Cover-up allegations: State Council's handling of BDL violations raises questions

The Bar Association has obtained the acceptance of the State Council for the appeal it submitted to suspend the implementation of a decision issued by the Cabinet on April 18, which covers violations of circulars issued by the Banque du Liban (BDL) as a service to banks against depositors.

The decision called for "capital control" on regulated withdrawals, metered transfers, and strict restrictions.

This article is originally published in, translated from Lebanese newspaper Nidaa Al-Watan.

Nidaa Al-Watan was the first to be warned about this government decision, which exceeded the limits of authority by approving what was within the powers of the Parliament.

At the time, it stated that the Parliament Speaker, Nabih Berri, allowed the Finance Minister, Youssef Khalil, to present this decision to the Cabinet for adoption, even if it carried exceptional powers granted by Berri to the Mikati government for legislation.

However, the State Council accepted the arguments of the Bar Association, which affirmed in its appeal and suspension request that it is a "legalization and legitimization of dissolving deposits."

Among the arguments, it also stated that the Cabinet's decision is a "desperate attempt to provide a legal cover for the BDL's illegal circulars and to establish the adoption of multiple exchange rates to impose unlawful withdrawals from deposits with illicit acts. This entails a severe infringement of rights contrary to the provisions of the Constitution.

The related circulars of the BDL accelerated the pace of collapse and violated the laws of monetary, credit, obligations, and commerce." The Bar Association also emphasized that "the government's decision is invalid; it usurps power and abuses its use, as a legislative authority is exclusively vested in the Parliament. The one who came up with this decision and passed it in the Cabinet tried to cover up a serious violation by imposing a distinction between old and new deposits, an unconstitutional violation of equal rights among depositors."

The State Council also accepted the appeal submitted by lawyers Pascal Daher and Charbel Chbeir, who believed that the Mikati government "promotes a policy of impunity." The accepted appeal stated, "the banks that have lost their capital and liquidity sources and have been unable to rebuild should have been referred to the higher banking authority, and temporary managers should have been appointed to manage these banks, under Article 208 of the Monetary and Credit Law, in order to protect deposits. The government seeks to cover up the BDL's circulars and the banks' procedures that implement the shadow plan and fund corruption with depositors' money."

On another note, a number of Change MPs submitted a request to publish the preliminary report of the forensic audit and sent a letter to Finance Minister Youssef Khalil, stating that "the report is of utmost importance for discussing the financial and economic plans presented to the Parliament, as these plans have no value without clear numbers, and also for determining the responsibilities for the major collapse that has affected the country."

"Since the contract grants the Finance Minister the right, with full discretion, to provide copies of the report to all Lebanese authorities, we request a copy of this report, whether it is a preliminary or final report," they added.