Banking secrecy in Lebanon... Shhh!

Published in Other

Banking secrecy is a hefty subject. Without going into all the minute details, all that you really need to

know for now is: 1) what it is, 2) how it affects you, and 3) how Lebanon applies it.

 

1) What it is.

Banking secrecy is the principle that a client’s personal and account information is held in confidence

by a bank and not released to the authorities, apart from in the case of criminal convictions such as tax

fraud. The country most famous for its banking secrecy is of course Switzerland, although nowadays

Singapore and Hong Kong are gaining notoriety as places where money can be quietly hoarded away.

Banking secrecy is seen as vital by some because of the need to protect an individual’s privacy. In

Lebanon, the law came into force on September 3, 1956 and helped to increase confidence in the

Lebanese banking system as well as establish Lebanon’s place in the Middle East as a financial hub. It

also gave rise to Lebanon’s nickname as ‘the Switzerland of the Middle East.’

 

2) How it affects you.

In practice, what banking secrecy in Lebanon means for the average Joe is that you have more privacy

than you would have opening a bank in another country where banking secrecy is not the law. But over

the past few years there have been issues with the banking secrecy law, which we’ll look at below.

 

3) How Lebanon applies the banking secrecy rules.

Many governments and NGOs look disfavourably on banking secrecy laws as they see them as an aid

to money laundering and other crimes. Lebanon tackles this issue by focusing on fostering interagency

and global cooperation in the form of the Special Investigation Commission and the Banking Control

Commission. However, in July this year, US law decreed that all financial institutions in Lebanon had to

conform to the US Foreign Account Tax Compliance Act (FATCA). This means that the banking secrecy

laws in Lebanon would be breached. To get around FATCA and to avoid this happening, US citizens are

being asked to sign a waiver and suspicious incidents are being processed on a case-by-case basis.

According to the Special Investigation Commission, in 2013, 301 cases were brought to their attention.

The banking secrecy law was lifted 17 times and 46 are still under investigation. What will happen in the

future as regulations concerning banking get more stringent is yet to be seen. But what is sure is that

Lebanon’s banking secrecy laws are not going anywhere soon.

 

For more information on banking in Lebanon, visit Bnooki.com.

17 Dec 2014
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Banking secrecy in Lebanon... Shhh!

Banking secrecy is a hefty subject. Without going into all the minute details, all that you really need to

know for now is: 1) what it is, 2) how it affects you, and 3) how Lebanon applies it.

 

1) What it is.

Banking secrecy is the principle that a client’s personal and account information is held in confidence

by a bank and not released to the authorities, apart from in the case of criminal convictions such as tax

fraud. The country most famous for its banking secrecy is of course Switzerland, although nowadays

Singapore and Hong Kong are gaining notoriety as places where money can be quietly hoarded away.

Banking secrecy is seen as vital by some because of the need to protect an individual’s privacy. In

Lebanon, the law came into force on September 3, 1956 and helped to increase confidence in the

Lebanese banking system as well as establish Lebanon’s place in the Middle East as a financial hub. It

also gave rise to Lebanon’s nickname as ‘the Switzerland of the Middle East.’

 

2) How it affects you.

In practice, what banking secrecy in Lebanon means for the average Joe is that you have more privacy

than you would have opening a bank in another country where banking secrecy is not the law. But over

the past few years there have been issues with the banking secrecy law, which we’ll look at below.

 

3) How Lebanon applies the banking secrecy rules.

Many governments and NGOs look disfavourably on banking secrecy laws as they see them as an aid

to money laundering and other crimes. Lebanon tackles this issue by focusing on fostering interagency

and global cooperation in the form of the Special Investigation Commission and the Banking Control

Commission. However, in July this year, US law decreed that all financial institutions in Lebanon had to

conform to the US Foreign Account Tax Compliance Act (FATCA). This means that the banking secrecy

laws in Lebanon would be breached. To get around FATCA and to avoid this happening, US citizens are

being asked to sign a waiver and suspicious incidents are being processed on a case-by-case basis.

According to the Special Investigation Commission, in 2013, 301 cases were brought to their attention.

The banking secrecy law was lifted 17 times and 46 are still under investigation. What will happen in the

future as regulations concerning banking get more stringent is yet to be seen. But what is sure is that

Lebanon’s banking secrecy laws are not going anywhere soon.

 

For more information on banking in Lebanon, visit Bnooki.com.

Last modified on Thursday, 15 January 2015 08:29

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