Preventive measures to protect the financial and economic sector in Lebanon from dealing with unlicensed entities subjected to sanctions issued by foreign authorities

Central Bank Circular No. 170

To Banks and Financial Institutions, All Institutions Subject to the Supervision of the Central Bank of Lebanon, Financial Intermediation Companies, and Collective Investment Funds

We enclose herewith a copy of Decision No. 13735 dated July 14, 2025, concerning preventive measures to protect the financial and economic sector in Lebanon from dealing with unlicensed entities subjected to sanctions issued by foreign authorities.

Beirut, July 14, 2025

Governor of the Central Bank of Lebanon Karim Saeed

Decision No. 13735

Preventive Measures to Protect Lebanon's Financial and Economic Sector from Dealing with Unlicensed Entities Subjected to Foreign Sanctions

The Governor of the Central Bank of Lebanon, Pursuant to the Monetary and Exchange Law, particularly Articles 70, 174, 182, and 184 thereof; Pursuant to the provisions of Anti-Money Laundering and Counter-Terrorist Financing Law No. 44 dated November 24, 2015, particularly Article 4 thereof; Pursuant to the provisions of Law No. 161 dated August 17, 2011, concerning Financial Markets; Pursuant to the Rules of Procedure for Financial Markets issued on November 10, 2016, by the Lebanese Capital Market Authority; Whereas the Monetary and Exchange Law and relevant Circulars issued by the Central Bank of Lebanon prohibit conducting any banking or financial activity without prior authorization from the Central Bank; Pursuant to Decision No. 10965 dated April 5, 2012, concerning the relationship between banks and financial institutions and correspondent banks (attached to Circular No. 126 for Banks); Pursuant to Decision No. 12253 dated May 3, 2016, concerning the principles for dealing with the U.S. law issued on December 18, 2015, and its implementing regulations (attached to Circular No. 137 for Banks); Whereas the Financial Action Task Force (FATF) has placed Lebanon on the Grey List under "Jurisdictions under Increased Monitoring" due to deficiencies and/or weaknesses in adopted measures; Whereas the Action Plan required from Lebanon by the FATF mandates addressing the status of the unlicensed financial sector, particularly exchange houses, money transfer companies, and associations that conduct financial and banking operations without obtaining authorization from the Central Bank; Whereas dealing with unlicensed entities subjected to international sanctions, particularly when these latter form a link within a chain of suspicious operations that may expose the licensed financial sector to unwitting involvement in money laundering and/or terrorist financing crimes; And seeking to prevent the imposition of additional stringent measures that may be taken against the financial and economic sectors in Lebanon and abroad; And avoiding any legal violations that correspondent banks may face, which could negatively affect dealings with these banks; And safeguarding the supreme national interest; And based on the powers vested in the Governor to ensure the operation of the Central Bank of Lebanon based on the principle of continuity of public service,

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Decrees as follows:

Article 1: Banks and financial institutions, all institutions licensed by the Central Bank of Lebanon, financial intermediation companies, and collective investment bodies are prohibited from conducting any dealings (financial, commercial, or otherwise...) directly or indirectly, wholly or partially, with unlicensed exchange houses, money transfer companies, associations, and collective investment bodies such as "Al-Qard al-Hasan Association", "Tasahil S.A.L.", "Al-Yasser for Financing and Investment", "Bayt Al-Mal for Muslims", and other institutions, bodies, companies, entities, and associations listed on international sanctions lists, particularly regarding:

• Providing or facilitating financial, monetary, remittance, or intermediary services.
• Establishing or executing financing or leasing arrangements.
• Facilitating direct or indirect access to the Lebanese banking system, in any currency, by the aforementioned associations, bodies, companies, and others, or by any of their branches.

Article 2: Non-compliance with the provisions of this Decision exposes violators to legal prosecution and may lead to measures up to:

• Suspension or revocation of the license.
• Freezing accounts and assets.
• Referral to the Special Investigation Commission.

Article 3: The Central Bank of Lebanon confirms that it will take all appropriate administrative and legal measures to enforce the application of this Decision's provisions.

Article 4: This Decision shall take effect upon its issuance.

Article 5: This Decision shall be published in the Official Gazette.

Beirut, July 14, 2025

Governor of the Central Bank of Lebanon Karim Saeed