BEIRUT: Lebanon’s parliament on Thursday granted regulatory bodies greater access to bank account information, a key reform demanded by international creditors before the crisis-hit country can unlock bail-out funds.
Prime Minister Nawaf Salam called parliament’s approval of changes to banking secrecy laws “a necessary step toward the desired financial reform that our government promised to achieve, and a fundamental pillar to any recovery plan.”
Adding that the decades-old culture of financial opacity was no longer the boon to investment it once was, Salam said the reform was fundamental to “restoring the rights of depositors and the confidence of citizens and the international community.”
Lebanon was once a booming regional financial hub dubbed the “Switzerland of the Middle East,” with strict banking secrecy laws a key attraction, but the economic crisis that began in 2019 shredded its fiscal reputation.
Since then, authorities have come under local and international pressure to amend the laws amid accusations that influential figures spirited large sums abroad while regular depositors were locked out of their life savings and the local currency’s value plummeted.
Lebanese rights group Legal Agenda said the amendments allow “banking supervisory and regulatory bodies” including the central bank “to request access to all banking information without linking the request to a specific objective.”
These bodies will now be able to audit customer accounts by name, access deposit details and look into possible suspicious activity, the group said.
The changes are among several major reforms Lebanon needs to make to unlock billions of dollars in aid to restart the economy after the collapse, which was widely blamed on mismanagement and corruption.
Finance Minister Yassine Jaber told local broadcaster LBC that the amendments “opened greater space” for Lebanon’s central bank to access accounts.
But “we should not think that with this law, anyone can enter a bank and demand account details” for whoever they like, added Jaber, who is in Washington with other senior officials for meetings with the IMF and the World Bank.
Alain Aoun, a member of parliament’s finance committee, said the move followed 2022 banking secrecy amendments that the IMF had viewed as “insufficient.”
Now, regulatory bodies will be able to request “the information they want” on bank accounts, he said.
The cabinet, which approved the amendment earlier this month, said it would apply retroactively for 10 years from the date of request, meaning it would cover the start of the economic crisis.
