A small number of protesters gathers near the Grand Serail as an exceptional cabinet session convenes. (Credit: Abbas Mahfouz/L'Orient Today)
BEIRUT — Prime Minister Najib Mikati on Saturday announced that Justice Minister Henri Khoury has been tasked with addressing the “shortcomings” in the judiciary in relation to the judicial orders that froze the assets of some seven commercial banks in the country this week and in light of which cabinet met at the Grand Serail for an exceptional session. “Analogously to what was asked of the justice minister, the finance minister was asked to coordinate with BDL to immediately take the necessary measures to remove the withdrawal limits on salaries deposited in banks,” Mikati said, adding that developments will be “closely followed [by the Cabinet] in the coming days.”
Here’s what we know:
• After the meeting, Mikati said that “the cabinet is not meeting to protect any sector in itself but to serve and to maintain balances in the country. We’re protecting institutions, the judiciary and a country, not anyone in particular.”
• Mikati said that the cabinet would “not intervene in judicial matters to maintain the principle of the separation of authorities and the complementary nature of powers and their coordination and balance” and decided that “an initiative be taken to address this matter through the different ranks of judicial authorities each in its specialty.”
• “Four judges present in the session concurred that the measures taken were not in their right place, hence our call to realign the course of justice,” Mikati said, citing “exceedance of the public prosecution’s prerogatives”, that “Banque du Liban must be asked before holds can be placed on any bank”,and “items 15, 16, 17 and 19 in the Criminal Procedure Law.”
• When asked why the cabinet did not intervene in the port blast investigation after it was repeatedly halted, Mikati said the two matters were “entirely different.”
• As the session started, dozens of protesters gathered at the nearby Gen. Fouad Chehab highway. Commenting on protesters’ claims that the cabinet convened to protect banks, Mikati said that the meeting aimed to “protect small depositors and the course of justice.” The cabinet head added that “[they are] expediting the recovery plan and urged the parliament to pass the capital control law.”
• Mikati repeatedly said that the “the rights of depositors, especially small depositors, will be preserved,” adding that the public should not “get happy about the measures taken against banks because they’re being undertaken by large depositors and if they make their withdrawals there won’t be anything left for the rest.” The premier stated that “90 percent of depositors’ funds will be guaranteed by the Lebanese state.”
• On Friday, Mikati said that judges were stoking tension within the country and called for an exceptional cabinet session, adding that he and Justice Minister Henri Khoury had agreed to ask the Mount Lebanon public prosecutor to take “appropriate measures on this [issue],” but without specifying exactly which issue.
• On Monday, Mount Lebanon Public Prosecutor Judge Ghada Aoun froze the assets of five Lebanese banks (Bank of Beirut, Bank Audi, SGBL, Blom Bank and Bankmed) and members of their boards while she investigates their transactions with Banque du Liban. The judge also issued travel bans against the heads of the banks' boards. Then on Thursday Judge Aoun issued another ruling, freezing all the assets of Creditbank and banning its chairman Tarek Khalife from leaving the country.
• Meanwhile, on Wednesday, Judge Mariana Anani issued a ruling freezing the assets of Fransabank on the back of a lawsuit filed by a depositor, and on Friday Judge Bassem Nasr issued a ruling to freeze the assets of the branches of Blom Bank in Tripoli.
• In response to the rising legal pressure on the banking sector, the Association of Banks in Lebanon announced on Friday that banks will close on Monday and Tuesday next week in a “warning strike.”
• Since October 2019, when the depth of Lebanon’s financial crisis became apparent, the vast majority of commercial bank account holders in the country have been subject to informal capital controls that have severely restricted their access to their deposits. Parliament has yet to approve a long-awaited capital control law.
• The NNA also reported Mikati saying that the exclusion of the Higher Judicial Council head Suhail Abboud, Court of Cassation Public Prosecutor Ghassan Oueidat, and Judicial Inspection Board head Burkan Saad from Saturday’s session was agreed on in a call with Justice Minister Henri Khoury, who would be tasked with following up on the cases against the banks. Also absent from the session were Public Works Minister Ali Hamieh, Social Affairs Minister Hector Hajjar and Energy Minister Walid Fayad.
• Commenting on the judicial figures’ absence, Mikati said that “nothing prevents the council of ministers from calling [them]. Our decision to have them come was to examine any shortcomings in the judiciary, however the justice minister preferred that today’s session be reserved to those present.”
• While the cabinet session proceeded, political figures reacted to the latest judicial developments. Lebanese Forces leader Samir Geagea denounced in a statement on Saturday, the fact that “judicial measures are continuing in a discretionary manner.” Geagea also expressed fears that “the purpose of these measures is the closure of banks, which would prevent the holding of the parliamentary elections on the scheduled dates, as candidates will not be able to open accounts in the context of the election campaign.”
• Geagea also said he feels what is happening now could “destroy the banking sector instead of reforming it.” According to the leader, who until his party’s resignation from Parliament in the wake of the Oct. 17,2019 popular protest movement formed part of the March 14 political establishment, the responsibility for the financial crisis “lies primarily with the political class ... then BDL [Banque du Liban] and finally some bosses and bank officials.
• Gebran Bassil, President Michel Aoun's son-in-law and leader of the Aoun-founded Free Patriotic Movement, deplored in a tweet that “the political system protects the financial system by using the government to obstruct the judiciary.”