Last updated: 18/01/2011
CENTRAL AUTHORITY FOR REPORTING
Special Investigation Commission
(hereinafter “SIC”) (formerly called the Financial Intelligence Unit). The SIC is composed of:
a) The Governor of Banque du Liban, as Chairman.
b) The Chairman of the Banking Control Commission
c) The Judge appointed to the Higher Banking Commission.
d) A professional appointed by the Council of Ministers.
In reference to Law 318 of April 20, 2001(“Law 318” ) and SIC Decision of July 4, 2001, amended by SIC Decision of September 4, 2003, the Secretariat was organized as follows:
- The secretary.
- The Financial Investigation Administrative Unit.
- The Audit & Investigation Unit
- The Compliance Unit
- Information Technology & Security Unit
OTHER ANTI-MONEY LAUNDERING REGULATOR(S)
The Public Prosecutor of the Court of Cassation
The Central Bank of Lebanon
ARE LAWYERS COVERED BY ANTI-MONEY LAUNDERING LEGISLATION?
Yes. Lawyers may be punished for participating in money laundering under Law 318, Article 3.
Lawyers are not considered part of those institutions that have due diligence and/or reporting requirements as detailed under the below mentioned Article 4 of Law 318. Indeed lawyers are bound by the professional secrecy requirement, being an obligation for them by virtue of Article 92 of the law governing the Lawyers’ Profession not to disclose any information related to their clients (the “Lawyers’ Law”).
LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING, INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS.
dated April 20, 2001 (hereinafter “Law 318”):
• Defines illicit funds, it also defines and criminalizes money laundering, defines fines and sanctions, describes the SIC and its scope of work and describes a framework by which the SIC can lift banking secrecy.
• Article 2 of Law 318 defined the Money Laundering act as follows: “money laundering is any act committed with the purpose of:
• Concealing the real source of the illicit funds or presenting a false justification of this source in any possible way.
• Transferring or substituting funds known to be illegal for the purpose of concealing or disguising their source, or helping a person involved in the offence to dodge responsibility.
• Acquiring or holding illicit funds, using or investing such funds in purchasing movable or immovable assets, or carrying out financial operations, while being aware of the illicit nature of these funds.
• Article 3: (applicable to lawyers) any person who undertakes money-laundering operations, or intervenes or participates in such operations, shall be punishable by imprisonment for a period of three to seven years, and by a fine of no less than twenty million Lebanese Pounds. Lawyers in Lebanon benefit from an immunity provided for in the Lawyers’ Law. The said immunity prevents any person from suing a lawyer without obtaining the prior approval of the chairman of Bar Association. The decision of the latter may be challenged in front of the court of appeal that will render a final decision in this respect.
• Article 4: (not applicable to lawyers
Institutions that are not subject to the provisions of the Banking Secrecy Law
of September 3, 1956, including individual institutions , namely exchange offices , financial intermediation companies , leasing companies , mutual funds, insurance companies , as well as companies promoting , building and selling real estate , and merchants dealing with high - value commodities ( jewellery , precious stones , gold , art collections , antiques ):
• Must keep specific records of the transactions, the value of which exceeds the amount set by the Central Bank of Lebanon.
• They must also ascertain, through official documents, the identity and address of each client, and must keep for a minimum period of 5 years , photocopies of these documents, as well as photocopies of the operation- related documents.
• Article 7: (considered not to be applicable to lawyers based on the Bar Association’s position as stated here below in this paragraph
) all institutions that are not subject to the Banking Secrecy Law
(as determined not exclusively under the aforementioned Article 4 of Law 318) must immediately report to the SIC any operation they suspect to be concealing Money Laundering and which they were aware of while fulfilling their duties.
• In any event with regard to lawyers, the Bar Association’s position is that the reporting obligation is considered a violation of the professional secrecy requirement, being an obligation for them by virtue of Article 92 of the Lawyers’ Law; such article states the following: “the lawyer may not disclose a secret confided to him or which he became aware of by virtue of his profession even after the termination of his mandate. He may not as well testify against his client in a current case where such lawyer is mandated or in a former case.”
• Article 13: (not applicable to lawyers
) Any person who violates the provisions of Articles 4, 5, 7 and 11 of this law shall be punishable by imprisonment for a period of two months to one year and by a fine not exceeding ten million Lebanese pounds, or by either penalty.
• Article 316 bis of the Lebanese Criminal Law
provides the following: (applicable to lawyers
whoever finances or contributes to financing terrorism or the terrorist acts or the terrorist organizations, intentionally and by any direct or indirect means, shall be punished by temporary hard labor for a period varying between at least 3 years but not exceeding 7 years in addition to a fine of at least the paid amount but that does not exceed three times the amount. Lebanon has ratified the United Nations Convention against Corruption by virtue of a Law dated October 16, 2008.
ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?
The principle in Lebanon is the territoriality of the criminal acts. In other terms, this means that the Lebanese laws and courts will become competent in case any material act of the crime takes place on the Lebanese territory. In this respect, article 3 of Law 318 would apply on visiting lawyers who undertake money-laundering operations, or intervene or participate in such operations. In this case, they shall be punishable by imprisonment for a period of three to seven years, and by a fine of no less than twenty million Lebanese Pounds.
LIST ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE.
IS THE LAW SOCIETY/BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?
No. The Beirut Bar Association
does not enforce or supervise compliance. However, the Bar Association has organized several seminars about money laundering although it is not required to do so by law.
DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS.
• Keeping specific records of the transactions, the value of which exceeds the limit set by the Central Bank of Lebanon fixed at 10,000 USD or its equivalent, and
• Verifying the identity of customers and their addresses, based on official documents and keeping copies thereof and of the documents related to the transactions for a minimum period of 5 years.
However Article 4 does not apply to lawyers.
DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH TO CLIENT DUE DILIGENCE BY LAWYERS?
ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?
ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES?
ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE? IF YES, PLEASE DESCRIBE.
Not applicable because they are not bound by a due diligence obligation.
WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?
Lawyers are not obligated to report suspicious transactions.
DOES ATTORNEY/CLIENT PRIVILEGE AND/OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS?
Yes, it provides an exception. The reporting obligation imposed by Law 318 is considered a violation of the professional secrecy requirement contained in Article 92 of the Lawyers’ Law.
DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?
Disclosing clients’ secrets could be considered as violation to article 92 of the Lawyers’ Law. Therefore, the lawyer may endure one of the disciplinary sanctions mentioned under the Lawyers’ Law
ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?
The laws in Lebanon are silent on this; however, article 3 of the Lawyers’ Law provides:
“The lawyer shall be bound to follow the recommendations of his client for as long as they do not conflict with his conscience and with the interest of his client.” Therefore, the lawyer may decide to stop the transaction without contravening the Lawyers’ Law.
IS THERE A TIPPING-OFF PROHIBITION? IF YES, PLEASE DESCRIBE.
DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT.
The laws in Lebanon are silent to this effect with respect to lawyers.;
ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE.
DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION.
HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?
No information is available.
HAS THE FINANCIAL ACTION TASK FORCE (FATF) OR A FATF-STYLE REGIONAL BODY CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?
Yes; the MENAFATF has conducted a Mutual Evaluation. The Evaluation indicates that lawyers are not subject to the FATF recommendations.
Information provided by:
Chadia El Meouchi, Jihad Rizkallah, Maria Jreissati and Hala Okeili
Badri and Salim El Meouchi Law Firm
315 Saïfi -– P.O.Box 11-3577
Beirut Central District - 2028 5603
Phone: +961 1 995 900; +961 3 519 777
Fax: +961 1 995 906