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Lebanon's central bank tracks down fraudsters


Written by Frédéric Dubessy on Wednesday, March 9th 2022 à 16:06 | Read 436 times



LEBANON. On Wednesday 9 March 2022, the Central Bank of Lebanon (BDL) asked the country's commercial banks to provide the names of political figures who did not comply with a circular ordering them to repatriate funds sent abroad to avoid the country's collapse in 2019. They have until the end of March 2022 to send them to the Special Commission set up to investigate the matter. "Cash deposits made between July 2017 and the end of December 2020 are also concerned," if the beneficiary is a politically exposed person, the BDL said.

This request is all the more sensitive as the Central Bank's own governor, Riad Salamé, is suspected of corruption, money laundering as well as embezzlement and fund transfers by several European countries. In particular in France - he also has French nationality - in Switzerland and Luxembourg, but also, since April 2021, in Lebanon.
In January 2022, he was banned from leaving the country by his country's justice system.

Seventy-one year old Riad Salamé has held this position since 1 August 1993 and has been reappointed three times (1999, 2005 and 2011). According to Sherpa and the collective "The people want a reform of the system", launched in October 2019 with the start of major protests against the ruling class, Riad Salamé has built up a wealth of several hundred million euros, including €35 million invested in France, mainly in real estate.

Lebanon in default for two years

In October 2021, the Pandora papers (an investigation by the International Consortium of Investigative Journalists (ICIJ) fuelled by the leakage of 11.9 million financial documents), revealed that the governor of the BDL owned offshore companies (Amanior founded in 2007 and of which he is the director, Toscana created in 2013 held by his son) in tax havens with the help of the firm Trident Trust. He was already listed in the Panama Papers in 2016 for his shares in the brokerage firm Forry Associates Limited set up by his brother Raja.

In parallel, since March 2020, several Lebanese political parties point to him as responsible for the bankruptcy of the state and the inexorable fall of the Lebanese pound (see below). They believe that the governor has set up a Ponzi scheme (remuneration of the oldest customers by the money of the new ones), because of his policy of regularly resorting to debt in order to pay back the interest on late payments already accumulated. 

Adulated in the 1990s and 2000s for his policy of parity between the Lebanese pound and the US dollar offering a golden age to the Lebanese until 2011 and the beginning of the war in Syria, Riad Salamé is under attack from all sides and continues to deny all these accusations.

Since March 2020, Lebanon has been in default and facing serious economic, political and, by extension, social problems. The state has to manage a financial debt of €68 billion and the Lebanese pound has lost 95% of its value in two years and nothing seems to be able to stop this continuing fall. On 2 March 2022, it reached a new record with a black market exchange of 10,000 pounds for $1 against a parity set at the time of its indexation to the dollar at 1,500 pounds for $1.

The country of the Cedar is experiencing the most important economic crisis in its century of history, described by the World Bank as "one of the worst in the world since 1850". It is trying to obtain help from the International Monetary Fund (IMF), which is waiting for the vote and the application of indispensable reforms to release the sums needed for its recovery.



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