MP Mneimneh confronts the Association of Banks: The struggle to lift banking secrecy

From the beginning, it was no secret to anyone that the Association of Banks and those in its orbit were resentful of the idea of ​​amending the Bank Secrecy Act, according to the decree of the draft law to which the government referred before the election. the Parliament. This amendment, which is required by the IMF within the framework of staff-level understanding, will not only give the judiciary and the tax authority the right to lift banking secrecy, but will allow, for the first time, a large part of the bank violations, which were hidden behind the secrecy that protected client accounts. Note that the draft law provides for the granting of the power to revoke banking secrecy to both the Banque du Liban and the Banking Control Commission, in order to detect these specific offenses.

IMF insistence puts pressure on MPs
Despite the Association of Banks’ dissatisfaction, however, it seems clear that work on the draft law in the subcommittee of the Finance and Budget Committee is progressing with remarkable momentum, while the final version of the draft law is expected to be decided early next week. In practice, it is clear that the Finance and Budget Committee is aware of the sensitivity of the International Monetary Fund bill, which set it as a crucial condition before signing any final agreement with Lebanon, which has hitherto been the obstacle removed. which prevented the acceptance of these types of amendments during the previous stages.

As for the main test before the House of Representatives, it will be when voting on the draft law in the Joint Committees and the General Assembly, after it has been approved by the Finance and Budget Committee, where it is accepted that the extent of the seriousness of the parliamentary blocs in their support for the draft law will become clear. Note that many fear the emergence of real surprises at that particular stage, given the sensitivity of the proposed changes, and the type of influential groups affected by them.

Mining Association of Banks
In any case, with the acceleration of the discussion within the subcommittee on the amendments, it became clear that the Association of Banks was still trying until the last minute to include some mines and traps in the bill that it content would empty. This is exactly what Representative Ibrahim Mneimneh revealed in a statement on these developments, when he indicated that the representative of the Association of Banks had demanded “the inclusion of a clause enforcing the law with retroactive effect. prevented, “which urged Mneimneh. , during the session of the subcommittee, to firmly confront this proposal and demand that the judiciary be empowered to collect Bank secrecy on all accounts suspected of crime. Mneimneh also indicated that he demands amendments that do not limit the removal of secrecy to financial crimes, but also include other cases such as fraud and breach of trust. The issue of retroactive effect and the extent of the lifting of bank secrecy was thus left between the proposal of the Association of Banks, and Mneimneh’s rejection of the idea, while this issue will be decided at the next subcommittee meeting.

In short, what the Association of Banks is trying to do here is to plant a mine in the account, which limits the powers to lift banking secrecy determined in the financial transactions that will take place in the future, which protects the the Bank Secrecy Act on the data of all banking operations that have taken place in the past. This mine, which the Association of Banks tried to define, can only be understood in the context of an attempt to conceal violations or violations that occurred in previous stages, especially since banking secrecy is kept over the data of the operations which has taken place in the past will not offer any incentives to attract new deposits later, According to the arguments that have always been offered by the Association of Banks to defend the principle of banking secrecy.

Hide previous commitments
In all cases, it is known that the IMF’s insistence on amending the Bank Secrecy Act is in the interest of improving financial transparency, which enables the judiciary to detect financial crimes, facilitate the fight against tax evasion by the tax authorities. , in addition to opening the door to the detection of bank violations by the Banking Oversight Committee. However, the new mine that the Association of Banks is trying to incorporate into the bill will prevent the judiciary from detecting any financial crime that has taken place in the past, and will prevent the tax authorities from detecting any tax evasion operations that have taken place before the law. passed. Note that the financial recovery plan provides for the establishment of a special section for large taxpayers, to investigate unexplained tax liabilities, which requires this department to be able to view the historical data of bank accounts.

The most important thing in the case is that this amendment requested by the Association of Banks – that is, to prevent the retroactive effect of the law – will prevent the process of searching in bank records for the major violations that have occurred in recent years. occurred, which at one stage caused a growing mass of accumulated losses in bank budgets, wasting Depositors’ money. These irregularities are related, for example, to the stage of financial engineering, the large mass of profits that flowed into the accounts of bank owners and a narrow circle of happy depositors, as opposed to the mass losses that flowed into the accounts of the Central Bank. As it became known, the details of all these operations had not yet been disclosed, nor the type of beneficiaries, nor even about the actual size of the profits made at that stage, at the expense of depositors’ money. not.

Exposure of the objectives of the Association of Banks
In short, the Association of Banks has in recent years sung about the benefits of banking secrecy, and its ability to attract deposits from abroad, to reject any reconsideration of the Bank Secrecy Act. It is known that all these benefits come from the past, after Lebanon years ago signed treaties requiring cooperation with foreign tax authorities, to hand over their data to their residents’ accounts, all the arguments presented to the principle of banking secrecy . As for what was revealed by Representative Ibrahim Mneimneh, regarding the mines that the Association of Banks is trying to plant in the draft law, it reveals today the main reason that led many to the amendment of the Bank Secrecy Act, which is to be erased, to evade. the crimes and transgressions that have taken place in the past, which are not necessarily related to competitive advantages, provided by banking secrecy to Lebanon’s banks.

In short, Mneimneh promised at the end of his statement to continue working to prevent the bill from including any traps or amendments that would destroy it from its effects, as usually happens when the implementation of the law is linked to the foundation of some bodies, which may never be formed. Mneimneh has also undertaken to inform the public about the developments of this file in recent days, which for public opinion will mean the outcome of the Association of Banks’ attempt to prevent the law from working retroactively. So far, it seems clear that Mneimneh is aiming to address this issue seriously within the sub-committee, while it is supposed to show during the next week to what extent the other members of the committee have gathered around the direction that Mneimneh is pushing.

Leave a Comment