BDL's warnings: Lebanon's jewelry sector faces scrutiny amid money laundering concerns

Report by Bassam Abou Zeid, English adaptation by Yasmine Jaroudi 

Amid concerns over money laundering and terrorist financing, Lebanon's jewelry sector has come under scrutiny as it operates within the cash economy system.

The Banque du Liban (BDL) has raised alarms about the matter, particularly in ongoing discussions with American officials to curb such violations.

In response to these concerns, Acting BDL Governor Wassim Mansouri has initiated preparations for a meeting with jewelry merchants and shop owners, educating them about techniques to contribute to combating money laundering and terrorist financing effectively.

Cases have been recorded where individuals have presented large sums of cash in US dollars to purchase jewelry or gold, potentially involving illicit activities. These transactions often lead to the laundering of money within Lebanon or abroad.

Typically, buyers of gold bars worth $10,000 or more must declare the source of funds used in these purchases.

However, verifying the actual source of these funds remains a challenge.

Currently, merchants rely on the statements buyers provide, with the majority claiming that the funds are the proceeds of legitimate business activities.

Nevertheless, stricter enforcement may be necessary to ensure proper documentation, especially considering that many Lebanese individuals hold large sums of cash, with some unable to prove their origins.