System of the Central Office of Credit Risk

Decision No. 7705

System of the Central Office of Credit Risk

The Governor of the Central Bank of Lebanon,
Pursuant to the Monetary and Loan Law, particularly Articles 147 and 179 thereof, Pursuant to Article 3 of the Law implemented by Decree No. 5439 dated September 20, 1982, Pursuant to the decision of the Central Council taken during its session held on October 25, 2000,

Decides as follows:

Article 1: The System of the Central Office of Credit Risk attached to this Decision is hereby implemented.

Article 2: Any person violating the provisions of this Decision and its attached System shall be subject to administrative penalties and late fees as stipulated in the applicable laws and regulations.

Article 3: The Information Technology Directorate of the Central Bank of Lebanon shall prepare the necessary software programs to apply the aforementioned System, distribute them to banks and financial institutions, and provide the necessary training for proper use and application.

Article 4: Decision No. 7461 dated November 23, 1999 and its attached System, subject of Circular for Banks and Financial Institutions No. 1775 dated November 3, 1999, and Decision No. 7542 dated March 7, 2000, subject of Circular for Banks and Financial Institutions No. 1805 dated March 7, 2000, are hereby repealed.

Article 5: This Decision shall take effect starting from January 31, 2001.

Article 6: This Decision shall be published in the Official Gazette.

Beirut, October 26, 2000
Governor of the Central Bank of Lebanon
Riad T. Salamé

Central Bank of Lebanon

System of the Central Office of Credit Risk

Version 2.0 - October 2000

Table of Contents

First: Subscription to the Central Office of Credit Risk Second: Identification Cards A. Instructions regarding Identification Cards B. Clarifications regarding the Individual Identification Card: Form No. I-CDR
C. Clarifications regarding the Corporate Identification Card: Form No. S-CDR
D. Clarifications regarding Loan Portfolios
Third: Declaration of Obligations
A. Direct Obligations
B. Guarantees
C. Indirect Obligations
D. Memorandum Accounts
E. Instructions and Clarifications
Fourth: Inquiries
A. Inquiry Request
B. Inquiry Response
Fifth: Appendices
A. Declaration Data to the Central Risk Office in Arabic: 1CDR, 2CDR B. Declaration Data to the Central Risk Office in French: 1CDR, 2CDR
C. Identification Cards: CDRS, CDRI
D. Inquiry and Inquiry Request Responses: CDR-D1, CDR-R0, CDR-D2, CDR-R1, CDR-R2, CDR-R3 E. Economic Sector Classification: 01ECO F. Country Codes: 01NAT G. Loan Type Codes: 01CTC H. Customer Classification Table according to the Economic Activity Sectoral Classification Structure: 02ECO
I. Currency Codes: 01DEV
J. Loan Usage Area Codes: 01REG

First: Subscription to the Central Office of Credit Risk

Article 1:
All banks and financial institutions registered by assets shall automatically subscribe to the Central Office of Credit Risk established at the Central Bank of Lebanon.

Article 2:
Each subscriber must submit to the aforementioned Office, at the beginning of each month, a magnetic diskette containing a statement of credits granted to its clients in Lebanese Lira, and credits granted in foreign currencies equivalent to Lebanese Lira, along with the utilization of each as of the end of the previous month, in one of the formats listed in the attached declaration form (Form No. 1/2 1CDR and 2/2 1CDR) or via any electronic means with security features.

Article 3:
The provisions of Article 2 of Section "First" of this System shall only apply when the total credits granted by a single subscriber to a single person exceed 20,000,000 L.L. (Twenty Million Lebanese Lira) or its equivalent in foreign currencies, effective from the November 2025 position.

Article 4:
The data contained in the magnetic diskettes submitted by banks and financial institutions to the Office shall be strictly confidential and shall only be used to inform banks and financial institutions that request it regarding the total credits granted to each client, granting the bank the right to view its risks, and, if necessary, to inform the client personally.

Article 5:
The Office's expenses shall be distributed among subscribers according to a schedule prepared by the Office, in accordance with principles approved by the Central Council of the Central Bank of Lebanon after consulting the Association of Lebanese Banks.

Article 6:
Financial leasing companies operating in Lebanon shall declare to the Central Office of Credit Risk the facilities they grant to their clients, in accordance with the provisions of Articles 2 and 3 of this Section of the System. For this purpose, the provisions, instructions, and clarifications stipulated in this System regarding identification cards and declaration of obligations shall apply to financial leasing companies insofar as they concern them.

Second: Identification Cards

A. Instructions regarding Identification Cards

To achieve uniformity in the declaration of bank and financial institution clients listed on the periodic Central Risk Office register, banks and financial institutions must:

1. Prepare an identification card for each beneficiary whose name appears in the data submitted to the Central Risk Office. There are two types of cards: an 'Individual' identification card and a 'Corporate' identification card, according to the attached forms (No. I-CDR and S-CDR).

2. Prepare identification cards for newly declared clients completely and without omission, and submit them with the monthly data sent to the Central Risk Office, noting the mandatory attachment of a copy of the ID card, civil status extract, or passport for individuals, and a copy of the commercial publication, registration certificate, stating the company's legal form and partners' names for corporate entities.

3. Prepare new cards to replace old ones whenever there is a modification in client-related information.

4. Print the information on identification cards using a typewriter or printer in Latin letters.

B. Clarifications regarding the Individual Identification Card: Form No. I-CDR

1. Beneficiary Name and Surname: Must match exactly the name and surname recorded in the civil status extract, ID card, or passport. Note the necessity of including the maiden surname. Titles such as 'Mr., Sheikh, Doctor, Professor, Mrs., Miss, Prince, Princess, Pasha, Known as...' must be entered in the 'Additional Information' field.

2. Civil Status Register: Copy information from the ID card, e.g., - Baachoura 234 - Aley 35/1142 - Damour 73.

3. Nationality: Declare nationality and its code according to the attached table (Form 01NAT).

4. Residence: Determine residence (resident/non-resident) according to regulatory texts issued or to be issued by the Central Bank of Lebanon on this matter.

5. Legal Form: Declare the legal form as follows:
   | Code | Legal Form | French |
   |------|------------|--------|
   | Indeterminé | Undetermined | غير محدد |
   | Entreprise individuelle ou entreprise commerciale | Individual or Commercial Enterprise | مؤسسة فردية او مؤسسة تجارية |

5') Determine the client's credit portfolio according to the following distribution:

Code	Credit Portfolio	French	Arabic
1	Retail Credits	Crédits aux particuliers	قروض التجزئة
2	SME Credits	Crédits aux PME	قروض المؤسسات الصغيرة والمتوسطة الحجم
3	Corporate Credits	Crédits aux grandes entreprises	قروض الشركات

6. Client Classification: Classify the client according to the nature of their work based on the 'Customer and Client Classification according to the Economic Activity Sectoral Classification Structure' (02ECO) attached.

7. Legal Status: Declare the client's legal status according to the table below. These declarations are kept by the Central Risk Office detailed by banks. Upon modification or new information, these are added to previous information without cancellation.
   | Code | Legal Status | French | Arabic |
   |------|--------------|--------|--------|
   | 000 | Unknown | Inconnu | غير معروف |
   | 001 | None | Néant | لا شئ |
   | 002 | Protested | A été protesté | اجريت معاملة احتجاج ضده |
   | 004 | Legal proceedings for bankruptcy initiated | A été poursuivi en faillite | افلاسية دعوى عليه اقيمت |
   | 008 | Declared bankrupt | A été declaré en faillite | افلاسه اعلن |
   | 016 | Preventive settlement | A passé un concordat préventif | واق صلحا عقد |
   | 032 | Simple settlement | A passé un concordat simple | بسيطا صلحا عقد |
   | 064 | Legal proceedings for debt collection | A été poursuivi en justice pour le recouvrement de dette | لوحق امام القضاء تحصيلا لدين |

Note: In case of multiple applicable legal statuses, use the sum of the code numbers, e.g.:
Protested and declared bankrupt (002 + 008 = 010) -> 010

8. [Deleted]

9. Trade Name: Name of the trader conducting business, and if applicable, nickname and alias.

10. Additional Information: To record additional information held by banks and financial institutions, e.g., free management...

C. Clarifications regarding the Corporate Identification Card: Form No. S-CDR

1. Company Name: Declare the institution/company name as stated in the registration certificate in the Trade Register.

2. Establishment Date: State the establishment date as per the Trade Register certificate.

3. Nationality: Declare nationality and code according to the attached table (Form NAT01).

4. Residence: Determine residence (resident/non-resident) according to regulatory texts issued or to be issued by the Central Bank of Lebanon.

5. Trade Register: Copy the register number and location from the Trade Register certificate and determine the register location code as follows:
   | Code | Register Location | French | Arabic |
   |------|-------------------|--------|--------|
   | 01 | Beirut | Beyrouth | بيروت |
   | 02 | Mount Lebanon/Baabda | Liban Mont/Baabda | بعبدا/جبل لبنان |
   | 03 | Metn/Jdeidet-El-Metn/Metn | Jdeidet-El-Metn/Metn | المتن/المتن جديدة |
   | 04 | Bekaa/Zahlé | Bekaa/Zahlé | زحلة/البقاع |
   | 05 | North Lebanon/Tripoli | Nord Liban/Tripoli | طرابلس/لبنان الشمالي |
   | 06 | South Lebanon/Saida | Sud Liban/Saida | صيدا/لبنان الجنوبي |
   | 07 | Jounieh | Jounieh | جونية |
   | 08 | Outside Lebanon | Liban Hors | خارج لبنان |

6. Legal Form: Declare the company's legal form as follows:
   | Code | Legal Form | French | Arabic |
   |------|------------|--------|--------|
   | 20 | Undetermined | Indeterminé | غير محدد |
   | 22 | De facto company | Societé de fait | واقعية شركة |
   | 23 | Simple partnership | Societé en commandite simple | بسيطة توصية شركة |
   | 24 | Limited partnership by shares | Societé en commandite par actions | بالاسهم توصية شركة |
   | 25 | Limited liability company | Société à responsabilité limitée | المسؤولية محدودة شركة |
   | 26 | Anonymous company | Societé anonyme | شركة مغفلة |
   | 28 | General partnership | Societé en nom collectif | تضامن شركة |
   | 29 | Participation company | Societé en participation | محاصة شركة |
   | 30 | Public establishment | Etablissement public | مؤسسة عامة |
   | 31 | Cooperative | Cooperative | تعاونية |
   | 32 | Association | Association | جمعية |
   | 33 | Civil company | Societé civile | شركة مدنية |
   | 46 | Collective investment scheme (Company + Fund) | Organisme de placement collectif (Societé + Caisse) | هيئة استثمار جماعي (شركة + صندوق) |
   | 63 | Municipality | Municipalité | بلدية |
   | 82 | Syndicate | Syndicat | نقابة |
   | 87 | Waqf | wakef | وقف |

7. Client Classification: Classify according to the nature of work using the 'Customer and Client Classification according to the Economic Activity Sectoral Classification Structure' (02ECO) attached.

7') Determine the client's credit portfolio according to the following distribution:

Code	Credit Portfolio	French	Arabic
1	Retail Credits	Crédits aux particuliers	قروض التجزئة
2	SME Credits	Crédits aux PME	قروض المؤسسات الصغيرة والمتوسطة الحجم
3	Corporate Credits	Crédits aux grandes entreprises	قروض الشركات
4	Public Sector Entity Credits	Crédits aux entreprises du secteur public	قروض مؤسسات القطاع العام

8. Legal Status: Declare according to the table below. Added to previous info without cancellation.
   | Code | Legal Status | French | Arabic |
   |------|--------------|--------|--------|
   | 000 | Unknown | Inconnu | غير معروف |
   | 001 | None | Néant | لا شئ |
   | 002 | Protested | A été protesté | اجريت معاملة احتجاج ضده |
   | 004 | Legal proceedings for bankruptcy initiated | A été poursuivi en faillite | افلاسية دعوى عليه اقيمت |
   | 008 | Declared bankrupt | A été declaré en faillite | افلاسه اعلن |
   | 016 | Preventive settlement | A passé un concordat préventif | واق صلحا عقد |
   | 032 | Simple settlement | A passé un concordat simple | بسيطا صلحا عقد |
   | 064 | Legal proceedings for debt collection | A été poursuivi en justice pour le recouvrement de dette | لوحق امام القضاء تحصيلا لدين |

Note: Sum codes for multiple statuses, e.g., Protested and declared bankrupt (002 + 008 = 010) -> 010

9. [Deleted]

10. Trade Name: Name of the trader conducting business, and if applicable, nickname and alias.

11. Board Members: Declare names of the Chairman, Board of Directors members, Manager, Authorized Partner, or Partners according to the company's legal form per the table below. Attach an identification card for each person named in the table, plus cards for partners/shareholders owning more than 20% of shares.
    | Legal Form | Declare Names | Code |
    |------------|---------------|------|
    | Undetermined | Cf. Financial Regulation | 20 |
    | Partners | Les associés | 22 |
    | Authorized Partner | Le commandité | 23 |
    | Authorized Partner | Le commandité | 24 |
    | Partners + Manager | Les associés + le directeur | 25 |
    | Chairman & Board Members | Le président et les membres du conseil d'administration | 26 |
    | All Partners | Tous les associés | 28 |
    | Two Partners | Les deux associés | 29 |
    | General Manager | Directeur Général | 30 |
    | Authorized Signatory + Treasurer | Le fondé de pouvoir + Le trésorier | 31 |
    | Authorized Signatory + Treasurer | Le fondé de pouvoir + Le trésorier | 32 |
    | Authorized Partner | Le commandité | 33 |
    | Chairman & Board Members of CPM management company | Le président et les membres du conseil d'administration de la société de gestion de l'organisme de placement collectif | 46 |
    | Mayor | Le président de la municipalité | 63 |
    | Syndicate Representative | Le représentant du syndicat | 82 |

Role Code: Determine the role of named persons as follows:

Code	Role	French	Arabic
01	Partner	Associé	شريك
02	Authorized Partner	Commandité	شريك مفوض
03	Shareholder	Actionnaire	مساهم
04	Chairman - General Manager	Président - Directeur général	رئيس مجلس ادارة - المدير العام
05	Board Member	Membre du conseil d'administration	عضو مجلس ادارة
06	Manager	Directeur	مدير
07	Authorized Signatory	Fondé de pouvoir	مفوض بالتوقيع
08	Treasurer	Trésorier	امين الصندوق
09	Syndicate Representative	Représentant du syndicat	ممثل النقابة
10	CPM Director	Directeur de l'organisme de placement collectif	مدير هيئة الاستثمار الجماعي
11	Mayor	Président de la municipalité	رئيس البلدية

Note: Only report shareholdings exceeding 20%.

12. Additional Information: To record additional information held by banks and financial institutions, e.g., free management...

D. Clarifications regarding Loan Portfolios:

1. Retail credit portfolio includes:

• All consumer loans (including auto loans, student loans, education loans, and other consumer loans).
• Revolving credit lines (including credit cards and loans granted for purely personal/consumer purposes, not linked to professional or commercial objectives).
• Housing loans.

2. SME credit portfolio includes:

• Loans granted to self-employed professionals (doctors, engineers, lawyers) to finance their professional activities.
• Loans granted to individual enterprises or companies (general partnerships, simple partnerships, participation companies, anonymous companies including holding companies, limited partnerships by shares, limited liability companies, or offshore companies) meeting at least one of the following:
  • Annual turnover does not exceed $10 million.
  • Total assets do not exceed $10 million.
  • Number of employees does not exceed 60.
• Loans granted to individuals to finance their private investments, where repayment sources are revenues from companies they own meeting the conditions above.

3. Corporate credit portfolio includes:

• Loans granted to individual enterprises or companies not meeting the conditions in paragraph 2 above.
• Loans granted to insurance companies regardless of size.
• Loans granted to individuals to finance private investments, where repayment sources are revenues from companies they own not meeting the conditions in paragraph 2 above.

4. Public sector entity credit portfolio includes loans granted to public sector entities with independent legal personality, or authorized by public law, establishment law, or special law to borrow from banks. Two types:

• Central State and local authorities (e.g., municipalities) and affiliated institutions with the ability to collect periodic revenues, unable to be declared bankrupt due to legal form.
• Public industrial and commercial institutions operating in competitive commercial or service markets.

5. When declaring a guarantor in case of personal guarantees, determine their credit portfolio, not the client's.

Third: Declaration of Obligations

A. Direct Obligations

1. Lending against cash guarantees and similar.
2. Lending against financial values.
3. Lending against real estate security.
4. Lending against other guarantees.
5. Lending with personal guarantees.
6. Unsecured lending.
7. Total.

The value of granted and utilized loans/advances against provided guarantees shall be recorded in millions of Lebanese Lira in the 'Declaration to the Central Risk Office - Direct Obligations' (1/2 1CDR) as follows:

• In the 'Loan Type Code' field, enter the code corresponding to each loan/advance per the 'Loan Type Codes' (01CTC) attached.
• In the 'Economic Sector' field, specify the economic activity for each advance based on its purpose per the 'Economic Sector Classification' (01ECO) attached.
• In the 'Currency Code' field, enter the code corresponding to each advance's currency per the 'Currency Codes' (01DEV) attached.
• In the 'Remaining Term' field, enter the number of months remaining for each loan. For current account facilities, specify 12 months.
• In the 'Risk Classification' field, classify each debt according to regulatory texts issued by the Central Bank of Lebanon. The Banking Control Commission shall verify declarations against actual loans during on-site inspections.
• In the 'Loan Usage Area' field, enter the area code for each advance per the 'Loan Usage Area Codes' (01REG) attached. For guarantors and personal loans, specify the residential address.

B. Guarantees

8. Total Cash Guarantees and Similar: Includes cash guarantees, cash margins, bank guarantees, treasury bonds, state guarantees, creditor accounts for debtor accounts '20890' plus cash margin on exchange operations '20872', currencies for receipt against currencies for delivery - clients '30320 + 30332'.

9. a) Total Real Estate Guarantees
   b) Total Financial Values c) Total Other Guarantees: Includes credit assets provided as collateral by client or others, shipping documents held by the bank, commercial mortgage, machinery/equipment mortgage, commercial bonds given as collateral, warehouse goods mortgage only, confirmed letters of credit - export (assignment required).

C. Indirect Obligations

10. Financing Commitments include:

• 30140 - Irrevocable open letters of credit.
• 30240 - Contractually open credits (direct facilities from within the balance sheet) - unused balance.
• 30270 - Other financing commitments.

11. Signature Commitments include:

• 30220 - Guarantees to ensure repayment of facilities/loans.
• 30260 - Other signature commitments.

12. Foreign Currency Forward Transactions include:

• 30320 - Foreign currencies for receipt against L.L. for delivery - clients.
• 30332 - Foreign currencies for receipt against other foreign currencies for delivery - clients.

13. Bond Commitments include:

• 30210 - Guarantees and sureties on bonds.

14. Financial Instrument Commitments include:

• 32100 - Interest rate instrument operations - client obligations portion.
• 32200 - Exchange rate instrument operations - client obligations portion.
• 32300 - Other instrument operations - client obligations portion.

15. Other Commitments include:

• 30260 - Other signature commitments (not noted above).
• 30270 - Other financing commitments (not noted above).

16. Sureties and Guarantees include:

• 30910 - Personal guarantees (record each natural person's guarantee separately; joint/several guarantees among multiple natural persons are not permitted).
• 30920 - Sureties on bonds.

17. Total: Record total declared indirect obligations.

The value of granted/utilized loans/advances by nature shall be recorded in millions of L.L. in 'Declaration to Central Risk Office - Indirect Obligations' (2/2 1CDR) as follows:

• 'Loan Type Code' field: code per 01CTC.
• 'Economic Sector' field: activity per 01ECO.
• 'Currency Code' field: currency per 01DEV.
• 'Cash Margins and Similar' field: value of cash margins taken on financing commitments (EF), signature commitments (ES), bond commitments (SE), financial instrument commitments (IF). Also record value of currencies for receipt against currencies for delivery in forward transactions (OT).

D. Memorandum Accounts

18. Credit assets in the form of loans financed by credit deposits include:

• 35140 - Loans.

19. Non-performing loans include:

• 32540 - Fully provisioned non-performing loans transferred to memorandum accounts per assets.

20. Debts of clients of microfinance institutions include:

• 31482 - Microloans granted by institutions...