Lebanon

1. Does Lebanon have legislation making it a criminal offence to engage in money laundering and/or terrorist financing?

Yes. Money laundering and terrorist financing are defined as a criminal offence pursuant to the provisions of the Law no. 44 dated 24/11/2015 that regulates Fighting Money Laundering and Terrorist Financing (“Law no. 44”),which amends and replaces the Law no. 318 dated 20/4/2001 that regulated Fighting Money Laundering (“Law no. 318”).

2. To whom does the legislation apply?

Law no. 44 applies to whoever undertakes or attempts to undertake or incites, facilitates, intervenes or participates in money-laundering operations or terrorist financing operations or any related activities.

3. What does the legislation prohibit?

Law no. 44 prohibits “illicit funds” which include assets, tangible and intangible, movable and immovable, including any legal documents or instruments evidencing title to, or interest in, such assets, resulting from the perpetration of, or the punishable attempted perpetration of, or the participation in a range of offences, whether in Lebanon or abroad.

4. How is money laundering defined? Does underlying criminal activity have to be proven?

Law no. 44 defines money laundering as any act committed with the purpose of:

• concealing the real source of illicit funds, or giving, by any means, a false justification regarding the said source, while being aware of the illicit nature of these funds;
• transferring or transporting funds, or substituting or investing the latter in purchasing movable or immovable assets or in carrying out financial transactions for the purpose of concealing or disguising such funds’ illicit source, or assisting a person involved in the perpetration of any of the offences mentioned in our answer to question 3 above to avoid prosecution, while being aware of the illicit nature of these funds.

According to Law no. 44, money laundering is a separate offence that does not necessitate a conviction for an underlying offence. Charging the perpetrator of an underlying offence shall not preclude being prosecuted for money laundering, in the event of difference in the criminal elements. It is understood from this provision that underlying criminal activity does not necessarily have to be proven.

5. What level of intent or knowledge is required to establish a violation?

A violation is established when the perpetrator purposely and knowingly conceals the real source of the illicit funds. Lebanese penal principles require proof of the defendant’s criminal intent and motive.

6. What are the potential penalties for infringing the legislation?

Money laundering is punishable by imprisonment for a period of three to seven years, and by a fine not exceeding twice the amount laundered.

Terrorist financing operations are punishable by imprisonment for a period of not less than seven years with forced labour. Other related criminal activities shall be punishable by the penalties stipulated for in the Penal Code as sanction for undertaking or attempting to undertake or inciting or facilitating or intervening or participating in such criminal activity.

7. Does the legislation have extra-territorial reach?

Yes. Law no. 44 incriminates money laundering and terrorist financing whether the underlying criminal activities were committed in Lebanon or abroad.

8. Are there additional anti-money laundering or counter terrorist financing regulations or obligations, such as registration or reporting obligations, for businesses or individuals that operate in particular sectors or undertake particular activities?

Yes. Banks, financial institutions, leasing companies, institutions that issue and promote credit or charge cards, institutions that perform money transfers electronically, exchange institutions, financial intermediation institutions, collective investments schemes, and any other institution requiring a license or supervised by Banque du Liban, must comply with the provisions of Law no. 44 as well as with the regulations issued by Banque du Liban for the purpose of implementing the provisions of Law no. 44.

Insurance companies, casinos, real estate dealers and agents, and merchants of valuables (jewellery, precious stones, gold, works of art, antiques), must keep records of operations that exceed the threshold designated by the “Special Investigation Commission” (the “SIC”) which was established by Law no. 318 to enforce the laws and regulations relating to the fighting of money laundering and terrorism financing and must report any suspicious transaction to SIC. Certified accountants, notaries and lawyers are also bound by the obligation to report to the SIC.

9. What are the potential penalties for failing to comply with these obligations?

Failure to comply with these obligations shall be punishable by imprisonment for a period of two months up to one year and by a fine not exceeding one hundred million Lebanese pounds, or by either penalty. This does not preclude the enforcement, on the concerned parties, of the administrative penalties stipulated for in the Code of Money and Credit, or the penalties stipulated for in other laws and regulations.

10. Who are the relevant enforcement authorities in Lebanon and what are their contact details?

SIC is the relevant enforcement authority in Lebanon. SIC contact details are as follows:

T: +961 175 6701

F: +961 174 3999

postal address: P.O. Box 11-5544 Beirut

sic@sic.gov.lb

www.sic.gov.lb