Curbing money laundering: Exploring BDL's circular 165

News Bulletin Reports
2023-05-26 | 09:54
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Curbing money laundering: Exploring BDL's circular 165
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2min
Curbing money laundering: Exploring BDL's circular 165

When an American delegation visited Lebanon during Michel Aoun's term, their main concern was to curb the cash economy in Lebanon. This refers to all transactions conducted in fresh dollars outside the banking system, essentially without any control over the dollar, which means an increase in money laundering operations.

Since then, instead of shrinking, the cash economy has grown larger.

Based on this reality and with the support of international financial organizations and the US Treasury Department, Lebanon's Central Bank, Banque du Liban (BDL), issued circular 165, which allows banks to deal with fresh dollar checks and fresh dollar bank cards starting from June 1.

This circular does not require banks to deposit their entire fresh dollar reserves with BDL, which currently amounts to around $2 billion. Instead, it obliges them to deposit amounts that cover the checks they issue in fresh dollars or Lebanese lira, as well as the bank cards that also rely on fresh dollars of the same value.

Furthermore, this circular will also be sufficient for companies or individuals who wish to conduct money transfers in fresh dollars through correspondent banks, thus further curbing money laundering operations.

While banking sources denied that the purpose of the circular is to eliminate old deposits, they pointed out that the fate of these deposits is tied to pending legislation in parliament, ranging from a recovery plan to capital controls to bank restructuring.

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