"We will not foot the bill" says a banner hung by protesters outside the central bank in Beirut in 2020. (Credit: AFP)
BEIRUT — Parliament’s Finance and Budget Committee Monday approved a law that lifts banking secrecy from central bank’s accounts, which would allow a financial audit of BDL to take place, the committee’s head Ibrahim Kanaan said on Twitter. The law’s next stop will be a vote in Parliament.
Here’s what we know:
• In today’s Finance and Budget Committee meeting, the representative of the Justice Ministry on the committee proposed punishment for anyone who obstructs the forensic audit process. The proposal was adopted by a large number of the MPs present and will be discussed at a future session.
• So far, no new information has been received from Alvarez & Marsal confirming whether or not the central bank has surrendered all the required data for the company to complete the audit.
• The forensic audit of the central bank, as well as audits of other government institutions, are core conditions of any financial assistance deal with the International Monetary Fund.
• The fate of the forensic audit of BDL has hung in the balance for nearly a year and a half. Here's a look back at some of the significant developments in its tumultuous history:
• On July 21, 2020, Prime Minister Hassan Diab’s government appointed Alvarez & Marsal (A&M) to conduct a forensic audit of the central bank. Firms Oliver Wyman and KPMG were also selected to conduct an accounting audit of the central bank.
• On Nov. 4, 2020, the central bank said that it had provided its own accounts to Alvarez & Marsal, but that it should be the government that submits full state accounts to the audit. It further adds that this will spare the central bank from violating banking secrecy laws.
• “There is no banking secrecy when it comes to public funds and accounts at BDL; it simply does not exist,” Caretaker Justice Minister Marie-Claude Najm said on Nov. 4, 2020. The Beirut Bar Association agreed. “Banque du Liban, as the public sector bank, must provide the company appointed by the government to conduct a financial forensic audit, similar to the auditing companies that monitor its work, with all the information required of it in order for the forensic auditing company to carry out its work to the fullest,” it said, adding, “There is no banking secrecy on public money.”
• On Nov. 19, 2020, Alvarez & Marsal confirmed its withdrawal from the forensic audit, after it said it did not receive the information required to carry out the job.
• On Dec. 21, 2020, Lebanon’s parliament passed a law to lift banking secrecy for one year, moving one step closer to the forensic audit.
• On Sept. 10, 2021, Prime Minister Najib Mikati formed a new government, and on Sept. 17, 2021, the new Finance Minister Youssef Khalil signed a fresh contract with Alvarez & Marsal.
• On Nov. 23, 2021, the central bank said that it would fulfill all data requests from Alvarez & Marsal for a forensic audit of its accounts amid reports that the firm was set to pull out due to a lack of cooperation.
• On Dec. 29, 2021, the law temporarily lifting banking secrecy on public accounts lapsed. Parliament did not extend it, preferring to send it back to the Budget and Finance Committee for further review.
• On Jan. 4, the Union of the Central Bank Employees announced their refusal to give “to those in charge of the financial and forensic audit the names and salaries of current and former employees of Banque du Liban, as well as [information concerning] the transactions on their bank accounts.”