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The criminal audit of the BDL accounts in its last days. No one expects Riad Salameh to stop rebelling against the decision of the political authority, even with legal advice confirming that the Banque du Liban, as a public sector bank, is obliged to implement the government’s decisions and therefore to cooperate with the auditing company. The opinion of the Legislation and Consultation Commission also confirms that the secrecy invoked by Salameh to not deliver the information to the auditing company does not include financial and banking crimes within its scope, but that will not change anything in reality. Political protection is still present to thwart any attempt to uncover the banking sector. This means that the next period will witness an escalation of the political conflict, especially in light of the insistence of the Presidency of the Republic to complete the audit.
In theory, the criminal audit file has not yet been closed, although all indications confirm that the announcement of its breach will not be delayed. Tomorrow is the deadline for Banque du Liban to answer the questions from the company “Alvarez & Marsal”, which sent them back to the bank through the Ministry of Finance. No unexpected surprises. The phrase “this information is confidential in accordance with the Cash and Credit Law”, which you filled in the cells the first time, will be filled in again in the boxes that accompany the required questions. This will lead, according to more than one party, to the announcement of the auditing firm that it will cease to function, which was the one that had made it clear by resubmitting questions that “it will not be able to do its job in the absence of this information.
Given this reality, it was remarkable that no one discussed the root of the problem, that is, the Banque du Liban’s refusal to provide information that is not subject to bank secrecy and the Money and Credit Law does not hinder its delivery. No one objected to Salameh’s reliance on these two laws as a candlestick to refuse to hand over information that the community has a right to see, before speaking about the right of the government or the right of the audit firm designated by him.
It is surprising that many, including the “government commission of the Central Bank of Lebanon”, came to the conclusion that bank secrecy and professional secrecy prevented the Banque du Liban from providing all the necessary data. But, for example, no one asked why financial engineering transactions were kept secret. Why is even a request for a document containing a “description of the applicable accounting and payment systems” confidential? This is what Salameh decided, realizing that no party or any legal text can link him to what he does not want, as long as he continues to be protected by political patronage. Consequently, Salameh did not care about requests from the company and the Ministry of Finance. After the Governor of the Banque du Liban scoffed at all the questions that were sent to him, Finance Minister Ghazi Wazni returned to the advisory council again, requesting an opinion on the compatibility of the criminal audit firm’s mission with the laws of bank secrecy, cash and credit.
Names are confidentially protected
In notice number 881/2020, issued by the head of authority, Joelle Fawaz, on October 22, and sent to the Ministry of Finance on October 26, confirming that “bank secrecy is limited only to not revealing the names of clients, their money and matters related to them, and does not include within its scope the control of offenses Banks and financial crimes committed in the management of funds by banking institutions. He also stated that “if these crimes are closely related to the names of the clients, their names are indicated with numbers to preserve confidentiality for them.”
The consultation concludes that the cabinet’s decision to hire the Álvarez & Marsal company to carry out the forensic audit process is nothing more than the implementation of Article 65 of the Constitution that ordered the Council of Ministers to formulate the general policy of the state in all areas and make the necessary decisions to implement it. In the present case, the decision to hire the auditing company is binding on everyone, especially for people interested in its implementation, so that the company can carry out its mission and “of them, of course, without any doubt, it is the government of the Banque du Liban and its affiliated or related bodies or its constitution ”.
Fawaz starts from article 25 of the Criminal Procedure Code, which obliges anyone who witnesses an attack on public security or on the life or money of a person to inform the Public Ministry, indicating that “it does not fall within the scope of bank secrecy to control banking violations and financial crimes committed in the administration of funds from banking institutions that undoubtedly include the Central Bank, which is the public sector bank, otherwise the legislator would have sought to protect common crimes that banks may committing in your practice under the guise of secrecy, not just from clients. Regarding the need to preserve banking and professional secrecy, the consultant affirms that he is faced with the obligation to report crimes, noting that the violation of banking secrecy does not constitute in all cases a crime punishable by law, unless secrecy is intentionally disclosed “with the intent to harm others.”
To the House of Representatives?
While “Al-Akhbar” learned that the Ministry of Finance transferred this advice to the Central Bank, informed sources confirm that it will not change Salameh’s behavior, which is based primarily on political immunity that still protects him from liability, remembering that only a political decision is capable of bringing scrutiny to rectitude. Safety.
In this context, sources confirm that there is one of the three tendencies that criminal scrutiny is supposed to take, regardless of whether Álvarez stays or retires:
Salameh’s obligation for his political protection to abide by the legal advice issued by the Advisory Commission, which imposes the bank’s obligation to disclose information to any party decided by the government, noting that such a step could be synonymous with lifting Salameh’s cover.
Parliament met to interpret money and credit laws and bank secrecy, a matter that needs the approval of President Nabih Berri.
Advisory Board: the legislator cannot protect crimes with bank secrecy
The House of Representatives supports the proposed law proposed by the “Strong Lebanon Bloc”, which refers to the addition of a new paragraph to article 2 of the Bank Secrecy Law, which stipulates that bank secrecy and professional secrecy may not be invoked in case of being duly assigned to perform a focused accounting audit.
The third possibility seems the most likely, but it involves a political struggle whose outcome will not be easily known. Returning to parliament does not require obtaining a majority. Under the tripartite protection of Salameh (Nabih Berri, Saad Hariri and Walid Jumblatt), the battle will not be easy, especially since the Presidency of the Republic places criminal scrutiny in the Central Bank, and then in various government institutions, as one of priorities for the remaining two years of the presidential term.
Security laundering!
After the expectations of the exit of the company “Álvarez & Marsal”, the discussion turned towards the assumption of responsibilities in politics, so that the majority was the participation of those who signed the contract, not those who did not implement it. Assigning responsibility to the Ministry of Finance automatically leads to the acquittal of Salameh, and to the suggestion that the problem is not with those who evade the law by not complying with the requests of the auditing firm, but with those who “broke” the contract with the phrase “adherence to Lebanese laws”, which was also emphasized by the Commission for Consultation and Legislation.
However, that discussion does not annul, according to relevant sources, the fact that the contract is the conclusion that the President of the Republic and the Minister of Finance agree on 99 percent of the terms. It is true that the political referent of the Minister of Finance is one of Salama’s political sponsors. However, after the success of the Presidency of the Republic to promote the approval by the Council of Ministers, on July 28, the contract with the company “Alvarez & Marsal” specifically (it was reported that the Minister of Finance was proposing the name Baker Tilly’s. For the forensic audit), all that remained was to sign the contract. The agreement on the final clauses called for a series of meetings between the Minister of Finance, the President of the Republic and their advisers. As a result, the two parties agreed on the final text, including the absence of the need for the article related to allowing the auditing firm to access the bank’s information system (it was considered that this procedure gives the bank a justification for refraining from delivering the information under the pretext of confidentiality) and that the contract must be subject to Lebanese law. What my weight did not meet was the advisory board’s proposal to include the Egmont Group in the contract. Although the Presidency of the Republic considered that this procedure was fundamental, given that the group managed to force the Special Investigation Authority to adhere to the mandatory norms for its work, the Minister of Finance determined (according to his letter to the Consultation) that the matter is outside the mandate of the Council of Ministers, which called him to negotiate and sign with Álvarez.
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