{"id":6776,"date":"2024-10-27T17:31:01","date_gmt":"2024-10-27T17:31:01","guid":{"rendered":"https:\/\/finderica.com\/lebanon-placed-on-global-money-laundering-grey-list\/"},"modified":"2024-10-27T17:31:01","modified_gmt":"2024-10-27T17:31:01","slug":"lebanon-placed-on-global-money-laundering-grey-list","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=6776","title":{"rendered":"Lebanon placed on global money-laundering \u2018grey list\u2019"},"content":{"rendered":"
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A global watchdog for financial crime has placed Lebanon on its \u201cgrey list\u201d, marking a fresh blow to a country reeling from a years-long economic crisis and now a full-scale war with Israel.<\/p>\n

The Paris-based Financial Action Task Force (FATF) said on Friday that concerns over money laundering and terrorist financing prompted it to add Lebanon to a list of more than 20 countries subject to \u201cincreased monitoring\u201d. <\/p>\n

Lebanon\u2019s ineffective judiciary, and increasingly cash-based economy in the wake of its 2019 banking sector collapse, had raised concerns about illicit flows of money, analysts said. <\/p>\n

The watchdog gave Lebanon\u2019s prosecution and investigation of money laundering a \u201clow\u201d effectiveness rating in a 2023 evaluation. <\/p>\n

While the measure is not as severe as being placed on the watchdog\u2019s \u201cblack list\u201d, a grey listing can still harm a country\u2019s reputation and scare off foreign investors. In the past, the IMF has said<\/a> the designation has had \u201ca large, significant negative effect\u201d on capital inflows into grey-listed countries. <\/p>\n

Much of the financial exclusion associated with grey listing is already being felt in Lebanon \u2014\u00a0many global banks have pulled \u201ccorrespondent\u201d ties with local lenders following the collapse of the currency and banking sector five years ago. <\/p>\n

But the designation could exacerbate Lebanon\u2019s economic problems by making it more difficult for its citizens working abroad to remit cash back to relatives still living there, affecting a pillar of the country\u2019s GDP. <\/p>\n

\u201cThe transfers from outside to Lebanon will be scrutinised very seriously,\u201d said Roy Badaro, a Lebanese economist.<\/p>\n

\u201cBanks would likely face heightened scrutiny, higher compliance costs and delays, making the already fragile banking channel even less reliable for remittances,\u201d said Leila Dagher, Lebanese economist and former governmental adviser. \u201cMoney transfer operators, which have become a more popular alternative since 2019, could also be impacted.\u201d<\/p>\n

Some fear that the remaining correspondent banks could sever ties due to increased compliance costs. \u201cThere are verbal assurances that this will not happen but no one knows,\u201d said Dagher.<\/p>\n

Lebanon was given a year to make reforms to avoid the grey list after a 2023 evaluation by the watchdog found the country only partially compliant in key areas, placing it under a year-long observation period. Political deadlock meant the requirements went unmet. <\/p>\n

\u201cFATF MENA on several occasions asked the Lebanese government to do what it had to do to resolve the problems with all the other players, including those in the judiciary,\u201d said Karim Daher, a Lebanese lawyer focused on fiscal policy and anti-corruption. \u201cThe Lebanese government didn\u2019t take this very seriously.\u201d <\/p>\n

FATF said in its mutual evaluation report in 2023 that Lebanese officials \u201cdo not account for [terrorist financing] risks stemming from the activities of a major local paramilitary organisation\u201d \u2014 an apparent reference to Hizbollah.\u00a0\u00a0<\/p>\n

A year of simmering tensions between Hizbollah and Israel had already depressed a modest post-pandemic economic recovery when the conflict erupted into full-blown war last month. <\/p>\n

Israel has since pounded Lebanon with thousands of air strikes and launched a ground invasion in the country\u2019s south.<\/p>\n

Lebanon must now implement an action plan agreed upon with the watchdog to be removed from its grey list. <\/p>\n

Analysts said the designation could be an impetus for change. <\/p>\n

\u201cA grey listing may be positive as it would put pressure on the authorities into adopting and implementing a reform road map necessary to avoid a blacklisting, and prevent Lebanon\u2019s increasing international financial exclusion,\u201d said Alia Moubayed, MENA chief economist at Jefferies. <\/p>\n

\u201cIt\u2019s a political signal to the political class that they cannot continue,\u201d said Badaro. <\/p>\n<\/div>\n

Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Unlock the Editor\u2019s Digest for free A global watchdog for financial crime has placed Lebanon on its \u201cgrey list\u201d, marking a fresh blow to a country reeling from a years-long economic crisis and now a full-scale war with Israel. The Paris-based Financial Action Task Force (FATF) said on Friday that concerns over money laundering and<\/p>\n","protected":false},"author":2,"featured_media":6777,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[206],"tags":[122,1528,1527,1529,606],"class_list":{"0":"post-6776","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-financial-crime","8":"tag-global","9":"tag-grey","10":"tag-lebanon","11":"tag-list","12":"tag-moneylaundering"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/6776","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6776"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/6776\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/6777"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6776"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6776"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6776"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}