BDL Acting Governor Wassim Mansouri at one of his first press conferences in office, Aug. 25, 2023. (Credit: Mohammad Yassine)
Banque du Liban (BDL)'s acting governor, Wassim Manssouri, left Beirut at the end of the week for Washington, where he is due to hold talks with a number of financial officials in an attempt to obtain a new reprieve for Lebanon, which risks finding itself once again on the Financial Action Task Force (FATF) watchlist next autumn.
L'Orient-Le Jour received this information from a senior BDL source, who said that "meetings with the US Treasury will be crucial." Between now and his return on July 15, the acting governor is also due to meet officials from the International Monetary Fund (IMF) and the World Bank.
The Lebanese daily al-Akhbar points out that this is not Manssouri's first trip to the United States to plead the cause of the Lebanese financial system. It also mentions meetings with "relevant players in the U.S. Congress" and "private meetings."
The FATF, the international financial crime watchdog, has been considering putting Lebanon back on the "grey list" for over a year, following an initial assessment in 2023, which deemed the country's efforts in the fight against money laundering and terrorist financing insufficient.
In June 2023, Lebanon was granted a one-year extension to bring its efforts up to speed. But according to an interim report from the FATF's regional office for the Middle East and North Africa zone dated March, which L'Orient-Le Jour saw, the loopholes identified have not been sufficiently closed, and a downgrading to the grey list is more than likely by the time of the next FATF plenary meeting in October.
When it last visited the country in May, the IMF delegation in charge of monitoring the progress of reforms prior to the conclusion of a financial assistance program to which the Lebanese authorities committed themselves in April 2022 emphasized, in its conclusions, that the development of the cash economy in the absence of a functional banking system — a consequence of the financial crisis that erupted in 2019 — posed serious problems in terms of "regulation and supervision."
However, if Lebanon is put back on the grey list, this means that banking compliance procedures between Lebanese banks and their correspondents abroad will become more cumbersome. The BDL source assured L'Orient-Le Jour that, even in a worst-case scenario, the changes will be minimal, given that correspondent banks have already tightened their procedures since June 2023, due to the risk of downgrading that has been hanging over Lebanon for the past year. At this stage, however, nothing is set in stone.
The acting governor, who replaced Riad Salameh at the end of July 2023, is trying, for his part, to offer pledges of goodwill. "Despite the shortcomings, there are also positive echoes about the work that is being done by BDL to improve things," assures the BDL source. However, this optimism is not unanimously shared. Last May, François Sporrer, head of the economic department at the French Embassy in Lebanon, judged it highly unlikely that Lebanon would escape downgrading again.
Lebanon has had fairly comprehensive legislation since 2001, which led to its removal from the "grey list" in 2016, after spending several years there.
This article was originally published in French in L'Orient-Le Jour.
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