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Salameh: Banking secrecy only removed for illegal activity.

Summary: Central Bank Gov. Riad Salameh Wednesday reaffirmed Lebanon's commitment to banking secrecy, noting that this can only be removed through a legal mechanism in cases of illegal financial activity.

BEIRUT: Central Bank Gov. Riad Salameh Wednesday reaffirmed Lebanon's commitment to banking secrecy, noting that this can only be removed through a legal mechanism in cases of illegal financial activity.

"The Special Investigation Commission was able to protect Lebanon and banking secrecy in Lebanon. Many people wonder about the remaining banking secrecy in Lebanon. We confirm that banking secrecy in Lebanon is still in place and is lifted under a certain mechanism. The Special Investigation Commission has a significant role to play in this mechanism," Salameh told participants in a conference on combating cybercrime.

Lebanon is still one of the few countries in the world with a strict banking secrecy system -- one of the reasons Lebanon has been able to draw billions of dollars in deposits from inside the country and abroad.

The SIC, which was established by the government to combat money laundering and terrorism finance, has lifted banking secrecy on many accounts for illegal financial activities. "Lebanon has become recognized as a cooperating country in combating money laundering and terrorist financing. The Organization for Economic Cooperation and Development also recognized that Lebanon has the laws and mechanisms to combat tax evasion," Salameh explained.

He added that with the exception of tax evasion and for accounts suspected of involvement in money laundering and terrorism funding, banking secrecy will remain intact in Lebanon: "This is essential because banking secrecy has played and will always play an important role in the development of the banking and financial sectors in Lebanon."

The governor also highlighted the role Lebanon and the SIC have played in cracking down on cybercrime, which has grown rapidly over the past few years.

"Today, we are facing cybercrime, but this confrontation must not be only individual, on a country-by-country basis. In today's cybercrimes, if money goes to another country, if there is no cooperation required by law, and if the bank receives and transfers stolen money, the process is successful and the money is lost and difficult to recover," Salameh said.

He added that BDL has confirmed at all international meetings that one of the means to combat cybercrime is the existence of laws that allow for interbank cooperation in this field.

"In this way, the thief does not benefit from stolen money. This [joint] effort requires time and Lebanon cannot do it alone. It [Lebanon] can contribute internationally to awareness and development in this field," Salameh said.

The governor also commented on the phenomenon of bitcoin and other digital currencies.

"BDL has, of course, prevented the use of bitcoin and other virtual currencies as a means of payment, because they are commodities rather than currencies based on the data or rules we know to create confidence in the currency. It is true that prices are rising but we do not know why, and it is true that their use spreads but we do not know its users," he added.

Salameh reiterated that BDL plans to issue its own digital currencies, which will be used and traded in Lebanon. He added that BDL will gradually work on the issuance of these new currencies.

For his part, SIC Secretary-General Abdul Hafiz Mansour shed light on the evolution of cybercrime in Lebanon and many parts of the world. "The number of cybercrimes and other electronic fraudulent cases among Lebanese banks reached 78 cases in 2016 but dropped to 32 cases in the first nine months of 2017 thanks to the joint efforts to combat this phenomenon," he said.

But he noted that the number of individuals who were duped by fraudulent emails rose from 47 cases in 2016 to 90 in the first nine months of 2017.

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Publication:The Daily Star (Beirut, Lebanon)
Geographic Code:7LEBA
Date:Nov 30, 2017
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