Central Bank Decision No. 13458 Amending Electronic Banking and Financial Operations

Circular No. 630

To Banks, Financial Institutions, and Institutions Engaged in Electronic Financial and Banking Operations

We hereby enclose a copy of Central Bank Decision No. 13458 dated July 19, 2022, amending Fundamental Decision No. 7548 dated March 30, 2000 (Electronic Financial and Banking Operations) attached to Fundamental Circular No. 69.

Beirut, July 19, 2022
Governor of the Central Bank
Riad T. Safeddine

Central Bank Decision No. 13458
Amending Fundamental Decision No. 7548 dated March 30, 2000 Concerning Electronic Financial and Banking Operations

The Governor of the Central Bank,
Pursuant to the provisions of Anti-Money Laundering and Counter-Terrorist Financing Law No. 44 dated November 24, 2015, particularly Article Four thereof; Pursuant to Fundamental Decision No. 7818 dated May 18, 2001 and its amendments concerning the regulatory framework for monitoring financial and banking operations to combat money laundering and terrorist financing; Pursuant to Fundamental Decision No. 7548 dated March 30, 2000 and its amendments concerning electronic financial and banking operations; Pursuant to the recommendations of the Financial Action Task Force (FATF); and Pursuant to the decision of the Central Council of the Central Bank taken in its meeting held on July 18, 2022, hereby decides the following:

Article 1: The text of paragraph (2) under the "Second" section dated March 30, 2000 of Fundamental Decision No. 7548 is repealed and replaced with the following:
"2- Applying due diligence measures to existing customers based on relative importance and risks, and taking due diligence measures regarding current business relationships at appropriate times, provided that consideration is given to whether due diligence measures have been previously taken, the timing of their taking, and the adequacy of the data obtained."

Article 2: The text of paragraph (7) under the "Second" section dated March 30, 2000 of Fundamental Decision No. 7548 is repealed and replaced with the following:
"7- Retaining all records obtained through due diligence measures regarding the 'customer' and the 'beneficial owner', specifically their full name, profession, place of residence address, and registered business address for legal entities. In case the main place of business differs from their financial status, account files shall be retained for a minimum of five years after closing the account or terminating the business relationship, along with all documents related to all operations including commercial correspondence and results of any conducted analysis, for a minimum of five years after completing the operation. These operational records must be sufficient to allow the reconstruction of individual operations as necessary, such that these records can serve as evidence for litigation and investigation in the event of any criminal activity."

Article 3: The following text is added to paragraph (b) of section (9) under the "Second" section of Article 9 bis of Fundamental Decision No. 7548 dated March 30, 2000:
"- Scrutinizing operations conducted throughout the duration of the relationship with the customer to ensure consistency between performed operations and what the institution knows about the customer, their activity pattern, and represented risks, as well as the source of funds when required.

• Ensuring that documents, data, or information obtained pursuant to due diligence measures are continuously updated and reliable through reviewing existing records, particularly for high-risk customer categories."

Article 4: The text of both the ninth and tenth paragraphs under section (11) under the "Second" section of Article 9 bis of Fundamental Decision No. 7548 dated March 30, 2000 is repealed and replaced with the following:
"- Adoption of specific policies, controls, and procedures by senior management, based on the mandates stipulated in this article, for risk classification and mitigation.

• Documenting risk assessment results as needed and retaining them to provide relevant authorities with them when necessary."

Article 5: The text of paragraph (15) under the "Second" section of Article 9 bis of Fundamental Decision No. 7548 dated March 30, 2000 is repealed and replaced with the following:
"15- Ensuring that foreign branches and majority-owned subsidiaries apply the anti-money laundering and counter-terrorist financing measures mandated in Lebanon, when the minimum requirements of the host country are less stringent than those applied in Lebanon, to the extent permitted by the laws and regulations of the host country. In case the host country permits appropriate implementation of specific anti-money laundering and counter-terrorist financing measures aligned with those in Lebanon, the financial group shall apply additional appropriate money laundering and terrorist financing risk management measures and notify the 'Special Investigation Body' thereof."

Article 6: The text of paragraph (16) under the "Second" section of Article 9 bis of Fundamental Decision No. 7548 dated March 30, 2000 is repealed and replaced with the following:
"16- Regarding financial groups, anti-money laundering and counter-terrorist financing programs must be applied at the group level as a whole, including all branches and majority-owned subsidiaries, and these programs must include the following measures:

• Appointing a compliance officer at the group management level.
• Policies and procedures for exchanging information related to customer due diligence and managing money laundering and terrorist financing risks.
• Providing information regarding customers, accounts, and operations from branches and subsidiaries to the group-level compliance officer when necessary for anti-money laundering and counter-terrorist financing purposes, including information, analytical reports, and reports on seemingly unusual activities. Furthermore, branches and subsidiaries should receive such information from the group-level compliance officer in a manner commensurate with risk management, information analysis, reporting, and unusual operations.
• Providing adequate guarantees regarding confidentiality and the use of exchanged information, including safeguards against tipping off or notifying the customer."

Article 7: This decision takes effect upon its issuance.
Article 8: This decision shall be published in the Official Gazette.

Beirut, July 19, 2022
Governor of the Central Bank
Riad T. Safeddine