On April 20, 2001, the Lebanese Parliament passed Law 318 on fighting money laundering. This law criminalizes the laundering of proceeds of crimes related to narcotics growing, manufacturing and trading, organized crimes, terrorist acts and terrorist financing, illegal arm trade, stealing or embezzling public or private funds or their appropriation by fraudulent means and counterfeiting money or public credit instruments. The said law defines money laundering operations and stipulates fines and imprisonment sanctions imposed on such operations.
Money laundering is any act committed with the purpose of:
- Concealing the real source of illicit funds, or giving, by any means, a false statement about the said source.
- 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, holding or using illicit funds, or investing such funds in purchasing movable or immovable assets, or in carrying out financial operations, while being aware of the illicit nature of these funds.
Law 318 established the Special Investigation Commission (SIC) for fighting money laundering as an independent legal entity with judicial status at Banque du Liban. The Commission has the exclusive right to lift banking secrecy for use by competent judicial authorities and the Higher Banking Commission. The SIC, Lebanon's Financial Intelligence Unit (FIU), receives, analyzes, investigates suspicious transaction reports (STRs) and ensures compliance of banks, financial institutions and other reporting entities with pertinent AML regulations.
The SIC comprise the following members:
The Governor of Banque du Liban: Chairman
The President of the Banking Control Commission: Member
The Judge appointed to the Higher Banking Commission: Member
A professional appointed by the Council of Ministers: Member
Board Member & General Manager of Arab Finance House, Dr. Fouad Matraji signed an agreement with the Middle East branch of the US-based IDOM which provided Arab Finance House with international compliance expertise and superior automated solutions, for fighting Money Laundering and Terrorist Financing
It is required by the Central Bank of Lebanon that all bank employees are trained to recognize and report suspected money laundering transactions. Arab Finance House's Management strongly supports this incentive (Law 318) and has produced a Handbook on Money Laundering Prevention for Arab Finance House managers and employees.