Deputy Prime Minister Saade Chami speaks following Wednesday's cabinet session. (Credit: Kabalan Farah/L'Orient Today)
BEIRUT — Cabinet on Wednesday approved, with modifications, a draft capital control law aimed at legalizing and standardizing banking restrictions put in place at the onset of Lebanon’s financial crisis in 2019.
Here’s what we know:
• Among the modifications to the draft, the cabinet changed the composition of the capital control committee, which is charged with implementing the capital control law. The government removed Prime Minister Mikati and the Economy Minister Amin Salam from the committee and replaced them with two economic experts chosen by Mikati, along with one judge. Deputy Prime Minister Saade Chami announced following the session. Finance Minister Youssef Khalil will chair the committee, and Banque du Liban Governor Riad Salameh remains as part of it. Chami also said that the committee will serve for no longer than two years. The committee’s term was previously set at three years.
• The draft capital control law will now be sent to Parliament, where it is likely to be subject to discussion at committee level before being voted on in the legislature.
• A joint parliamentary committee on Monday rejected the previous version of the capital control draft law for “defects” in form and content. The latest version of the proposed law was criticized because it granted the central bank more power, gave a blank check to the banking industry on any local or international lawsuits related to money transfers and differentiated between “fresh dollars” and pre-April 2020 foreign currency accounts.
• The cabinet, which met Wednesday at Baabda Palace, also approved a request from the Energy Minister Walid Fayad to transfer an amount of $76 million to ensure the safety of investments in the production and labor sectors.
An agreement to give loans to the Lebanese government from Banque du Liban was also approved according to a mechanism that calls for submitting every file the government makes and obtaining the central bank’s approval on a case-by-case basis.