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BANKING SECRECY

Budget and Finance Committee approves law on restricted lifting of banking secrecy

Budget and Finance Committee approves law on restricted lifting of banking secrecy

The Chairman of the parliamentary Finance and Budget Committee, MP Ibrahim Kanaan. (Credit: NNA)

BEIRUT — Parliament’s Finance and Budget Committee on Monday approved a draft law that would allow the lifting of banking secrecy from some accounts by the judiciary, the National Commission for the Fight against Corruption, the Special Investigation Commission, the National Deposits Guarantee Institution, as well as the tax authorities. The draft law will next be sent to Parliament, where it will be discussed and eventually voted on.

Here’s what we know:

    • Asked last week about whether giving the authority to lift banking secrecy to the judiciary is a good thing since an independent judiciary law has not yet been approved, Finance and Budget Committee head Ibrahim Kanaan (FPM/Metn) told L’Orient Today that “the judiciary already has this authority but in addition to the judiciary we have given it to the National Committee for fighting corruption, the Special Investigation Commission, the taxation authority, etc., so you have many parties that can lift banking secrecy.” He added, “Besides we can’t just decide that there is no judiciary in Lebanon, all the sectors have their gaps. I agree that the independent judiciary law should be approved but the independence of the judiciary is also [about] an application [of the law].”

    • Lifting banking secrecy is a key demand of the International Monetary Fund in its preliminary agreement with the Lebanese government. The agreement states that it is important to bring the law “in line with international standards to fight corruption and remove impediments to effective banking sector restructuring and supervision, tax administration, as well as detection and investigation of financial crimes, and asset recovery.”

   • Proposed amendments to the banking secrecy law were approved by the government on April 14 and the bill was sent to the parliamentary committees for review, before final being voted on in the Finance and Budget Committee on Monday. The law will now proceed to Parliament, where MPs will discuss it and eventually vote on it.

   • On Thursday, following the Finance and Budget Committee meeting on Thursday, MP Ibrahim Mneimneh (Change/Beirut II) told L’Orient Today that though the law should be “followed up” with other reforms, “it is a positive move.” He explained, “We are breaking a taboo of lifting banking secrecy, which is a first step, but it also should be followed up by other reforms like an independent judiciary law.”

   • For his part MP Fouad Makhzoumi (Independent/Beirut II) told L’Orient Today that banking secrecy should be “fully lifted,” adding, “The IMF and the international community are demanding it from us … After 9/11 all the countries in the world lifted banking secrecy so why would you put yourself in a suspicious position especially in the presence of armed parties.” Makhzoumi is a fierce rival of Hezbollah and strongly opposes the party’s possession of heavy weaponry outside of government control. “BDL is demanding that the banking secrecy law should be amended and not lifted fully, while some of the MPs who are affiliated with the banks are saying let us amend the law. For me, [I ask] why would I amend [the banking secrecy law] if the international community is asking otherwise.”

    • Asked if the IMF would approve the proposed banking secrecy law in its current form, caretaker Deputy Prime Minister Saade Chami, who is a former IMF employee, said “yes I think they would.”


BEIRUT — Parliament’s Finance and Budget Committee on Monday approved a draft law that would allow the lifting of banking secrecy from some accounts by the judiciary, the National Commission for the Fight against Corruption, the Special Investigation Commission, the National Deposits Guarantee Institution, as well as the tax authorities. The draft law will next be sent to Parliament, where...