The Application of Law 347 Dated 6/8/2001 concerning the Regulation of Money Dealers

Circular No. 632 for Money Dealers

We enclose a copy of Interim Decision No. 13460 dated July 19, 2022, concerning the amendment of the executive system of Law No. 347 dated August 6, 2001 concerning the Regulation of Money Dealers, attached to Interim Decision No. 7933 dated September 27, 2001, subject of the Interim Circular for Money Dealers No. 3.

Beirut, July 19, 2022

Governor of the Central Bank of Lebanon

Riad T. Salam

Interim Decision No. 13460

Interim Decision No. 7933 dated September 17, 2001

The Governor of the Central Bank of Lebanon, pursuant to the provisions of Anti-Money Laundering and Counter-Terrorist Financing Law No. 44 dated November 24, 2015, particularly Article Four thereof, and pursuant to the provisions of Law No. 347 dated August 6, 2001 concerning the Regulation of Money Dealers, and pursuant to Interim Decision No. 7818 dated May 18, 2001 and its amendments concerning the financial operations monitoring system and counter-terrorist financing, and pursuant to Interim Decision No. 7933 dated September 27, 2001 and its amendments concerning the executive system of the Law on Regulation of Money Dealers, and pursuant to the recommendations of the "Financial Action Task Force" (FATF), and pursuant to the decision of the Central Council of the Central Bank of Lebanon taken in its meeting held on July 18, 2022,

hereby decides the following:

Article One: The text of paragraph (2) from the section "Secondly, from Article Fifteen" of the Executive System of Law concerning the Regulation of Money Dealers attached to Interim Decision No. 7933 dated September 27, 2001 is repealed and replaced with the following text:
« 2- Applying due diligence procedures to current customers based on relative importance and risks, and taking due diligence measures towards existing business relationships at appropriate times, taking into account whether due diligence procedures have been previously taken, the timing of their taking, and the extent of sufficiency of the obtained data. »

Article Two: The text of paragraph (6) from the section "Secondly, from Article Fifteen" of the Executive System of Law concerning the Regulation of Money Dealers attached to Interim Decision No. 7933 dated September 27, 2001 is repealed and replaced with the following text:
« 6- Retaining all records obtained through due diligence procedures regarding the "Customer" and the "Beneficial Owner", specifically their full name, profession, address of residence, and registered business address for legal entities, and in case of absence of the main business location, their financial status, and account files for a period of five years at least after closing the account or terminating the business relationship, and all documents related to operations including commercial correspondence and the results of any analysis performed, for a period of five years at least after completion of the transaction, provided that operational records are sufficient to allow reconstruction of individual transactions such that they can serve as evidence for the Public Prosecutor and Investigator in case of any activity, these records may constitute evidence when necessary. »

Article Three: The text of the last paragraph from paragraph (c) of item (7) from the Executive System of Law concerning the Regulation of Money Dealers attached to Interim Decision No. 7933 dated September 27, 2001 is repealed.

Article Four: The text of paragraph (12) from the section "Secondly, from Article Fifteen" of the Executive System of Law concerning the Regulation of Money Dealers attached to Interim Decision No. 7933 dated September 27, 2001 is repealed and replaced with the following text:
« 12- Adopting a specific policy, controls and procedures by senior management, based on the mandates stipulated in this article, for risk classification and mitigation. »

Article Five: The text of paragraph (13) from the section "Secondly, from Article Fifteen" of the Executive System of Law concerning the Regulation of Money Dealers attached to Interim Decision No. 7933 dated September 27, 2001 is repealed and replaced with the following text:
« 13- Documenting risk assessment results when necessary and retaining them to provide the competent authorities with them when necessary. »

Article Six: The text of paragraph (18) from the section "Secondly, from Article Fifteen" of the Executive System of Law concerning the Regulation of Money Dealers attached to Interim Decision No. 7933 dated September 27, 2001 is repealed and replaced with the following text:
« 18- Ensuring that branches and subsidiaries operating abroad in which the group holds a majority, apply the anti-money laundering and counter-terrorist financing procedures mandated in Lebanon when the minimum requirements in the host country are less stringent than those applied in Lebanon, to the extent permitted by the laws and regulations of the host country. And in case the host country permits effective implementation of specific measures against anti-money laundering and counter-terrorist financing that are consistent with the procedures in force in Lebanon, the financial group applies appropriate additional risk management procedures for anti-money laundering and counter-terrorist financing, "with the Special Investigation Authority" having that authority. »

Article Seven: Paragraph (26) is added to the section "Secondly, from Article Fifteen" of the Executive System of Law concerning Regulation of Money Dealers attached to Interim Decision No. 7933 dated September 27, 2001 with the following text:
« 26- Regarding financial groups, anti-money laundering and counter-terrorist financing programs must be applied at the group level as a whole, including all branches and subsidiaries in which the group holds a majority, and these programs must include the following measures:

• Appointing a compliance officer at the group management level.
• Policies and procedures for exchanging information regarding due diligence towards customers and risk management for anti-money laundering and counter-terrorist financing.
• Providing information regarding customers, accounts, and transactions from branches and subsidiaries to the compliance officer at the group level when necessary for combating anti-money laundering and counter-terrorist financing, which should include information, analytical reports, and reports on activities that appear unusual. Furthermore, branches and subsidiaries should receive such information from the compliance officer at the group level, in a manner consistent with risk management, information analysis, and reports on unusual operations.
• Providing sufficient guarantees regarding confidentiality and the use of exchanged information, including guarantees against undue delay or notification to the customer. »

Article Eight: This decision takes effect upon its issuance.

Article Nine: This decision is published in the Official Gazette.

Beirut, July 19, 2022
Governor of the Central Bank of Lebanon
Riad T. Salam