Regulatory Alerts2022-10-07 | 13483Facilities that may be granted by BDL to banks and financial institutions
Issued by the Governor of Banque du Liban on October 7, 2022, Circular No. 643 amends Basic Decision No. 6,116 to expand foreign currency facilities for banks and financial institutions importing wheat, medicines, medical supplies, infant formula, and related materials. The amended decision mandates that banks secure foreign currency based on designated invoices, ensure document validity under full responsibility, and require clients to settle coverage ratios in Lebanese Lira cash at fixed exchange rates. Furthermore, it establishes a mandatory high-level banking secrecy waiver process, requiring banks to collect signed client declarations authorizing the disclosure and publication of import-related data to Banque du Liban, its affiliates, and concerned banks.
Circular No. 643 To Banks and Financial Institutions
We enclose Circular No. 13,483 dated October 7, 2022, regarding the amendment of Basic Decision No. 6,116 dated March 7, 1996 (Facilities That May Be Granted by Banque du Liban to Banks and Financial Institutions), attached to Basic Circular No. 23.
Beirut, October 7, 2022 Governor of Banque du Liban Riad T. Salam
Circular No. 13,483 Amendment of Basic Decision No. 6,116 dated March 7, 1996
The Governor of Banque du Liban, Pursuant to the Monetary and Banking Law, particularly Article 70 thereof; And pursuant to Basic Decision No. 6,116 dated March 7, 1996, and its amendments regarding the facilities that may be granted by Banque du Liban to banks and financial institutions; And pursuant to the decision of the Central Council of Banque du Liban taken in its meeting held on October 5, 2022;
Decrees as follows:
Article One: The text of "First" from Article 14 of Basic Decision No. 6,116 dated March 7, 1996 is repealed and replaced with the following text: « First: Banks may request Banque du Liban to secure foreign currency for: 1- exclusively for wheat imports, based on the value of designated invoices. 2- as determined by the Ministry of Health for exclusively designated invoices for imports of medicines, medical supplies, infant formula up to one year old, and materials used in medicine manufacturing. »
Article Two: The text of Paragraph (1) from "Fourth" in Article 14 of Basic Decision No. 6,116 dated March 7, 1996 is repealed and replaced with the following text: « 1- The final invoice regarding wheat. »
Article Three: The text of "Fourth" in Article 14 of Basic Decision No. 6,116 dated March 7, 1996 is repealed and replaced with the following text: « Banks must ensure, under their full responsibility, the validity and legality of documents submitted to cover imports exclusively for local market consumption needs according to the second paragraph. »
Article Four: The text of "Sixth" in Article 14 of Basic Decision No. 6,116 dated March 7, 1996 is repealed and replaced with the following text: « The client settles the required coverage ratio to the concerned bank in Lebanese Lira cash based on the exchange rate fixed with banks. The concerned bank must deposit these amounts in Banknotes at Banque du Liban to secure the foreign currency needed for import operations. »
Article Five: The numbering of "Eleventh" in Article 14 of Basic Decision No. 6,116 dated March 7, 1996 is amended so that it becomes "Twelfth".
Article Six: The following text of "Eleventh" is added to Article 14 of Basic Decision No. 6,116 dated March 7, 1996: « Eleventh: Banks must collect from all clients benefiting from the provisions of this article in the form of a high-level banking secrecy waiver letter towards Banque du Liban, its affiliated bodies, and the concerned banks regarding all information related to import operations they have or will undertake as per the attached model. »
Article Seven: This decision takes effect upon its issuance.
Article Eight: This decision is published in the Official Gazette.
Beirut, October 7, 2022 Governor of Banque du Liban Riad T. Salam
To the Esteemed Banque du Liban, Subject: Waiver of Banking Secrecy
The undersigned, in the capacity of [Owner/Director/Chairman of the Board/Authorized Signatory] for [Institution/Company], hereby declares as follows: Since Banque du Liban is securing foreign currency to meet import needs for [Wheat / Medicines / Medical Supplies / Infant Formula up to one year old / Materials used in medicine manufacturing] which [our institution/our company] handles under Article 14 of Basic Decision No. 6,116 dated March 7, 1996; Therefore, by this letter, [our institution/our company] confirms its explicit waiver of banking secrecy towards Banque du Liban, its affiliated bodies, and the concerned banks regarding all information related to import operations that [our institution/our company] has undertaken or will undertake, and which benefit from the provisions of the aforementioned article. We also consent to Banque du Liban and/or the concerned bank using and publishing this information as deemed appropriate, verifying it by any means, and providing it to administrative and judicial authorities when needed.
Please accept the highest regards.