Exceptional Measures for the Gradual Repayment of Foreign Currency Deposits

Basic Decision No. 13335

Exceptional Measures for the Gradual Repayment of Foreign Currency Deposits

The Governor of Banque du Liban,
Pursuant to the Monetary and Banking Law, particularly Articles 70 and 174 thereof, Pursuant to Basic Decision No. 7926 dated September 20, 2001, and its amendments regarding banks’ mandatory reserves, In light of the public interest under the current exceptional circumstances facing the country, And based on the resolution adopted by the Central Council of Banque du Liban in its session held on June 4, 2021, Has decided the following:

Article One: Every bank operating in Lebanon shall take necessary measures to ensure the gradual repayment of foreign currency deposits held in accounts opened before October 31, 2019, according to the conditions and mechanism specified below.

Article Two: First: To benefit from the provisions of this Decision, any natural person account holder, adult or minor, resident or non-resident (hereinafter "Account Holder"), shall rely on the total balance of all their foreign currency credit accounts, including related accounts in which they participate or benefit (such as joint or union accounts), opened before October 31, 2019, at any bank individually, subject to the following:

• These balances are calculated as frozen as of June 30, 2021, provided the amount remains available at the time of benefiting from this Decision and does not exceed the balance available as of October 31, 2019.

• The following are excluded:

  • Foreign currency account balances pledged as cash collateral and margin for loans and banking facilities, including contingent liabilities.
  • Balances of "New Funds" accounts according to the concept of Basic Decision No. 13217 dated April 9, 2020 (Basic Circular No. 150).
  • Amounts transferred from Lebanese Lira to foreign currencies after October 31, 2019.

• The following are deducted, exclusively:

  • Value of foreign currency cash withdrawals (Banknotes) and remittances abroad, including for students and local transfers executed via foreign correspondents, and amounts used abroad via bank cards, after October 31, 2019 and excluding "New Funds" as per Basic Decision No. 13217 dated April 9, 2020 (Basic Circular No. 150).
  • Value of the Account Holder’s foreign currency debit accounts at the concerned bank that have been or are being repaid in Lebanese Lira based on Article 7776 dated February 21, 2001 (Basic Circular No. 81, amended by Intermediate Circular No. 568), up to June 30, 2022 or until full repayment of these debit accounts, whichever is earlier.

• The Account Holder benefits from this Decision for accounts considered a continuation of those opened with the same bank before October 31, 2019, particularly regarding account movements and deductions applied per this Decision. (This includes, for example, a joint account becoming individual, an individual account becoming joint, an account transferred to heirs or legatees, or a frozen account becoming current...).
  To apply this clause (d), only the primary Account Holder from whom those amounts were transferred benefits. In case of death, heirs or legatees benefit up to the limits specified in Article Four, first clause.

• The Account Holder benefits from this Decision for:

  • Accounts opened before October 31, 2019, upon maturity.
  • Cash collateral provided before October 31, 2019, upon release.
    Second: Any Account Holder who is among the persons specified in Article Two of Basic Decision No. 13262 dated August 27, 2020 (Basic Circular No. 154) and has not completed the required ratio does not benefit from this Decision, provided this does not affect the bank’s obligation to encourage clients to complete the required ratios of funds transferred abroad.

Third: The Account Holder does not benefit from Basic Decision No. 13611 dated February 2, 2024 (Basic Circular No. 166) for any of their accounts, individually or jointly/union, at any bank, throughout the duration they benefit from this Decision.
If one partner in a joint account benefits from this Decision, the other partner cannot benefit from Basic Decision No. 13611 dated February 2, 2024 (Basic Circular No. 166) for that joint account but may benefit from it for other accounts if not simultaneously benefiting from this Decision. Fourth: As an exception to the first clause of this Article, the following benefit from this Decision:

• Individual enterprises.
• Licensed associations by competent authorities.

Article Two (Repeated): First: Contrary to the opening of the first clause of Article Two above, and without affecting other conditions not conflicting with this Article, the Account Holder benefits from this Decision for accounts existing at any bank (hereinafter "Transferring Bank") in foreign currencies before October 31, 2019, and transferred after this date to another bank (hereinafter "Transferee Bank"), provided the amounts eligible under this Decision are returned to the "Transferring Bank". This includes accounts that were joint at the Transferring Bank and became individual at the Transferee Bank, or individual at the Transferring Bank and became joint at the Transferee Bank.

Second: To apply this Article:

• Only the primary Account Holder from whom amounts were transferred benefits, provided the account to which they transferred is in their name (individual or joint). In case of death, heirs/legatees benefit up to the limits in Article Four, first clause.

• The Account Holder must:

  • Lift banking secrecy for their account at the Transferee Bank in favor of Banque du Liban and the Banking Control Commission, according to attached forms (BDL-BDR-02-MP for legal entities and BDL-BDR-02-PP for natural persons, except as specified in Article Two, fourth clause) to verify correct application of this Article, plus lifting secrecy per the sixth clause of Article Three.
  • Obtain from the Transferee Bank a certificate confirming that the amount to be returned belongs to the "Account Holder" from the "Transferring Bank" and is subject to this Decision.

• The Transferee Bank must calculate the amount eligible for benefit by adopting the account balance as frozen as of October 31, 2023, provided it remains available at the time of benefit and does not exceed the balance available upon opening the account at the Transferee Bank, after applying clauses (b) and (c) of Article Two, first clause, excluding amounts not originating from the Account Holder’s account at the Transferring Bank.

• The Account Holder must request the Transferring Bank, after providing the certificate mentioned in clause (2), to reopen an account designated to receive the amount eligible under this Decision. The bank must comply unless compliance rules, judicial disputes, or missing information in the certificate apply, under penalty of sanctions. The amount transferred to the Transferring Bank must not exceed USD 50,000.

• If the account at the Transferring Bank remains open, the Account Holder may, after providing the certificate in clause (2), request replenishment from the open account at the Transferee Bank, provided the total amount returned plus the eligible amount does not exceed USD 50,000.

• The bank receiving the returned amounts must calculate the eligible amount per clauses (b) and (c) of Article Two, first clause, not exceeding the balance available as of October 31, 2019.
  Third: The Account Holder benefits retroactively from the date of submitting a complete request until the opening of the "Special Sub-Account", with all amounts due for this period paid on the first payment date, provided they did not benefit from Basic Decision No. 13221 dated April 21, 2020 (Basic Circular No. 151) during this period.

Article Three: First: Banks shall, upon issuance of this Decision, identify clients meeting the specified conditions and notify them.
Second: If the Account Holder wishes to benefit, they must request the concerned bank to open a "Special Sub-Account" (Account Sub Special), which must comply under penalty of sanctions.
Third: An amount equivalent to USD 50,000 or less shall be transferred to this account according to available balances in USD or other foreign currencies.
However, the Account Holder may request a transfer of USD 10,000 to the "Special Sub-Account" to benefit for one year. Upon expiration, contrary to clause (2) of the fifth clause, they may freely request additional transfers up to the maximum limit above to continue benefiting until the decision's application period ends. The total amount an Account Holder can benefit from all banks under this Decision must not exceed USD 50,000. Fourth: If an Account Holder has multiple accounts at one bank, they must specify the account(s) to be transferred to the "Special Sub-Account". For joint/union accounts, benefit is limited to USD 50,000 or equivalent. Joint account holders agree on each person's benefit ratio; if one opts out, remaining parties may utilize the maximum limit. If a joint Account Holder has an individual account and opts for it, their partner may benefit from the joint account. Fifth: The "Special Sub-Account" is subject to the following characteristics and conditions:

• No commissions or fees of any kind are charged on it or related accounts, ensuring the client receives full amounts without deductions.
• The "Special Sub-Account" is non-interest-bearing.
• Withdrawals are made per the conditions in Article Four.

Sixth: To benefit, the Account Holder must exclusively lift banking secrecy for "Special Sub-Accounts" (not all their accounts) solely in favor of Banque du Liban and the Banking Control Commission, according to attached forms (PP-01-BDR-BDL for natural persons and MP-01-BDR-BDL for legal entities per Article Two, fourth clause). Seventh: Banks are prohibited from imposing any obligations, conditions, commitments, or procedures not specified in this Decision in contracts signed with clients benefiting from it, or in any declaration/commitment/document signed by these clients. Eighth: The Account Holder (or their authorized representative) is granted a deadline until October 31, 2021, to request opening the "Special Sub-Account" to benefit from this Decision, with retroactive effect from July 1, 2021, until the account opening date. All amounts due for this period are paid on the first payment date for months where the Account Holder did not benefit from Basic Decision No. 13221 dated April 21, 2020 (Basic Circular No. 151). In all cases, at any date after October 31, 2021 and within the decision's validity period, the Account Holder (or representative) benefits from its provisions starting the month of "Special Sub-Account" opening, provided they did not benefit during that month from Basic Decision No. 13221 dated April 21, 2020 (Basic Circular No. 151).

Article Four: First: Withdrawals from opened "Special Sub-Accounts" are made as follows:

• USD 1,000 monthly, without direct or indirect commissions/fees of any kind on this operation. The total annual withdrawal from all banks in USD must not exceed USD 12,000, paid as follows:
  • USD 800 to the Account Holder in cash (Banknotes) and/or via remittance abroad and/or via bank cards usable in Lebanon/abroad and/or deposited into a new account (Account Fresh).
  • USD 200 via bank cards used exclusively at Point of Sale (POS) terminals, adjustable by Banque du Liban per its monetary policy.
• The annual withdrawal cap from all banks during the current cycle ending June 30, 2026, is adjusted to USD 11,000.
• If two or more persons benefit from joint/union accounts per this Decision, the amounts specified in clause (1) (including POS payments) are paid proportionally (Prorata) according to each person's share of amounts transferred to "Special Sub-Accounts" from these joint/union accounts.
• Exceptionally, two payments are made during October 2024 and one payment each during November 2024, December 2024, and January 2025, in addition to monthly payments, under the following mechanism:
  a) This clause applies to persons who submitted requests to lift banking secrecy before September 25, 2024 (for two extra payments in October 2024), before November 1, 2024 (for one extra payment in November 2024), before November 26, 2024 (for one extra payment in December 2024), and before December 24, 2024 (for one extra payment in January 2025). b) The Account Holder, if their "Special Sub-Account" lacks sufficient funds to benefit from clause (4), may request increasing the account balance with additional amounts within the cap eligible under this Decision until its application period ends, with remaining extra payments paid upon availability. c) Extra payments are declared to the "Central Service for Special Sub-Accounts" in the month of actual payment. d) Liquidity is secured to fully cover extra payments from banks' foreign currency mandatory reserves held at Banque du Liban, which the latter issues for this purpose.

Second: The Account Holder may withdraw the specified amounts fully or partially at any time. If the monthly allowed limit is not withdrawn, unwithdrawn amounts accumulate to subsequent months, remain in their account, and become a fixed right withdrawable at any time.
Third: The Account Holder may fully or partially withdraw amounts deposited in the "Special Sub-Account" via checks or transfers to another account within Lebanon at their own bank or another bank.
Fourth: Banks must monthly provide the "Central Service for Special Sub-Accounts" (mentioned in Article Seven) with balances of these accounts opened at their branches and amounts withdrawn during the month. This Central Service is responsible for verifying misuse, particularly exceeding the withdrawal cap, and notifying the Governor to take necessary action and suspend the Account Holder's benefit from this Decision and Basic Decision No. 13221 dated April 21, 2020 (Basic Circular No. 151). Suspension of benefit occurs:

• During the remaining "Annual Cycle" (July 1 to June 30 of each year) upon reaching the annual withdrawal cap.
• Throughout any excess, up to the end of the current Annual Cycle at all banks where the Account Holder benefits, plus subsequent months at the bank where excess occurred equal to the number of months of excess.
• If simultaneously benefiting from this Decision and Basic Decision No. 13611 dated February 2, 2024 (Basic Circular No. 166) at any bank until status is settled.
  Fifth: Banks may not withhold monthly amounts due to each Account Holder per this Article unless requested by Banque du Liban per clause (4).

Article Five: Liquidity is secured to meet this Decision's requirements:

• For beneficiaries prior to July 1, 2023:
  a) The portion of the monthly payment not exceeding USD 400 is shared equally between the concerned bank's liquidity at foreign correspondents and the banks' foreign currency mandatory reserves held at Banque du Liban, issued for this purpose. b) The portion exceeding USD 400 is entirely from the banks' foreign currency mandatory reserves held at Banque du Liban, issued for this purpose.
• For clients who did not benefit before July 1, 2023:
  a) The portion of the monthly payment not exceeding USD 300 is shared equally between the concerned bank's liquidity at foreign correspondents and the banks' foreign currency mandatory reserves held at Banque du Liban, issued for this purpose. b) The portion exceeding USD 300 is entirely from the banks' foreign currency mandatory reserves held at Banque du Liban, issued for this purpose. The "Central Service for Special Sub-Accounts" declares the portion of payments funded equally separately from the portion fully funded by mandatory reserves. Banque du Liban transfers monthly to each compliant bank the amounts due from its available foreign liquidity, under penalty of holding the concerned bank responsible if used for purposes other than specified.

Article Six: First: Banks may, to secure required liquidity per this Decision, use foreign liquidity available within the 3% ratio specified in Basic Decision No. 13262 dated August 27, 2020 (Basic Circular No. 154), provided this ratio is replenished by December 31, 2026. Second: Banks are prohibited from using for repayment per this Decision:

• New accounts (Accounts Fresh) opened per Basic Decision No. 13217 dated April 9, 2020 (Basic Circular No. 150, amended by Intermediate Circular No. 554).
• Funds returned per Article Two of Basic Decision No. 13262 dated August 27, 2020 (Basic Circular No. 154).

Article Seven: A "Central Service for Special Sub-Accounts" is established within the Banking Department at Banque du Liban, with its role limited to:

• Monitoring application of this Decision.
• Providing the Governor with monthly reports containing balances of "Special Sub-Accounts" at each bank, amounts withdrawn during the month, and any application excesses.

Article Eight: Non-compliance by any bank with this Decision requires it to return foreign currency liquidity used from Banque du Liban to the latter's account at foreign correspondents, and exposes it to sanctions under Article 208 of the Monetary and Banking Law.

Article Nine: Supervisory commissioners for concerned banks must verify correct implementation of this Decision and report any violations to the Governor and Chairman of the Banking Control Commission.

Article Ten: The unit responsible for implementing "Policy on Conduct of Banking and Financial Operations with Clients" (established by Basic Decision No. 11947 dated February 12, 2015, Basic Circular No. 134) receives and processes any complaint from an Account Holder regarding this Decision's implementation, rules on it, notifies the decision to the Account Holder, and periodically declares complaints to the Banking Control Commission.

Article Eleven: This Decision takes effect upon issuance, and its conditions apply until June 30, 2026.