Laws under scrutiny: Sovereign wealth fund and capital controls in focus at legislative session

News Bulletin Reports
2023-08-11 | 10:05
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Laws under scrutiny: Sovereign wealth fund and capital controls in focus at legislative session
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4min
Laws under scrutiny: Sovereign wealth fund and capital controls in focus at legislative session

As part of the legislative agenda for the forthcoming session scheduled on Thursday, five critical laws and legislative proposals are set to be discussed, with two being the most important.

The first pertains to establishing a sovereign wealth fund, while the second involves capital controls.

However, the second has undergone multiple rounds of review, having been previously debated in the general assembly before being referred back to committees for revisions.

Notably, the former central bank governor, Riad Salameh, had objected to specific provisions, a sentiment shared by the Association of Banks through close deputies.

Will these proposals gain approval in the upcoming session?

The sovereign wealth fund, designed for the management and investment of petroleum resources, has been meticulously studied and is slated to operate as a public institution with a distinctive nature. It is intended to operate independently of public sector entities' management rules. This differentiation is attributed to its role in managing state-owned petroleum resources belonging to the Lebanese state, as it has a legal figure and financial and administrative autonomy.

The legislative session requires a quorum of one-half plus one, totaling sixty-five MPs. The crucial factor lies in the participation of the Strong Lebanon bloc.

It is known that the Strong Lebanon bloc insists that its participation in legislative sessions is related to the adoption of reform laws, so does it consider the proposed laws reformist, especially since it praised the completion of the Sovereign Fund Law proposal in the Finance Committee.

A Strong Lebanon bloc MP reported to LBCI that they have not reached a final decision, but the matter remains open. He continued, "It is more likely that we are going to participate in light of the importance of the two issues raised, and if we participate at that time, the quorum will be secured, and we agree with the approval of these two items due to their importance."

The Democratic Gathering, supportive of legislating necessity-driven laws, will participate in the session and vote on these critical proposals, which have undergone thorough scrutiny.

Secretary-General of the Democratic Gathering, MP Hadi Aboul Hosn, asserted that it is their duty as MPs to demonstrate goodwill towards all and express their commitment to reform and its regulatory frameworks.

The remaining parliamentary blocs, including Development and Liberation, Loyalty to the Resistance, National Moderation, New Lebanon, National Accord, and Independent National Bloc, are expected to vote on the sovereign wealth fund proposal following a comprehensive examination.

While most of these blocs support the principle of enacting capital controls, some await the outcome of discussions during the session.

In conclusion, approving the sovereign wealth fund legislation seems plausible should the quorum be secured. As for capital controls, the matter remains uncertain.

Will the pressures of the deputy governors succeed in its passage, or will it undergo further revisions upon objection?

Notably, LBCI has learned that Wassim Mansouri, the acting central bank governor, will be invited to the session to present the objections raised by deputy governors to the proposed formulations.

If approved, the legislation will proceed; otherwise, it will be referred back to the relevant committees for further deliberations.
 
 

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