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The arrest this weekend of a passenger carrying $2.5 million in cash at Beirut’s International Airport marks an important step in the fight against the illegal transport of currency. This action underscores the Lebanese authorities' commitment to tightening controls and curbing such practices.
Under the supervision of General Fadi Kfoury, the airport security service is operating in line with directives from President Joseph Aoun and Prime Minister Nawaf Salam. These measures extend to land and maritime border crossings, targeting any attempts to smuggle money across these entry points.
Lebanon Under Increased Scrutiny
In October 2024, the Financial Action Task Force (FATF) placed Lebanon on its grey list, subjecting the country to heightened scrutiny. The Lebanese state must now implement an action plan to address the “strategic deficiencies” in its fight against money laundering and the financing of terrorism.
Upon securing Parliament's confidence, Justice Minister Adel Nassar established a commission chaired by tax expert Karim Daher, tasked to develop a strategy for removing Lebanon from the grey list within 45 days of the official notification of the ministerial decision.
A Possible Exit from the Grey List
Lebanon has previously succeeded in exiting this list in June 2001, after the adoption of Law 318/2001, which established a legal framework for fighting money laundering. This law notably facilitated the creation of the Special Investigation Commission (SIC), a financial intelligence unit linked to the Lebanese Central Bank (BDL). It also defined money laundering as a crime and established international cooperation agreements for sharing financial information.
In 2015, the Lebanese Parliament reinforced this legislation by adopting Law 44/2015, which expanded its scope and introduced stricter measures, particularly against the financing of terrorism, while identifying several underlying offenses related to money laundering, including drug trafficking, terrorism, corruption, tax evasion, human trafficking, and organized crime. This reform aimed to prevent Lebanon from being placed on the FATF’s blacklist.
Objectives of the Commission
The ad hoc commission, created by Nassar, has the following primary tasks: monitoring the activities of illegal financial institutions, such as Hezbollah’s al-Qard al-Hassan, and ensuring their compliance with legal financial procedures; proposing law amendments aligning with International Monetary Fund (IMF) requirements, particularly those related to financial transparency for businesses and individuals; establishing a legal framework to address the cash economy crisis; restoring confidence in the banking sector; and ensuring the reimbursement of depositors' savings.
Lebanon's real crisis extends beyond the financial and economic collapse, encompassing customs evasion, illegal smuggling, and financial corruption. These factors aggravate the crisis and hinder progress toward a solution. Addressing these issues, which remain unresolved, is the responsibility of the State which remains largely apathetic.
The Philippines: A Model to Follow
On February 22, the Philippines was removed from the FATF’s grey list after implementing the necessary reforms to address gaps in their legal framework concerning money laundering and the financing of terrorism. This move will have a positive impact on the two million Filipinos working abroad, who send funds back home each year.
Currently, 25 countries that have jurisdictions with the highest risks of financial crimes, are on the grey list. These include Algeria, Ivory Coast, Croatia, and Monaco, whereas countries like North Korea, Iran, and Myanmar remain on the blacklist.
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