Founded in 2001, the Special Investigation Commission was established as an independent legal entity with judicial status. The SIC investigates suspicious transactions, decides on the seriousness of reported suspicions, and has the exclusive right to lift banking secrecy and freeze accounts, thus enabling the competent judicial authorities and the Higher Banking Commission to take the necessary measures.
Mansour explained that high level teams from the Financial Action Task Force or its regional bodies, assess and carefully examine the legislations of each country compliance with the FATF AML/CFT standards. They also assess the effectiveness of implementation.
“It’s not like Lebanon is graded in human rights record. But if you don’t comply with the all the AML/CFT standards then Lebanon (or any noncompliant country) will face negative consequences of public listing on the lists of noncompliant countries . Examining the record of each country is a very rigorous process. These FATF assessment teams include judges, financial people and law enforcements officers,” Mansour said.
After these teams complete their assessments, they classify the countries as compliant, partly compliant and noncompliant.
Mansour warned that the first who would suffer upon public listing would be the Lebanese banks that will face difficulties with their correspondent banking institutions around the world.
This means all forms of transactions in U.S. dollars and other foreign currencies will be affected, and in some cases suspended, and this will have an impact on depositors.
He reminded the critics of these bills that Lebanon was a heavily dollarized country, with most deposits in dollars, and most transactions are conducted in the U.S. currency.
Mansour was hopeful that the bills would be passed by Parliament without modifications, but warned against bickering among the MPs over these laws.
He stressed that all these bills have been studied and examined by MPs in the committee and subcommittee as well as the relevant private sector bodies, economists and experts.
The first amendments to the bills under discussion would provide for the expansion of financial crimes covered by the mentioned law from seven financial crimes to 21. The new proposals include additional predicated offenses such as incitement to debauchery crimes by organized networks, felonies, the denial of freedom, theft and abuse of trust, insider trading, fraudulent bankruptcy crimes, environment crimes and crimes related to the literary and intellectual property rights. It is worth noting that these crimes have already been stipulated in the Penal Code and in several other laws.
The second amendments can be attributed to a number of improvements that have been made for a range of definitions and procedures: The drafting of this law has already benefited from the application of the laws and circulars during the period 2001-15.
The third amendments focus on the expansion of the reporting entities to include, for example, lawyers with regard to informing the SIC of financial crimes, based on the system and mechanism drafted by the lawyers of Syndicate of Beirut and Tripoli, public notaries and public accountants.
There is another important bill on the international convention against terrorism which all the Arab countries have joined this convention with the exception of Lebanon.
Most countries around the word have joined the 1999 United Nations convention for the suppression of financing of terrorism.
Mansour expressed some concern if the U.N. convention is not passed on time during the parliamentary debate.
“This is my prime concern and for this reason I have been talking to all parties stressing passing the U.N. convention as it weighs most in Lebanon CFT deficiencies,” he said.
Mansour reiterated that passing the CFT conventions bill is as important as the other three bills.
“Lebanon compliance with the anti-money laundering will help every citizen in Lebanon. But in case we have sanctions then everybody will suffer,” he cautioned.
The Lebanese authorities lifted the banking secrecy on 13 bank accounts for suspicion of money laundering, terrorism funding and financial embezzlement in 2014 and are investigating more cases, the SIC said in its last report.
The SIC said in its annual report that the 13 cases were passed on to the prosecution office following the SIC decision to lifting the banking secrecy on these accounts.
The report said that the SIC received 277 cases, 76 of which came from foreign sources and 201 from local sources. There are still 73 pending cases which need to be investigated, according to the SIC
Mansour said that SIC receives all kinds of cases from abroad and in Lebanon, adding that each case is prudently examined to determine if there are suspicious transactions.
“We order the lifting of any bank account if there is serious suspicion,” he added.
Mansour emphasized that the SIC received more cases this year from different parties and the necessary actions were taken.
He declined to give a specific figure on the amount of cash in bank accounts that have been suspended on suspicious of money laundering since the SIC started operating but estimated it is in the hundreds of millions of dollars.
Mansour emphasized that not every lifting of banking secrecy means that the persons or groups holding these accounts are guilty.
In recent years, he noticed that the bigger dollar value cases SIC received from abroad involves corruption of politicians and corporates.
Mansour also revealed that cybercrimes in Lebanon have grown to alarming levels in the past few years, adding that in 2015 the estimated value of these crimes was close to $50 million.
“What is now really scary are cybercrimes and most specifically is stealing money from people’s bank account. This is happening in Lebanon. We had 60 cases so far this year and the money per case ranges from $1,500 to $2 million,” he said.
Mansour admitted that it is difficult to track the hacker who manages to enter the account of depositors and orders the bank to transfer money to a specific destination without the knowledge of the depositor.
“The biggest problem facing us in cybercrime is that the hacker is anonymous and the second big problem is that it’s difficult to retrieve the money because it is transferred from one country to several other countries within 24-48 hours “ he said.
Mansour noticed that sometimes banks take the orders of transfer by emails for granted and transfer the money to the destination mentioned in these messages. “Some depositors do not check their bank account regularly and if they do they will notice that certain amount of their money has been taken.”
To address this serious problem, the SIC and ISF are organizing with Al Iktissad Wal Aamal a one-day conference on cybercrime on Nov. 12 to raise awareness about this serious financial crime.
Mansour added that banks should call a depositor once or twice to confirm if the money transfer order was authentic.
Luckily, banks may be obliged to replenish the account of a depositor who was the victim of cybercrime because Lebanon does not have legislations on electronic transactions yet which authorizes e-commerce and e-transactions.
© Copyright The Daily Star 2015.