Swiss open money-laundering probe of Lebanon’s central financial institution | Enterprise and Financial system Information

The investigation is the latest blow of confidence for Lebanon’s crippled financial system.

Beirut, Lebanon – The Swiss authorities have asked the Lebanese judiciary to cooperate in a money laundering investigation by the country’s central bank in order to treat the bankrupt financial institution and its depressed governor with the latest loss of confidence.

The investigation focuses on $ 400 million in remittances allegedly tied to the bank’s 27-year-old governor, Riad Salameh, his brother Raja, and Salameh’s adviser Marianne Al-Hoayek, a court source told Al Jazeera. Institutions in which the bank has a large stake – including Middle East Airlines and the Casino du Liban – are also being scrutinized, the source said.

Salameh issued a statement denying any wrongdoing and dismissing overseas broadcast reports from him, his brother or his advisor as “falsifications and false news.” He threatened legal action against anyone who publishes the information in order to damage his reputation.

The Swiss Public Prosecutor’s Office did not immediately respond to Al Jazeera’s request for comment. Officials from the Swiss embassy in Beirut referred Al Jazeera to the public prosecutor. The outgoing Lebanese Justice Minister also did not respond to a request for comment.

Reuters news agency quoted the Swiss Attorney General as saying it had asked Lebanon for legal assistance as part of an investigation into “increased money laundering” and possible embezzlement of the Lebanese central bank, formerly known as Banque du Liban.

It wasn’t immediately clear whether Salameh was a suspect.

Tuesday’s news only deepens Salameh’s spectacular crash since late 2019, when Lebanon plunged into its deepest economic crisis since its 1975-1990 civil war. The Lebanese currency has since lost more than 80 percent of its value against the US dollar, and more than half of the population now lives in poverty.

Salameh has previously received numerous international bank awards and is a serious candidate for the country’s presidency. Since then, he has been targeted by anti-government demonstrators who, along with top politicians, blame him for the country’s financial collapse.

Meanwhile, the international community has made much-needed aid to Lebanon conditional on a forensic review by the central bank, which Salameh has been running since 1993.

The Swiss probe could still encounter obstacles in Lebanon. The court source said prosecutor Ghassan Khoury, who received the Swiss request, found a lack of evidence or evidence to justify the “detailed questions” the Swiss authorities are trying to ask Salameh and others.

Khoury could request more information before deciding whether to comply, the source said, noting that in 2020 Lebanon asked Swiss authorities for help with an investigation of an estimated US $ 2.4 billion that was made in the Protests of 2019 – transfers that circumvent unofficial capital controls were transferred outside the country.

Lebanon received no response at the time, the source said.

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