Financial wake-up call: Has Lebanon officially been placed on the gray list?

The Financial Action Task Force (FATF), a global financial watchdog, classifies countries into three lists: white, gray, and black.

The white list refers to countries that are actively combating money laundering.

The gray list indicates countries deemed ineffective and requiring international institutions' supervision.

On the other hand, the black list includes well-known countries that do not cooperate, such as Iran, North Korea, Myanmar, and those isolated from the global financial system.

So, has Lebanon fallen into the gray list?

According to sources following the FATF meeting in Bahrain, Lebanon will be given a one-year grace period to improve its situation and avoid being officially placed on this list.

There are two essential points that Lebanon needs to work on, according to the sources:

Firstly, implementing measures to regulate the cash economy, such as tightening controls on money entering banks sources.

Secondly, expediting judicial proceedings against suspected money launderers.

These are technical aspects, but this opportunity also carries a political dimension. According to the sources, there is pressure from US authorities to prevent the collapse of the Lebanese banking sector and maintain the relationship between Lebanon and US correspondent banks, which facilitate dollar transfers and imports to and from Lebanon. This means monitoring the amount and movement of dollars.

While Lebanon may have avoided being placed on the gray list, it is a new opportunity among many required reforms, with transparency being the most important.