Circular No. 667

To Banks, Financial Institutions, and Institutions Engaging in Financial and Banking Operations via Electronic Means

We hereby transmit herewith a copy of Interim Decision No. 13547 dated 13/4/2023 regarding the amendment of Interim Decision No. 7548 dated 30/3/2000 (Financial and Banking Operations via Electronic Means), attached to Basic Circular No. 69.

Beirut, April 13, 2023

Governor of Banque du Liban

Riad T. Salamah

Interim Decision No. 13547

Amending Interim Decision No. 7548 dated 30/3/2000 regarding Financial and Banking Operations via Electronic Means

The Governor of Banque du Liban,

Pursuant to the Monetary and Discount Law, particularly Articles 174 and 70 thereof,

Pursuant to Law No. 133 dated 26/10/1999 regarding the tasks of Banque du Liban,

Pursuant to Law No. 81 dated 10/10/2018 regarding Electronic Transactions and Personal Data, particularly Article 64 thereof,

Pursuant to Interim Decision No. 7548 dated 30/3/2000 and its amendments regarding Financial and Banking Operations via Electronic Means,

Pursuant to the decision of the Central Council of Banque du Liban taken during its session held on 29/3/2023,

Decides as follows:

Article 1: The text of the first paragraph of Article 3 of Interim Decision No. 7548 dated 30/3/2000 is deleted and replaced with the following text:

"First: It is prohibited to conduct banking or financial operations via mobile or fixed electronic devices between clients of different banks exceeding a value of 10,000 JOD, except for receiving banking transfer requests from the client, provided that:"

Article 2: The text of the second paragraph of Article 3 of Interim Decision No. 7548 dated 30/3/2000 is deleted and replaced with the following text:

"Second: Banking or financial operations may be conducted via mobile or fixed electronic devices through applications or software, by using cards and/or bank accounts belonging to clients of different banks, provided that:

1. Prior approval from Banque du Liban is obtained for any such application or software that will be used to conduct the aforementioned operations, along with their technical conditions and the mechanism followed to execute these operations.
2. The non-bank institution maintains a capital of not less than 50 billion Lebanese Lira at all times. If this institution incurs losses, it must reconstitute its capital within a maximum of six months under penalty of revoking the license granted to it to conduct its operations in Lebanon.
3. The non-bank institution commences its operations within a period of six months from the date of the license issuance, under penalty of revoking this license. This period may be extended for an additional six months due to exceptional or emergency circumstances, upon a reasoned request to be decided by the Central Council. If the institution ceases to conduct its operations for six consecutive months, the license granted to it shall be revoked.
4. These operations are executed instantly between clients.
5. All these operations are settled between the banks' accounts at Banque du Liban.
6. The total amount of funds sent from each client via a single application shall not exceed:
   • a) 15,000,000 LBP daily and 150,000,000 LBP monthly for operations conducted in Lebanese Lira.
   • b) $300 daily and $3,000 monthly, or their equivalent in other foreign currencies, for operations conducted in US Dollars or any of these foreign currencies approved by the Clearing House at Banque du Liban.
7. The total amount of funds received from each client via a single application shall not exceed:
   • a) 15,000,000 LBP daily and 150,000,000 LBP monthly for operations conducted in Lebanese Lira.
   • b) $600 daily and $6,000 monthly, or their equivalent in other foreign currencies, for operations conducted in US Dollars or any of these foreign currencies approved by the Clearing House at Banque du Liban.
     Banque du Liban may exceptionally approve a higher cap for the total amount received if the client receiving the funds is a legal entity (commercial, industrial, or a professional).
8. The fee charged for these operations shall not exceed 0.5% (half a percent) of the value of each operation.
9. All laws and regulations related to compliance and combating money laundering must be observed in these operations.
10. The Directorate of Payment Systems and the Directorate of Exchange at Banque du Liban shall be provided monthly with the number and value of these operations according to Form 0-IP attached to this Decision."

Article 3: The text of the third paragraph of Article 3 of Interim Decision No. 7548 dated 30/3/2000 is deleted and replaced with the following text:

"Third: Providers of banking or financial operations via mobile or fixed electronic devices through applications may include an 'Electronic Wallet' service in this application or software, subject to the following conditions:

1. Prior approval from Banque du Liban is obtained for any such application or software that will be used to conduct the aforementioned operations, along with their technical conditions and the mechanism followed to execute these operations.
2. The non-bank institution maintains a capital of not less than 50 billion Lebanese Lira at all times. If this institution incurs losses, it must reconstitute its capital within a maximum of six months under penalty of revoking the license granted to it to conduct its operations in Lebanon.
3. The non-bank institution commences its operations within a period of six months from the date of the license issuance, under penalty of revoking this license. This period may be extended for an additional six months due to exceptional or emergency circumstances, upon a reasoned request to be decided by the Central Council. If the institution ceases to conduct its operations for six consecutive months, the license granted to it shall be revoked.
4. The 'Electronic Wallet' must be linked to a mobile number registered under the name of the legal client.
5. These operations are executed instantly between clients.
6. The total value of 'Electronic Wallets' opened on the application or software must be deposited in a dedicated and independent bank account opened for this purpose under the name of the service provider.
7. The 'Electronic Wallet' service provider must verify the identity of each person benefiting from this service and the source of funds that will fund the 'Electronic Wallet'.
8. A cap must be set for the funds available in each 'Electronic Wallet', such that the total for a natural person at any time does not exceed 150,000,000 LBP or $3,000. If the client is a legal entity (commercial, industrial, or a professional), the cap on funds available in the wallet shall be 4 billion Lebanese Lira or $50,000.
9. The total amount of funds sent from each client via a single 'Electronic Wallet' shall not exceed:
   • a) 15,000,000 LBP daily and 150,000,000 LBP monthly for operations conducted in Lebanese Lira.
   • b) $300 daily and $3,000 monthly, or their equivalent in other foreign currencies, for operations conducted in US Dollars or any of these foreign currencies approved by the Clearing House at Banque du Liban.
10. The total amount of funds received from each client via a single 'Electronic Wallet' shall not exceed:

• a) 15,000,000 LBP daily and 150,000,000 LBP monthly for operations conducted in Lebanese Lira.
• b) $600 daily and $6,000 monthly, or their equivalent in other foreign currencies, for operations conducted in US Dollars or any of these foreign currencies approved by the Clearing House at Banque du Liban.
  Banque du Liban may exceptionally approve a higher cap for the total amount received if the client receiving the funds is a legal entity (commercial, industrial, or a professional).

11. The user must be enabled to fund the 'Electronic Wallet' in cash and/or by using cards and/or bank accounts and/or through another 'Electronic Wallet'.
12. The user must be granted the ability to transfer 'Electronic Wallet' funds to their bank account and/or withdraw them in cash.
13. The 'Electronic Wallet' user must be granted the ability to reject any incoming funds transaction and block any other counterparty entirely.
14. No conversion operation shall be conducted on the 'Electronic Wallet', such that all operations are conducted in the currency used to fund the 'Electronic Wallet'.
15. The fee charged by the 'Electronic Wallet' service provider shall not exceed 0.5% (half a percent) of the value of each operation conducted on the wallet.
16. A notification must be sent to the user immediately upon conducting any operation on the 'Electronic Wallet'.
17. All laws and regulations related to compliance and combating money laundering must be observed in these operations, particularly Article 9 bis of this Decision.
18. A Compliance Officer must be appointed, who must possess sufficient expertise in combating money laundering and terrorist financing, undergo continuous training courses in this field, and perform the tasks specified in Article 9 bis of this Decision.
19. Enhanced Due Diligence procedures must be applied to new customers (New Onboarding) benefiting from the 'Electronic Wallet' service.
20. The Directorate of Payment Systems and the Directorate of Exchange at Banque du Liban shall be provided monthly with the number and value of these operations according to Form 1-IP attached to this Decision, and with any additional document required to monitor this type of operation."

Article 4: The following text is added to Interim Decision No. 7548 dated 30/3/2000 as "Article 4 bis":

"Article 4 bis:
First: The institutions referred to in Article 2 of this Decision, each insofar as it concerns them, must obtain prior approval from Banque du Liban to identify their new customers (New Onboarding) among natural persons by relying on the 'Know Your Customer' form electronically (KYC-E) to open accounts not exceeding a value of $10,000 or to conduct banking and financial operations, provided that the Central Council may, for reasons it deems appropriate, approve a cap for these accounts exceeding the amount specified above. Second: Banque du Liban must be provided with documents related to the technologies, mechanisms, and electronic software that will be used for this purpose, and the approval request must include proof that the concerned institutions have done the following:

1. Comply with the laws and regulations in force, particularly those related to compliance and combating money laundering and terrorist financing, especially regarding:
   • a) Verifying and confirming the validity of the client's identity by:
     • Applying Enhanced Due Diligence procedures.
     • Relying on Digital ID Systems, including requirements related to Identity Proofing and Enrolment, and Identity Authentication Lifecycle Management, as specified in the FATF Guidance on Digital ID.
   • b) Ongoing Monitoring of electronic transactions continuously according to the standards specified in Interim Decision No. 7818 dated 18/5/2001 regarding the system for monitoring financial and banking operations to combat money laundering and terrorist financing (Basic Circular No. 83).
   • Adopting a mechanism to classify all clients based on their risk categories (high, medium, and low) and risk categories that may result from operation caps.
2. Ensure the availability of the conditions stipulated in the 'Fourth' paragraph of Article 21 of this Decision regarding electronic signatures.
3. Adopt appropriate security and compliance procedures that ensure the highest degrees of legal and technical protection, especially in light of client risks and the risks of the operation caps available to them.
   Third: The 'Know Your Customer' form may be adopted electronically (KYC-E) for renewal and/or modification of the 'Know Your Customer' form (KYC)."

Article 5: The text of paragraph (2) of "Article 5" of Interim Decision No. 7548 dated 30/3/2000 is deleted and replaced with the following:
"2- Its capital shall be fifty billion Lebanese Lira at least, for institutions that conduct external money transfer operations, which must be issued and paid in full, as any subsequent increase thereto is paid in full in a single lump sum at Banque du Liban."

Article 6: The text of paragraph (2) of "Article 6" of Interim Decision No. 7548 dated 30/3/2000 is deleted and replaced with the following:
"2- Its capital shall be fifty billion Lebanese Lira at least, which must be issued and paid in full, as any subsequent increase thereto is paid in full in a single lump sum at Banque du Liban."

Article 7: The text of paragraph (1) of "Article 7" of Interim Decision No. 7548 dated 30/3/2000 is deleted and replaced with the following:
"1- Fifty billion Lebanese Lira at least shall be allocated for its branch's operations in Lebanon, which must be issued and paid in full, as any subsequent increase thereto is paid in full in a single lump sum at Banque du Liban."

Article 8: The text of "Article 21" of Interim Decision No. 7548 dated 30/3/2000 is deleted and replaced with the following text:
"In addition to the general principles stated in "Article 20" of this Decision, compliance with the following is required:
First: The client must be at least eighteen years old and possess full legal capacity to contract.
Second: Subject to prevailing laws, no information regarding a client's account shall be provided except upon explicit, prior, and written consent from the concerned client.
Third: Electronic signatures shall not be accepted unless the following conditions are met collectively:

1. An explicit agreement between the concerned institution and the client:
   • a) Outlining the potential risks when resorting to electronic signatures.
   • b) Specifying the appropriate procedures to be followed, adhering to the highest security standards, under the full responsibility of the concerned parties.
2. Use of a personal identification code by the signatory.
   However, for retail transactions and electronic wallet operations, concerned institutions must adopt standard electronic signatures, provided the following conditions are met for their validity:
   • a) The electronic signature must be uniquely linked to the signatory and organized and preserved in a manner that ensures its validity and the integrity of the client's personal data.
   • b) It must be possible to identify the person who issued the electronic signature.
   • c) Electronic signature creation data systems must be used to create the electronic signature, enabling the signatory to use this signature with a high level of confidence and under their sole control.
   • d) The signature must be linked to the signed data in such a way that any subsequent change in the data is detectable.
3. The client must be notified immediately upon execution of the operation regarding its details via the application and/or email and/or SMS sent to their mobile phone.
4. The executing institution must electronically notify the client of a detailed monthly status when necessary.
   Fourth: The Banking Control Commission shall issue implementing texts specifying the technical and implementing procedures for adopting standard electronic signatures in retail transactions. Fifth: Data protection procedures must be applied, particularly:
5. The concerned institution must take measures that ensure the highest security standards to protect the personal data of its clients and the methods of processing, storing, and legally using it, as the data controller.
6. If the concerned institution contracts with any third party to process this data or to conduct any operation that may lead to its processing, it must do the following:
   • a) Inform the client that the processing of their personal data will be conducted by a third party, and obtain the client's explicit, written, and limited consent for specific purposes to process their personal information.
   • b) Include in the contract provisions stating:
     • That the processing of clients' personal data by the third party is limited to the purpose for which it was granted, and that it cannot be processed later in a manner inconsistent with the stated and explicit purposes in the contract, and that the processing must be conducted honestly and in accordance with the legitimate and necessary objectives for which it was granted.
     • Obliging the third party to adopt the highest security standards to ensure the protection, storage, and security of data and prevent its distortion, damage, or access by unauthorized persons.
     • That the institution remains responsible towards the client for protecting personal data and the legality of its use by the third party, and for any misuse by the latter."

Article 9: The following text is added to Interim Decision No. 7548 dated 30/3/2000 as "Article 23 bis":
"Article 23 bis: The Banking Control Commission shall undertake the task of monitoring the proper implementation of the provisions of this Decision."

Article 10: The text of Forms 0-IP and 1-IP attached to Interim Decision No. 7548 dated 30/3/2000 is deleted and replaced with the two forms attached to this Decision.

Article 11: Non-bank institutions conducting banking and financial operations via electronic means established before the issuance of this Decision are granted a maximum deadline of September 30, 2023 to submit capital increase requests, provided that these procedures are completed so that they become effective by a maximum deadline of March 31, 2023.

Article 12: This Decision shall take effect upon its issuance.

Article 13: This Decision shall be published in the Official Gazette.

Beirut, April 13, 2023
Governor of Banque du Liban

Riad T. Salamah

Form No. 0-IP

Bank / Institution Name __________________________________ Number of individuals using the service ________________________________ Number of merchants or professionals using the service __________________ Currency: LBP Currency: USD Date: _________________________________ Signature: ____________________ To be sent to the following addresses:

• mbounassar@bdl.gov.lb
• MElhassanieh@bdl.gov.lb
• apakradounian@bdl.gov.lb
• thaddad@bdl.gov.lb
• ltalhouk@bdl.gov.lb

Month / Volume of Transactions	Value of Transactions
	Person to Person	Person to Merchants or Professionals	Total

Month / Volume of Transactions	Value of Transactions
	Person to Person	Person to Merchants or Professionals	Total

Form No. 1-IP

Institution Name:
Number of e-wallets:
Currency: LBP

Month/ Year	Number of operations	Value of Operations	Outstanding Balance
	IN	OUT	IN	OUT	IN	OUT
From an account	Cash	To an account	Cash	From an account	Cash	To an account	Cash
Total

Currency: USD

Month/ Year	Number of operations	Value of Operations	Outstanding Balance
	IN	OUT	IN	OUT	IN	OUT
From an account	Cash	To an account	Cash	From an account	Cash	To an account	Cash
Total

Date:
Signature:
To be sent to the following addresses:

• mbounassar@bdl.gov.lb
• MElhassanieh@bdl.gov.lb
• apakradounian@bdl.gov.lb
• thaddad@bdl.gov.lb
• ltalhouk@bdl.gov.lb