the “grey-list” of nations monitored by financial crime watchdog the Financial Action Task Force (FATF), according to The Arab Weekly and agencies
Lebanon initially received a preliminary assessment in 2023 recommending grey-listing due to significant gaps in its anti-money laundering efforts, transparency in identifying firms’ beneficial owners, and legal cooperation in asset freezing and confiscation.
It was given a year to address those gaps before a final ruling that will be announced at the FATF’s plenary meeting in October.
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A diplomatic source revealed that in 2023, the central bank’s special investigations commission was actively lobbying FATF member states to alter the assessment score.
Inclusion on the grey-list would further aggravate Lebanon’s financial crisis, which has persisted since the 2019 currency collapse and rampant hyperinflation. Most depositors still can’t access their savings and many foreign banks are giving the cold shoulder to Lebanon.
Being placed on the FATF grey-list could hinder a country’s capital flows, as banks often sever relationships with clients in high-risk nations to minimize compliance expenses. Grey-listing also poses the risk of reputational harm, potential downgrades in credit ratings, difficulties in accessing international financing, and increased transaction costs.
The Arab Weekly and agencies
