Facilities that may be granted by BDL to banks and financial institutions

Intermediary Circular No. 535

To Banks and Financial Institutions

We enclose for your reference Intermediary Circular No. 13152 dated 26/11/2019 concerning the amendment of Decision No. 6116 dated 7/3/1996 (Facilities that may be granted by Banque du Liban to Banks and Financial Institutions) attached to Fundamental Circular No. 23.

Beirut, on 26 November 2019

Governor of Banque du Liban

Riad T. Safra

Intermediary Decision No. 13152

Amendment of Fundamental Decision No. 6116 dated 7/3/1996

The Governor of Banque du Liban,

Pursuant to the Monetary and Loan Law, particularly Article 70 thereof,

And pursuant to Fundamental Decision No. 6116 dated 7/3/1996 and its amendments concerning the facilities that Banque du Liban may grant to Banks and Financial Institutions,

And pursuant to the powers vested in the Governor to ensure the operation of Banque du Liban in accordance with the principle of continuity of the public service,

Decides as follows:

Article 1: The numbering of "Article Fourteen", "Article Fifteen", and "Article Sixteen" of Fundamental Decision No. 6116 dated 7/3/1996 is amended so that they become respectively "Article Fifteen", "Article Sixteen", and "Article Seventeen".

Article 2: "Article Fourteen-A" is added to Fundamental Decision No. 6116 dated 7/3/1996 with the following text:

« Article Fourteen-A: 1- Banks may request Banque du Liban to carry out exchange operations to cover:

• A percentage of 85% of the value of invoices exclusively intended for the import of medicines in foreign currency.

• B percentage of 50% of the value of invoices exclusively intended for the import of medical supplies in foreign currency.

• C percentage of 75% of the value of invoices exclusively intended for the import of medical materials used in the manufacture of medicines in foreign currency,

within a maximum limit determined by Banque du Liban, on a discretionary basis, for the sector as a whole and for each importer individually, based on the average volume of import of these materials during the last three years.

2- In order to benefit from the provisions of paragraph (1) of this Article, Banks must comply with the following:

• A that they submit to Banque du Liban a copy of the documents related to each import operation, namely a copy of the invoice certified by the Ministry of Health and a copy of the transfer order according to Model No. 103 related to this invoice.

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• B that they ensure, under their full responsibility, that the invoices covered by this request are exclusively intended to cover the import of the goods mentioned above for local consumption purposes according to the needs of the Lebanese market.

• C that they pay to Banque du Liban a commission of 0.5% for each operation.

3- The requests of Banks subject to this Article are submitted to the Exchange and Foreign Operations Directorate at Banque du Liban.

4- Banks must ensure, under their responsibility, the proper application of the conditions stipulated in this Article and the purpose for which it was established, under penalty of Banque du Liban taking the measures it deems appropriate, particularly obliging the non-compliant bank to deposit a special reserve without interest at Banque du Liban, equivalent in value to the amounts mentioned in paragraph (1) above. ».

Article 3: This Decision shall enter into force upon its issuance.

Article 4: This Decision shall be published in the Official Gazette.

Beirut, on 26 November 2019

Governor of Banque du Liban

Riad T. Safra