Exceptional exemptions from banks required investments

Circular No. 554

For Banks

We enclose a copy of Mediation Decision No. 13221 dated 11/5/2020 concerning the amendment of Mediation Decision No. 13217 dated 9/4/2020 regarding exceptional exemptions from mandatory reserves and mandatory bank investments attached to Circular No. 150.

Beirut, May 11, 2020

Governor of the Central Bank of Lebanon

Riad T. Salamah

Mediation Decision No. 13221

Amendment of Mediation Decision No. 13217 dated 9/4/2020 (Exceptional exemptions from mandatory reserves and mandatory bank investments)

The Governor of the Central Bank of Lebanon,

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

Pursuant to Mediation Decision No. 13217 dated 9/4/2020 regarding exceptional exemptions from mandatory reserves and mandatory bank investments,

Pursuant to the powers vested in the Governor to ensure the operation of the Central Bank of Lebanon based on the principle of continuity of the public service,

Decides as follows:

Article One: The title of Mediation Decision No. 13217 dated 9/4/2020 is repealed and replaced with the following: "Exceptional exemptions from mandatory bank investments."

Article Two: The text of Article One of Mediation Decision No. 13217 dated 9/4/2020 is repealed and replaced with the following text: "Banks operating in Lebanon are exempted from making mandatory investments with the Central Bank of Lebanon against funds transferred from abroad and/or funds received in cash in foreign currency after 9/4/2020 (hereinafter 'funds'), provided that the conditions specified in Article Two below are met."

Article Three: The text of Article Three of Mediation Decision No. 13217 dated 9/4/2020 is repealed and replaced with the following text: "The exemptions mentioned in Article One and the conditions imposed in Article Two remain in force even in the event that the owner of the 'funds' requests their conversion, in whole or in part, to any other foreign currency or their transfer from the receiving bank to any other bank operating in Lebanon, so that this latter bank benefits from the exemptions instead of the transferring bank. In the context of applying this Article, the transfer must be made through the foreign correspondent bank."

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

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

Beirut, May 11, 2020

Governor of the Central Bank of Lebanon

Riad T. Salamah