Secret bancaire : l’aménagement de la loi... réaménagé par les députés

Banking secrecy: amending the law.. Deputies are rearranged

The House of Representatives convened yesterday in its entirety for the first special session since the legislative elections that took place in mid-May, and the House returned for the second time in two years to the Banking Secrecy Amendment Act in force since 1956. Its content is somewhat.

When the first amended version of this law was presented to the House of Representatives on May 28, 2020, MPs deleted the reference to “all judicial authorities in the course of an investigation” of those authorized to lift bank secrecy. For anyone in contact with public money. While studying the second edition yesterday, the development was planned to allow for the lifting of bank secrecy in a greater number of cases. Indeed, if the amended law gives three new entities the power to lift bank secrecy, this power remains in the hands of the Special Investigation Commission, and MPs have not yet repealed another competing law.

Amending this law “to align with international anti-corruption standards,” “detection of financial crimes” and enable “asset recovery,” as requested by the International Monetary Fund, is among the list of reforms demanded by the latter. Within the framework of the initial agreement with Lebanon signed last April. An agreement worth $3 billion over four years is supposed to help the country out of its economic and financial crisis.

At the end of the session, the Free Patriotic Movement’s deputy and head of the Parliamentary Finance and Budget Committee Ibrahim Kanaan found that the vote on this text sent a “positive” signal to the international community. For his part, Chairman of the Administration and Justice Committee, George Adwan, indicated that the parliamentary session was “excellent” and that it is part of the reforms.

body without motor

Although adopted in the commission, amending the law with a unicycle is like “a car with a very nice body, but without an engine and does not allow it to be oriented towards change and repairs.” In any case, in this way the tax attorney and Beirut Bar Association representative Karim Daher chose to describe this new development of the law by the deputies, who worked with these committees on the version presented yesterday in a session. It thus clarifies that Decree No. 9102, which has an emergency nature and was adopted yesterday, competes with other existing laws, and therefore does not allow the effective application of lifting bank secrecy.

Indeed, deputies have certainly voted on certain amendments to the 1956 law that allow the judicial authorities, the Lebanese Anti-Corruption Authority and the Lebanese Tax Administration to lift bank secrecy, as well as the Special Investigation Commission (CSI). The latter still has the exclusive right to request information from banks under a procedure for lifting bank secrecy through Law No. 32 of October 16, 2008. As a reminder, CSI is an independent legal entity headed by the Governor of the Banque du Liban Riad Salameh. Thus other newly designated entities in this capacity are still obligated to go through CSI to lift bank secrecy.

In a call with L’Orient-Le Jour newspaper, Ibrahim Kanaan indicated that “since Law No. 32 has been recommended by the Finance Committee and the Beirut Bar Association, it will be on the agenda of the next parliamentary session at the beginning of August.”

Another problem pointed out by tax attorneys in this law is that it no longer includes mention of “all financial crimes,” but rather is limited to corruption, money laundering, illicit enrichment, tax evasion and terrorist financing. Thus this does not make it possible to lift bank secrecy in cases of tax offenses by the private sector, such as financial engineering. Thus, Karim Daher accuses the deputies of not wanting to lift banking secrecy, for fear that this law will be retroactive and that they will suffer from its consequences.

Penalties and penalties

In detail and according to the wording of the text voted last week, bank secrecy can only be lifted by these newly listed entities within the strict framework of their powers and approved by the higher authority of each of these entities. For example, for the tax administration, this cannot be done outside the cases stipulated in the Tax Procedures Law and decided by the Director General of the Ministry of Finance, explains Karim Daher, who specifies that this guarantee was put in place to avoid cases of extortion or bypassing tax authorities.

The text also includes penalties for those who disclose information outside the cases established by law or who, on the contrary, refuse to communicate this information. In the first case, the law compares this to a violation of professional secrecy and imposes a prison sentence of between three months and a year and a fine of 300 to 500 million pounds. In the second, the holder of the refusal is likened to a facilitator or partner, according to the provisions of the Money Laundering Law, and is punished with imprisonment from 3 to 7 years, as well as a fine equal to twice the amount of the crime. The bank belonging to the director who refused to verify the authenticity of the transmission of information may also be subject to disciplinary penalties provided for in Article 208 of the Currency and Credit Code, and therefore may be written off.

The deputies also amended Law No. 44 of November 11, 2008 from the Tax Procedures Law, which obligated public administrations, public institutions and municipalities, as well as private sector bodies, to cooperate with the tax administration. with the information you request. With the new amendment made by Parliament yesterday, it is the Director General of the Ministry of Finance who will have to approve this measure or only the Director of Tax Department Receipts, the lawyer explains.

Another bill was scheduled to be presented yesterday to amend Law No. 44 issued on November 24, 2015 but was not finally discussed. This law relates to combating money laundering and terrorist financing to include the amendments requested by the Financial Action Task Force (FATF), an intergovernmental body established in 1989 to standardize anti-money laundering and terrorism standards. Finance and other threats to the integrity of the international financial system. A delegation from the Financial Action Task Force has also been present in Lebanon since last week, tasked with reviewing legislation and law enforcement in Lebanon with many organizations and individuals, including customs, police, judges, lawyers, notaries, brokers and banks. If the FATF considers that Lebanon is not in compliance with the regulations, it may decide to place it on the gray or blacklist with consequences in relation to international trade.

2022 budget

Finally, according to our correspondent Hoda Chedid, the deputies then adopted Bill No. 8952 that allows opening an additional appropriation of 10,000 billion Lebanese pounds in the 2022 draft budget. According to a press release issued by the outgoing Minister of Finance, Youssef Khalil, this amount particularly includes allocated transportation costs. For soldiers and civil servants, medical expenses or expenses allocated to the Lebanese University through the Ministry of Education. He also acknowledged the need to “review the wages by increase”, but this “depends on the adoption of the 2022 budget.”

The Mikati government had voted on the latter option last February, but it was not sent to the Finance Committee until a month later, pending its final approval. Since April, this committee has been requesting clarifications regarding this credit line amounting to 10 billion pounds and the various exchange rates used in the budget. Parliament’s adoption of this year’s budget would in no way be outside the constitutional deadlines, as this provision constitutes one of the IMF’s requirements.

The House of Representatives convened yesterday in its entirety for the first special session since the legislative elections that took place in mid-May, and the House returned for the second time in two years to the Banking Secrecy Amendment Act in force since 1956. Its content is somewhat. When the first modified version of this…

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