Banque du Liban responds to political pressure by adhering to banking secrecy

The Banque du Liban, the central bank of Lebanon, is seen as protests against the government continue in Beirut, Lebanon. (Reuters/File)
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Updated 04 November 2020
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Banque du Liban responds to political pressure by adhering to banking secrecy

  • Lebanon intends to freeze contract with Alvarez & Marsal until new government is formed

BEIRUT: Banque du Liban Governor Riad Salameh is using banking and professional secrecy laws to avoid delivering documents to consultancy firm Alvarez and Marsal for its audit of the bank’s accounts.

Alvarez and Marsal Managing Director James Daniell met with the Lebanese Minister of Finance Ghazi Wazni on Wednesday to discuss the contract signed by the firm and the government to carry out the process, and will meet President Michel Aoun on Thursday.

Aoun and the country’s caretaker government, headed by Hassan Diab, are waging a political battle against Salameh to recover seized money, blaming the economic collapse of the country on financial engineering pursued by the governor.

Minister of Justice Marie Claude Najm has issued a circular requiring Salameh to provide Alvarez & Marsal with the necessary information and documents to conduct a financial audit, based on “the fact that the banking secrecy stipulated in Lebanese law does not apply to state accounts and the accounts of the Banque du Liban, especially since these funds are non-confidential under the law on the right to access information.”

The bank announced on Wednesday in a statement that it had “handed over all its accounts to the minister of finance” according to due process.

“Concerning state accounts, the Lebanese state can request a detailed statement of its entire accounts and subsequently hand it over to the parties it deems appropriate to inform them, which makes the Banque du Liban avoid the violation of the legally binding secrecy laws, and whose violation will entail penal consequences,” it added.

The bank said it regretted “the leakage of information and data provided to Alvarez and Marsal on social media, which violates the law and the provisions of the contract signed with the company.”

Alvarez and Marsal had informed Lebanese officials that “the documents it received from the Banque du Liban (were) so far insufficient to continue their criminal audit duties.”

But Deputy Speaker Elie Ferzli has refused to lift banking secrecy over the case, saying it would “harm the country’s economic interests.”

In a statement in Parliament, Ferzli said: “We lift banking secrecy when it comes to money laundering and terrorism, not because of indiscriminate accusations.

“What is the purpose of systematically destroying what little confidence remains in the international community in Lebanon, due to banking secrecy, to satisfy this person or that? If banking secrecy is lifted in the future, can you tell me: Where do we get what we live on? From apples and grapes? Think about Lebanon’s best interests.”

The Free Patriotic Movement (FPM), led by Gebran Bassil, organized a symbolic car rally on Wednesday in Baabda to demand the criminal audit go ahead.

Dr. Jassim Ajaka, an economist, told Arab News: “The Banque du Liban, according to the law, does not have the right to disclose any information. The contract signed between Lebanon and the auditing company (Alvarez and Marsal) provides for auditing only the accounts of the bank, and does not include ministries or any other official institutions.

“Therefore, what is required is not to pressure the bank’s governance to reveal its information, but to go to Parliament to propose a law to amend banking secrecy, or to refer any request to audit anyone’s accounts to the judiciary or the Audit Bureau, two bodies entitled to lift banking secrecy.”

Ajaka added: “What is required is to start with the accounts of the ministries of energy and communications, for example, as the Banque du Liban is the bank of these ministries.”

Former Justice Minister Ibrahim Najjar said: “The government’s decision to sign a contract with Alvarez and Marsal for criminal auditing goes beyond the role of the Audit Bureau, which has the task of auditing public accounts. Moreover, there is no authority of the Council of Ministers over the bank, which enjoys complete independence like that enjoyed by central banks in most countries of the world, especially since the accounts of the bank are subject to the Monetary and Credit Law, specifically Article 15 on Banking Secrecy Law in Lebanon.”

A source close to Wazni told Arab News that the ideal scenario would be to pause the contract. “The current caretaker government cannot hold a Cabinet session or decide on any action against the Banque du Liban,” the source said. “This means that the suspension will be for a month or two, provided that Lebanon does not pay the cost of this suspension to the company. The source added that canceling the contract before its implementation would require the government to pay Alvarez and Marsal $150,000.


Egypt’s El-Sisi urges accelerated aid into Gaza Strip

Updated 4 sec ago
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Egypt’s El-Sisi urges accelerated aid into Gaza Strip

El-Sisi said the deal came after “strenuous efforts over more than a year of Egyptian, Qatari and US mediation“

CAIRO: Egyptian President Abdel Fattah El-Sisi pointed on Wednesday to the “importance of accelerating the entry of urgent humanitarian aid” into Gaza as he welcomed a ceasefire agreement between Israel and Hamas.
El-Sisi, whose country neighbors Gaza and whose government helped negotiate the truce, said the deal came after “strenuous efforts over more than a year of Egyptian, Qatari and US mediation.”

Syrians work to avoid return to dictatorship

Updated 38 sec ago
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Syrians work to avoid return to dictatorship

  • Exiled activists have returned home and Damascus public spaces are abuzz with previously banned meetings

DAMASCUS: In a Damascus courtyard, Syrian activists brainstormed strategies to ensure their country does not return to authoritarianism, in a scene unimaginable under president Bashar Assad’s rule.

Since opposition fighters ousted the longtime ruler last month, the Syrian capital’s public spaces have been abuzz with previously banned civil society meetings.

Exiled activists have returned to the country for the first time in years, often leading to moving reunions with friends who stayed behind throughout the civil war.

Now, with Assad out, the activists who spearheaded the revolt want to ensure their voices count.

In the arched courtyard of a traditional Damascus home, Syrian activist Sawsan Abou Zainedin recounted meeting the country’s new leader Ahmad Al-Sharaa earlier this month.

“We stressed the essential role that civil society needs to play in the political transition,” said the director of a coalition of dozens of nongovernmental groups called Madaniya.

And “we insisted on the need to not only name people from the same camp” to form the interim authorities, she added of the Jan. 4 meeting.

Al-Sharaa, who leads a group called Hayat Tahrir Al-Sham, has named people close to him to key ministerial posts.

His armed group severed all ties with Al-Qaeda years ago, and his authorities have sought to reassure Syrians and the international community that they will respect the rights of minorities.

The new Damascus authorities have suspended the Assad-era constitution and the parliament.

Al-Sharaa last month said it could take four years before elections could be held, and up to three years to rewrite the constitution.

He said HTS would be disbanded at a so-called national dialogue conference to bring together Syrians of all political stripes.

His Foreign Minister, Asaad Al-Shaibani, said last week a committee is to be set up to prepare the meeting, for which no date has been announced.

Abou Zainedin said she and Asfari had requested “absolute transparency” in the preparation of that conference.

The Damascus authorities have appointed new officials to head other bodies too.

Lawyer Abdulhay Sayed said the conference would be “crucial” as long as representatives of civil society and unions were invited. Their inclusion would allow for “checks and balances” to prevent a return to authoritarianism, Sayed said.

The lawyer is among more than 300 people to have called for free and fair elections at his profession’s bar association after the new authorities replaced an Assad loyalist with a man of their choice.

“We’re in a constitutional void, in a transition period after 62 years of the Baath party’s rule,” Sayed said.

The national dialogue “conference has to establish a roadmap for an electoral law toward electing a constituent assembly in a year,” he added. “This assembly will be tasked with drawing up a permanent constitution and later could become a parliament.”

Syrian feminists also insisted on participating in all discussions toward building the country at a gathering earlier this month.

They are concerned that HTS’s ideology will exclude women from politics and public life.

Lawyer Joumana Seif said women had “a great role to play” in the new Syria and wanted to “actively” take part in the national conference. “We dream of rule of law,” said the rights advocate, whose father parliamentarian Riad Seif was jailed under Assad’s rule.

Wajdan Nassif, a writer and activist, spoke to fellow feminists after returning from exile.

“We don’t want a new oppressor ... We don’t want to see any more prisons,” she said.

“Syrian women need to take part (in discussions) in their own right ... We don’t want a repeat of the past.”


The journalists behind Sarkozy’s Libya corruption woes

Updated 11 min 39 sec ago
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The journalists behind Sarkozy’s Libya corruption woes

  • Sarkozy, a conservative with two convictions in other cases, has always maintained he is innocent and points to his key role in ousting Qaddafi

PARIS: Every day at the Paris court trying ex-president Nicolas Sarkozy over alleged corruption with Libyan dictator Muammar Qaddafi, the journalists who helped uncover the extraordinary allegations are following proceedings.

Fabrice Arfi and Karl Laske have spent 14 years documenting the links between Sarkozy’s entourage and the late Qaddafi, who is alleged to have funded the rightwinger’s 2007 election campaign with cash and offshore bank accounts.

The pair from the Mediapart news outlet have traveled the world for secret meetings with sources, tracked money to a host of tax havens, and been sued five times over their reporting — always unsuccessfully.

What is arguably the most shocking corruption trial in modern French history is the pinnacle of their work, sparking pride but also pressure for a duo with a track record in uncovering financial crime. “When you see a former president and three former ministers sat together on four folding chairs, with the justice system asserting ‘you were corrupted by a dictator,’ you know you are a witness to a historic event,” Arfi said in an interview.

“I don’t know what the outcome will be — it’s not down to me to say if they will be found guilty or not — but it shows that our work was not for nothing.”

Pushed on whether he thought the trial would have taken place without his and Laske’s relentless digging, he awkwardly conceded that “they played a role.”

“With all due modesty, without our investigation, prosecutors might not have opened their case,” added Arfi, the 43-year-old son of a police officer whose regular scoops have helped turn Mediapart into a profitable independent news site.

The Libya investigation began in 2011 when an individual contacted the newsroom, offering confidential information.

Arfi and Laske traveled abroad — Arfi withholds all of the details to protect the source — and received a computer hard drive said to belong to an infamous Franco Lebanese arms dealer called Ziad Takieddine.

When they returned to their hotel, they realized they had been given a potential goldmine — “Ali Baba’s cave,” Arfi says — containing Takieddine’s personal diary, emails, bank transfers and even photographs.

While French investigators were already looking at Takieddine’s role as a middleman in French arms deals in the 1990s, Arfi and Laske began verifying and confirming his more recent dealings with Qaddafi.

“We didn’t understand everything to start with. There are bits that are like pieces of the puzzle that only make sense once you have found the others,” he explained.

The first articles on Takieddine’s ties to Sarkozy allies made a few waves but the allegations would become more serious as Arfi and Laske dug deeper.

In 2012, during the presidential election campaign in which Sarkozy was seeking a second term, they published a document that caused a political earthquake — and a lot of professional soul-searching.

“We published in the middle of an election campaign, which is a difficult time for a news outlet,” Arfi explained. “But withholding it would have been worse.”

The document, handed over by a source with access to Libyan archives after the 2011 fall of Qaddafi, purported to show an offer of $50 million from the dictator to fund Sarkozy’s campaign, signed and stamped by Libyan intelligence chief Moussa Koussa. Sarkozy lost the election and sued, alleging the document was fake.

It, along with other evidence unearthed by Mediapart, will be presented during the trial which is scheduled to last until April 10.

Takieddine’s hard drive was also handed over to police by Arfi’s source.

Sarkozy, 69, alleges that he is the victim of a conspiracy between politically biased judges, police and left-leaning Mediapart.

In his first comments in court last week, Sarkozy called Arfi and Karl Laske “thugs” and angrily told judges that “you will never ever find a single euro, a single Libyan cent in my campaign.”

Arfi claims Sarkozy has been successful in deflecting public attention, using the same playbook as other right-wing populists.


Talks underway to open Egypt-Gaza border crossing for aid: Egypt state media

Updated 36 min 11 sec ago
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Talks underway to open Egypt-Gaza border crossing for aid: Egypt state media

CAIRO: Egyptian state media reported Wednesday that coordination was underway to “open the Palestinian Rafah crossing to allow the entry of international aid” into Gaza, citing an Egyptian security source.
Egypt was “preparing to bring in the largest possible amount of aid to the Gaza Strip,” following news of a ceasefire deal reached between Israel and Hamas, state-owned newspaper Al-Ahram said.
It cited a report from Al-Qahera News, which is closely linked to state intelligence.
Mediators said Israel and Hamas agreed Wednesday to a ceasefire and a deal to release hostages held in Gaza, but Israel cautioned that the final sticking points needed to be ironed out.
Pressure to put an end to the fighting had ratcheted up in recent days, as mediators Qatar, Egypt and the United States intensified efforts to cement an agreement.
The Rafah border crossing has been closed since May, when the Israeli military seized the area and closed the Palestinian side of the crossing.
Egypt has repeatedly said it will only recognize Palestinian authority over the crossing.
Al-Qahera News on Wednesday said the framework agreement comprised of three interconnected phases.
The first would last 42 days and involve a temporary halt to military operations on both sides.
It would also require the withdrawal of Israeli forces away from population centers and toward Gaza’s borders, as well as the temporary cessation of flyovers by Israeli warplanes and reconnaissance aircraft for 10 hours each day.


International reaction to Gaza ceasefire deal

Palestinians react to news on a ceasefire deal with Israel, in Deir Al-Balah in the central Gaza Strip on Wednesday. (Reuters)
Updated 15 January 2025
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International reaction to Gaza ceasefire deal

Israel and Hamas agreed to a ceasefire deal on Wednesday, mediators said, pausing a devastating 15-month war in Gaza and raising the possibility of winding down an Israeli military operation that has killed more than 46,000 Palestinians.
The deal, coming after weeks of painstaking negotiations in the Doha, promises the release in phases of dozens of hostages held by Hamas since it led an attack on Israel in October 2023 that killed at least 1,200 people.
International response to the deal, which is yet to be confirmed by Israel, overwhelmingly welcomed the agreement.
US President Elect Donald Trump welcomed the deal ahead of US official comment and focussed his comments on the Israeli hostages.
"We have a deal for the hostages in the Middle East. They will be released shortly. Thank you!" he said in a post on his Truth Social platform.
Turkish Foreign Minister Hakan Fidan told reporters in Ankara that the ceasefire deal was an important step for regional stability. Fidan also said Turkish efforts for a two-state solution to the Israeli-Palestinian conflict would continue.

More to follow ...

*With AP and Reuters