Beirut, Lebanon — Lebanon’s parliament on Thursday approved amendments to banking secrecy legislation, a key reform demanded by the International Monetary Fund, as Lebanese officials hold meetings with global finance institutions in Washington.
A statement from speaker Nabih Berri’s office said parliament passed amendments to “the law related to banking secrecy” and to monetary legislation.
The international community has long demanded major fiscal reforms to unlock billions of dollars in aid to restart the Lebanese economy in the wake of a five-year economic collapse widely blamed on mismanagement and corruption.
The crash since 2019 has seen the local currency lose most of its value against the US dollar and has pushed much of the population into poverty, with ordinary people locked out of their savings.
The recent war between Israel and Lebanon’s Iran-backed Hezbollah group has worsened matters, with the cash-strapped country now also needing funds for reconstruction.
Lebanese rights group Legal Agenda said the amendments allow “banking supervisory and regulatory bodies… to request access to all banking information without linking the request to a specific objective”.
These bodies will now be able to access information including customer names and deposit details, and look into possible suspicious activity, the group said.
Lebanon has long had strict rules over bank account privacy that critics have said makes it susceptible to money laundering.
The cabinet had approved the amendment earlier this month, saying it would apply retroactively for 10 years from the date of request.
That means it would apply to the start of the economic crisis, when bankers were accused of assisting influential individuals to transfer large amounts of money overseas.
Parliament’s approval comes with Finance Minister Yassine Jaber, Economy Minister Amer Bisat and new central bank governor Karim Souaid in Washington for meetings with the World Bank and IMF.
Jaber said earlier this week that parliamentary approval of the banking secrecy amendment would give a “boost” to the delegation’s meetings.
In April 2022, Lebanon and the IMF reached conditional agreement on a $3-billion loan package, but painful reforms that the 46-month financing program would require have largely not happened.
In February, the IMF said it was open to a new loan agreement with Beirut following discussions with the newly appointed Jaber.
The new government has pledged to implement other required reforms, and approved draft legislation on restructuring the banking sector earlier this month.
