Bank­ing se­crecy lifted 42 times in 2016: re­port

Watch­dog says it took ac­tions to com­bat ter­ror­ism, money laun­der­ing

The Daily Star (Lebanon) - - FRONT PAGE -

BEIRUT: Le­banon lifted bank­ing se­crecy in 42 cases of sus­pected in­volve­ment in money laun­der­ing, em­bez­zle­ment and ter­ror­ist fund­ing, ac­cord­ing to the Cen­tral Bank’s fi­nan­cial watch­dog, the Spe­cial In­ves­ti­ga­tion Com­mis­sion said in its 2016 re­port.

Ac­cord­ing to the re­port, the SIC re­ceived 470 cases and in­ves­ti­gated 399 of them. It added that 71 cases are still pend­ing, which means that the SIC will de­ter­mine if they will be pros­e­cuted, de­pend­ing on the strength of the ev­i­dence against them.

But the re­port did not dis­close the na­tion­al­i­ties in­volved in the sus­pected cases or the size of the ac­counts that were frozen by fi­nan­cial author­i­ties. Out of the cases re­ceived by the SIC, 363 came from Le­banese sources while the re­main­ing 107 came from abroad.

Le­banon has been ag­gres­sively en­forc­ing the laws that were passed by Par­lia­ment to crack down on all types of fi­nan­cial crimes and money laun­der­ing. Le­banese banks are obliged to ex­am­ine all sus­pi­cious ac­counts and re­port them to the Cen­tral Bank and the SIC.

The crack­down is part of an in­ter­na­tional ef­fort to tighten the noose on the fi­nances of ter­ror­ist or­ga­ni­za­tions such as Daesh (ISIS) and Jab­hat Fatah al-Sham. Hezbol­lah is also in­cluded on the black­list.

The SIC said out of the cases ex­am­ined, 163 in­volved em­bez­zle­ment of pri­vate funds, 63 forgery, 23 ter­ror­ism or ter­ror­ism fund­ing and 11 fraud. The re­port gave ex­am­ples of the cases that were cracked by the fi­nan­cial author­i­ties in Le­banon.

It added that one case in­volved ter­ror­ism fund­ing.

“A lo­cal bank filed a sus­pi­cious trans­ac­tion re­port on a cus­tomer and re­lated ac­counts, after com­ing across an ar­ti­cle in a news­pa­per that men­tioned names of in­di­vid­u­als ar­rested abroad by a for­eign law en­force­ment agency for sus­pi­cion in tak­ing part in a ML/TF net­work and for be­ing af­fil­i­ated with [Daesh],” the SIC said, us­ing a short­hand for money laun­der­ing and ter­ror­ist fi­nanc­ing.

The re­port added that the SIC ini­ti­ated its in­ves­ti­ga­tion by ob­tain­ing all avail­able bank records in­clud­ing “know your cus­tomer” forms, bank state­ments and copies of iden­ti­fi­ca­tion doc­u­ments from the re­port­ing bank, and also cir­cu­lated the sus­pect’s name to all banks op­er­at­ing in Le­banon.

“The anal­y­sis per­formed on the ac­count state­ments iden­ti­fied sev­eral cash de­posits be­low the thresh­old, and pay­ment or­ders that were not re­lated to the sus­pect’s line of busi­ness that were fol­lowed by cash with­drawals. The re­lated ac­counts re­flected a sim­i­lar pat­tern of trans­ac­tions. Fur­ther­more, the SIC anal­y­sis re­vealed that a spon­ta­neous dis­sem­i­na­tion re­ceived from a coun­ter­part [fi­nan­cial in­tel­li­gence unit], as a re­sult of its own anal­y­sis of sev­eral [sus­pi­cious trans­ac­tion re­ports] filed by an in­ter­na­tional money-re­mit­tance com­pany, had also men­tioned the same sus­pect,” the re­port ex­plained.

After a thor­ough in­ves­ti­ga­tion, the SIC lifted bank­ing se­crecy and froze the ac­count bal­ances of the sus­pect at all banks and fi­nan­cial in­sti­tu­tions and also froze trans­ac­tions at money-re­mit­tance com­pa­nies.

In an­other sus­pected ter­ror­ism fi­nanc­ing in­ci­dent, the SIC said it re­ceived a re­quest of as­sis­tance from the In­ter­nal Se­cu­rity Forces, which ap­pre­hended a sui­cide bomber be­fore be­ing able to carry out his at­tack in Le­banon. It added that the ISF was seek­ing the SIC’s as­sis­tance to iden­tify ac­counts and trans­ac­tions of sev­eral sus­pects.

“The SIC ini­ti­ated its in­ves­ti­ga­tion by cir­cu­lat­ing the names of the sus­pects to all banks and fi­nan­cial in­sti­tu­tions op­er­at­ing in Le­banon in an ef­fort to iden­tify bank ac­counts and trans­ac­tions. Dur­ing this pe­riod, and while un­der in­ter­ro­ga­tion by law en­force­ment author­i­ties, the ap­pre­hended sui­cide bomber pro­vided author­i­ties with names of ad­di­tional sus­pects that were in­volved in two sui­cide bomb­ings that took place in Le­banon killing in­no­cent civil­ians and in­jur­ing many more. Un­der in­ter­ro­ga­tion, some of the ar­rested sus­pects con­fessed to have pledged al­le­giance to [Daesh],” the re­port said.

The SIC con­ducted a thor­ough in­ves­ti­ga­tion into the sus­pects’ bank ac­counts. “The anal­y­sis on those bank ac­counts re­vealed that they had min­i­mal ac­tiv­ity and bal­ances. Fur­ther­more, a money-re­mit­tance com­pany re­ported sev­eral trans­ac­tions in prior years,” the re­port said.

Ab­dul Hafez Man­sour, the sec­re­tary-gen­eral of the SIC, said that the com­mis­sion has en­deav­ored to ex­am­ine any sus­pi­cious ac­counts with the help of the author­i­ties.

“The SIC work­load has grown; 470 ML/TF cases were re­ceived, 107 from for­eign sources and 363 from lo­cal sources. Fur­ther­more, 514 spon­ta­neous dis­clo­sures were han­dled dur­ing the year,” he said.

Cen­tral Bank Gov. Riad Salameh also praised the work of the SIC over the past years. “Your work on spon­ta­neous dis­clo­sures was as de­mand­ing. So was your track­ing of evolv­ing ML/TF trends that led to im­por­tant work jointly car­ried out by the SIC, [the Cen­tral Bank], ISF and [the As­so­ci­a­tion of Banks in Le­banon], which re­sulted in the is­suance of the cy­ber­crime preven­tion guid­ance,” the gov­er­nor said in a let­ter pub­lished in the SIC re­port.

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