BEIRUT: Lebanon’s acting central bank governor said on Thursday that his institution was still striving to prevent being placed on a “grey list” of countries under special scrutiny by a financial crime watchdog.
Being added to the Financial Action Task Force’s grey list would be another major blow to a country in financial tailspin since 2019, with depositors still locked out of most of their pre-crisis savings and many foreign corresponding banks shunning Lebanon’s financial system.
Reuters first reported in May 2023 that Lebanon had received a preliminary evaluation warranting grey-listing, with gaps in several categories including its anti-money laundering measures, transparency on beneficial ownership of firms and legal assistance in asset freezing and confiscation.
After the initial assessment, Lebanon was granted a year to address those gaps before a final ruling that is set to be announced at the FATF’s plenary in October of this year.
“The Financial Action Task Force (FATF) will issue a decision this coming fall and we are still working hard to prevent Lebanon from being placed on the grey list,” acting central bank governor Wissam Mansouri said, addressing a meeting of the Union of Arab Banks in Beirut.
Mansouri said Lebanon had received low scores on measures to confiscate illicit wealth or address money laundering, and that the country needed to develop an action plan to address the remaining gaps.
In 2023, a diplomatic source and a financial source familiar with the matter said that the central bank’s special investigations commission was lobbying FATF member states in a bid to change the score.
Being put on the FATF grey list could disrupt a country’s capital flows, according to the International Monetary Fund, with banks cutting ties to customers in high-risk countries to reduce compliance costs.
Such a listing also risks reputational damage, credit ratings adjustments, trouble obtaining global finance and higher transaction costs.
In Lebanon’s case, the listing would represent an indictment of the financial system at a painful time. The country has been slow to make progress on key reforms requested by the IMF in April 2022 as prerequisites for a deal with the fund. The economy has slowed further after more than 10 months of hostilities between armed group Hezbollah and the Israeli military in parallel with the Gaza war.
Lebanon central bank governor says ‘working hard’ to prevent grey-listing
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Lebanon central bank governor says ‘working hard’ to prevent grey-listing
- Being added to the Financial Action Task Force’s grey list would be another major blow to a country in financial tailspin since 2019
Libya’s Ramadan celebrations tempered by economic woes
- Libya’s other economic problems included the absence of a unified national budget, in light of its political divide, as well as uncoordinated public spending due to parallel state institutions, Tetteh said
- Refills of gas cylinders, officially priced at 1.5 dinars ($0.24) but often unavailable through state-run distributors, now sell for 75 dinars ($11.85) on the black market and at times more
TRIPOLI: Libyans have been enjoying Ramadan with feasts and fireworks — but soaring prices, a devalued currency and political divisions have left many with little to celebrate.
Fifteen years on from the fall of longtime leader Muammar Qaddafi, the country remains split between east and west, while shortages of goods, including fuel, disrupt daily life, despite Libya sitting atop vast oil and gas reserves.
During the Muslim holy month of Ramadan, shoppers stock up on treats, as families gather for lavish meals before and after the daytime fast that stretches from sunrise to sunset.
But this year supermarkets have been rationing their goods, while many petrol stations are short of gas. In the capital Tripoli, most ATMs were out of cash this week.
Firas Zreeg, 37, told AFP while weaving through a crowded supermarket that the economy was deteriorating, blaming currency speculators for the fall in the dinar, “which has negative repercussions on our daily lives.”
The price of cooking oil has doubled in recent weeks, while meat and poultry prices rose by half.
Refills of gas cylinders, officially priced at 1.5 dinars ($0.24) but often unavailable through state-run distributors, now sell for 75 dinars ($11.85) on the black market and at times more.
- ‘Burden on citizens’ -
Libya has struggled to recover from the chaos that erupted following the 2011 Arab Spring uprising that toppled Qaddafi.
It remains divided between a UN-recognized government based in Tripoli and an eastern administration backed by military strongman Khalifa Haftar.
The country has largely been stable in recent years although there have been bouts of deadly violence, including the killing of Qaddafi’s son and heir apparent Seif Al-Islam this month.
With security holding, many Libyans are more focused on their livelihoods.
Last month, the central bank in the western territory devalued the dinar — the second time in less than a year — by nearly 15 percent, “aimed at preserving financial and monetary stability and ensuring the sustainability of public resources.”
In an address this week, Prime Minister Abdulhamid Dbeibah acknowledged that the devaluation had once again “put the burden on citizens.”
Hanna Tetteh, head of the United Nations Support Mission in Libya, warned on Wednesday that “poverty and pressure on society [are] increasing.”
“The situation, in addition to the fragile security landscape, should be a matter for concern as such conditions can lead to unexpected political and security challenges,” she told the UN Security Council.
Libya’s other economic problems included the absence of a unified national budget, in light of its political divide, as well as uncoordinated public spending due to parallel state institutions, Tetteh said.
Revenues from the oil industry were also declining, she added, while the central bank has said public spending is growing at an unsustainable pace.
On Tuesday, Libya marked 15 years since the start of the uprising that eventually toppled Qaddafi, with fireworks lighting up the sky in Tripoli, but for many Libyans life remains a struggle.
“Minor improvements in security were made over the past three years,” Zreeg told AFP, but Libyans are still faced with huge economic challenges.
