Lebanon's BDL partners with US-based firm to boost financial oversight

By Al Mayadeen English
Source: Agencies
Today 14:48

Banque du Liban partners with US-based K2 Integrity to strengthen Lebanon’s AML/CFT framework and exit FATF’s grey list, aiming to curb illicit financial activity and restore trust in the banking system.

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File photo, a man heads to the Lebanese central bank in Beirut, Lebanon on January 22, 2019. (AP)

Banque du Liban announced a new cooperation agreement with the US-based firm K2 Integrity, a global leader in risk management, compliance, and financial investigations, to curb the expansion of the cash economy and combat illicit and fraudulent financial activities.

According to the statement, this strategic move supports Banque du Liban's commitment to Lebanon's financial reforms, aiming to enhance transparency and accountability across the financial sector.

The agreement comes as Banque du Liban intensifies its efforts to remove Lebanon from the "grey list" of the Financial Action Task Force (FATF). Under the partnership, K2 Integrity will provide both technical and advisory support to help implement procedures aligned with anti-money laundering (AML) and counter-terrorism financing (CFT) standards.

K2 Integrity brings extensive experience in advising central banks, governments, commercial and investment banks, and fintech companies in over 100 countries. The firm's experts possess deep knowledge of international standards and best practices, particularly in Europe, the Middle East, and Africa (EMEA).

Their expertise spans compliance with European directives and US financial crime legislation, including the USA PATRIOT Act, the Bank Secrecy Act (BSA), and the regulations of the Office of Foreign Assets Control (OFAC).

Banque du Liban will utilize K2 Integrity's specialized knowledge and global reach to develop and execute a detailed action plan, identifying systemic vulnerabilities, addressing regulatory gaps, and working toward restoring confidence in Lebanon's financial system both locally and internationally.

The cooperation marks a significant step forward in advancing AML/CFT Lebanon standards and reinforcing the credibility of the country's banking sector amid ongoing economic challenges.

Lebanon aims for initial IMF agreement

This comes amid a series of reforms to restore the country's financial stability, particularly in light of reform structures conditioned by the International Monetary Fund (IMF) to unlock billions in aid.

In April, a report noted that Lebanon may secure a staff-level agreement with the IMF within months, according to Economy Minister Amer Bisat. The report detailed that the agreement would mark a significant step toward securing financial assistance for the country, which has been grappling with a prolonged economic crisis.

Bisat, formerly an emerging markets manager at BlackRock Inc., stated that Lebanon is set to hold an introductory meeting with holders of the country's defaulted bonds on April 25 in Washington. He stressed that discussions with the IMF have been "very detailed and very fruitful," suggesting that late summer would be a "reasonable target" for finalizing a staff-level agreement.

Lebanon defaulted on about $30 billion of international bonds in 2020, and its economy deteriorated.

Additionally, the Israeli war on Lebanon further devastated the nation, particularly the South, resulting in an estimated $14 billion in losses and damage, according to the World Bank.