Lebanon granted one-year grace period to implement financial reforms and avoid gray listing

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2023-05-25 | 02:34
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Lebanon granted one-year grace period to implement financial reforms and avoid gray listing
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Lebanon granted one-year grace period to implement financial reforms and avoid gray listing

LBCI sources have revealed that Lebanon has been granted a crucial grace period of one year to implement essential financial, monetary, and banking reforms. 

This move comes as an effort to prevent Lebanon from being placed on the gray list as a non-cooperative state by The Financial Action Task Force.
 
The decision to grant Lebanon this grace period reflects the recognition of the challenges the country is currently facing in its efforts to address its financial and economic crisis.
 
The gray list, formally known as "Jurisdictions under Increased Monitoring and High-Risk Jurisdictions subject to a Call for Action," is a list maintained by the Financial Action Task Force (FATF). It comprises countries that have deficiencies in their anti-money laundering and combating the financing of terrorism (AML/CFT) frameworks. Placement on this list signifies that a country's AML/CFT measures are not in line with international standards and can have significant repercussions for its financial system.
 
Lebanon's inclusion in the gray list would have had far-reaching consequences for its economy. It could have further damaged the country's already weakened banking system, increased the cost of international transactions, limited access to global financial networks, and deterred foreign investments. Therefore, the grace period granted to Lebanon is a vital lifeline that allows the country to implement crucial reforms and avoid the potential negative consequences associated with being on the gray list.
 
“A jurisdiction that enters the ICRG review process as a result of its mutual evaluation results has a one-year Observation Period to work with the FATF or its FATF-style regional body (FSRB) to address deficiencies before possible public identification and formal review by the FATF,” according to the organization.
 
According to exclusive information from LBCI, the Financial Action Task Force (FATF) conducted an assessment of Lebanon's financial, monetary, and regulatory situation. The assessment found positive developments in seven areas, while two issues require further attention. The positive and negative aspects have not been clarified pending an official statement from the organization.

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