Circular Wallpapers 170 and setting the limits of powers

The Bank of Lebanon issued a statement in which it clarified the motives for issuing the basic circular No. 170, stressing that the fundamental goal of it is to prevent any money directly or indirectly entering the source of Lebanese bodies or organizations subject to international sanctions, especially the US sanctions issued by the Office of Foreign Asset Control (OFAC).
The bank indicated that allowing these funds to flow would expose Lebanese banks to severe dangers, most notably the loss of their relations with correspondent banks abroad, especially American banks that are the main channel of dollar transfers. Accordingly, he stressed that the circular comes within the framework of protecting the formal Lebanese banking sector, and ensuring the continuity of its ability to deal with the global financial system. With regard to organizations or bodies subject to international sanctions and unlicensed by the Bank of Lebanon, the statement indicated that the powers of the central bank in this field are limited, and that full responsibility lies with the state and the relevant ministries that have the laws in force to intervene. He emphasized that the loading of the Bank of Lebanon is powers that the criticism and credit law does not give to it, “an illegal chain of transmission.” In this context, the Minister of Finance Yassin Jaber had stated in the media that “the central bank is trying to address the issue of the good loan institution.” The issue of unlicensed financial societies from the Bank of Lebanon, foremost of which is the “good loan” association, stands out as one of the most prominent legal and supervisory gaps in the Lebanese system. These associations, which work under “charitable” or “social” headlines, are not subject to the control of the Bank of Lebanon, but rather to the Ministry of Interior, which is granted by legal licenses. According to the assets, it is necessary that these associations provide the severing of their annual accounts and budgets to the ministry, with the aim of ensuring transparency and monitoring the sources of funds and their spending. This opens the way for the use of some of these associations as financial channels parallel to the legal banking system. In this context, economic experts believe that the role of the Bank of Lebanon remains assistant and complementary, as it can inform the Ministry of Interior of any unlicensed financial activity that is clearly or suspected of it, so that the last takes the necessary measures according to its powers. However, the legal texts in force does not obligate the central bank to the initiative, but rather places the direct legal responsibility on the Ministry of Interior, which can move on its own without the need for a complaint or a prior referral. Beginning with that, the statement of the Bank of Lebanon carried a number of messages to the Lebanese interior, by asserting that the central bank will not be a cover for any attempt to enter funds contrary to the penalties, in an indirect signal to some of the accused parties To circumvent the international financial system. It also carried a reference to the international community, by asserting that the financial and banking system in Lebanon has become an excellent observer with a complete commitment to the laws and regulations that relate to combating money laundering and terrorist financing in order to work to lift Lebanon from the gray list of countries that are not cooperating in the fields of combating terrorist financing and money laundering. And to the outside, especially to Washington, by showing a clear commitment to international and American laws and regulations, with the aim of reassuring the correspondence banks and preserving the transfer channels, and to the Lebanese state, by reminding it that the final responsibility is a political -governmental responsibility that falls on the executive authorities, and is not confined to the monetary authorities. The Foreign Ministry, and at the same time, it alerts it internally that any indulgence with the banned funds may expose the country to suffocating financial isolation.