Raja Salama’s case: a bank strikes again

While, for several months, the investigation into the explosion that occurred in the port of Beirut on August 4, 2020 has been regularly suspended due to the repeated renunciation of Judge Tariq Bitar, a coalition of about thirty Lebanese associations, called the “Coalition for the Independence of Lebanon”. Justice for Lebanon,” fears that another investigation will meet the same fate.

This investigation was conducted by the discriminatory Public Prosecutor Jean Tannous. An investigation relating to suspicious transfers of more than $330 million from a Banque du Liban account between 2002 and 2014 (and some transfers in 2015) to an HSBC private bank account (Switzerland). These transfers were made within the framework of a brokerage contract in Eurobonds and Treasury bonds signed between the Banque du Liban and Forry Associates Ltd (Forry), a company registered in the British Virgin Islands in 2001 and whose economic beneficiary number is Raja Salameh, brother of Central Bank Governor Riad Salameh.

However, the current procedure led by Jean Tannous suffered a setback ten days ago, when BankMed, through its lawyer Rachid Derbas, the former Minister of Social Affairs between 2014 and 2016 in Tammam Salam’s government, filed a complaint against the Lebanese state on the grounds that the plaintiff The general had committed “gross negligence”. The fact that the latter had requested four of the five Lebanese banks mentioned in the Swiss part of the investigation, namely BankMed, Bank Audi, Banque Misr Liban (BML) and Crédit Libanais – Saradar Bank is mentioned in the Swiss case but in the article once, it was part of the Bank Audi group Saradar was therefore not targeted by the Lebanese investigation – for providing her with bank account statements belonging to Raja Salameh inside, on the suspicion that illicit enrichment would constitute a violation of banking secrecy according to Rashid Derbas.

To understand why Jean Tannous’s demand is specifically targeting these four banks, we have to go back nearly a year. On November 27, 2020, the Attorney General of the Swiss Confederation sent a request to the Lebanese courts for judicial cooperation on suspicion of “aggravated money laundering in connection with a possible embezzlement on the account of the Banque du Liban”. In this document, the Swiss prosecution summons an amount estimated at more than 330 million dollars, which was to be circulated to the personal accounts of Raja Salameh in Switzerland, and then in Lebanon, as well as to companies linked to Riad Salameh and Marianne Howeik, a senior advisor. At the Banque du Liban and the assistant governor. In all, at least $207 million could have been transferred back in Lebanon to accounts in the name of Riad Salameh’s brother within these five Lebanese banks. Subsequently, a Lebanese investigation was opened in January 2021 by the Public Prosecutor of the Court of Cassation, Ghassan Oueidat, with the aim of tracing the transactions after the funds passed through Lebanese banks.

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“legal difference”

Contacted by L’Orient Le Jour, BankMed did not wish to comment on “ongoing legal cases (…) out of respect for Lebanese laws”. However, the bank clarified that it “recently resorted to one of the highest judicial authorities in Lebanon to obtain its ruling in a legal matter related to the final decision of the competent authority to lift banking secrecy. It is the “special” investigation committee (SIC in English, editor’s note), an independent legal personality with Judicial status, in application of Law No. 44 of November 24, 2015 on combating money laundering and the financing of terrorism, in place of the Public Prosecutor of the Court of Cassation.Thus, all requests regarding customer information and matters involving bank secrecy, whatever the source, can only be processed through The appropriate regulatory channel is the SIC”.

A response similar to that given by Bank Audi to L’Orient-Le Jour, the only other bank targeted by the investigation that agreed to answer our questions. Bank Audi confirmed that it did not file a lawsuit in this case, explaining that there is a “legal dispute” regarding the application of the banking secrecy law. For her, too, “the possibility of applying bank secrecy in illicit enrichment proceedings in light of the laws in force, in particular those relating to Law No. 44/2015 on combating money laundering and terrorism, is dealt with exclusively by the Special Committee. Query (SIC, editor’s note) ) about lifting banking secrecy on customer accounts. Accordingly, he calls on the “relevant higher judicial authorities” to settle this legal dispute. This law therefore intervenes in the context of money laundering, which is a reason for which the Swiss prosecutors are investigating, while Judge Tannous, at the present time, is investigating illicit enrichment.

The difference between these two models is significant. In fact, if Law No. 44 stipulates that only the Special Investigation Commission can decide to lift banking secrecy, then this body relies on the Banque du Liban and is headed by Riad Salameh. As for the aforementioned legal source, “these are two different charges,” stressing that the Lebanese judge’s request does not fall within the scope of Law 44. In addition, “the banks seem to consider Article 7 of the 1956 Law (bank secrecy has been abolished) by Law 44. But legally A special (on money laundering) cannot override another private law (the exception regarding illicit enrichment),” she insists again, insisting that this article is still in effect. It concluded: “The interpretation of the banks is therefore inconsistent with the philosophy of the 1956 Banking Secrecy Act.”

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This law of 3 September 1956 establishes certain exceptions to banking secrecy. For example, Article 2 indicates that it can be waived if authorized by the depositor, his heirs or whomever he authorizes, as well as in the event of the client’s declaration of bankruptcy or in a dispute between the depositor and his bank. Article 7 also clarifies that banks may not “object the professional secrecy stipulated in this law for requests submitted by judicial authorities in the context of lawsuits related to illicit enrichment.” However, it is precisely this aspect that Jean Tannous is investigating and this is the reason why he sent him to the banks to get Raja Salameh’s account statements. Since its adoption, this law has not allowed Lebanese officials and their accomplices to deposit dirty money in banks. In the case of illicit enrichment, there is no banking secrecy,” insists another legal source contacted by Lorient Le Jour.

Redefined on October 16, 2020 in Law No. 189 (which replaced Law No. 154 of December 27, 1999), illicit enrichment now refers to the significant and unjustified increase (both in Lebanon and abroad) in the assets owned by A person who is close to or remotely associated with the public service (Political Eminent Persons – PEP) compared to his actual stated resources.

In addition, within the framework of this law, bank secrecy shall be lifted, under the exception provided in Article 7 of the 1956 Law that allows the Public Prosecution or other judicial bodies to direct requests in this direction, under investigation or trial. for illicit enrichment. Likewise, under the provisions of this new Law 189/2020, “the burden of proof is also reversed, that is, it is up to political persons to justify the fundamental change in their wealth,” another judicial source explains. Affiliation with the “Independence of Justice Coalition for Lebanon”. Raja Salameh, as the brother of the Governor of the Central Bank, is a political-political person, according to the new comprehensive definition of the aforementioned Law 189, which is moreover in relation to public money, having received remittances resulting from transactions related to securities and issuances in favor of the state through a company Forry, of which he appears to be the sole beneficial owner. “All of this justifies,” according to the same source, “the lifting of bank secrecy on Raja Salama’s accounts.”

reprisals

Finally, this file is not only in the hands of Lebanon. Several European countries, including Switzerland, France, the United Kingdom, Luxembourg and Germany, are also involved in this case, among which at least one, Switzerland, has submitted an information-sharing request in its request for mutual legal assistance with Lebanon. Which is based on the instructions of the judge who asked the banks to deliver the information. Having acceded in 2009 to the United Nations Convention against Corruption (Uncac), through Law No. 33 of 2008, the Cedar State is obliged, if conditions are appropriate, to send the requested information. In this case, the Lebanese law on bank secrecy no longer covers this information in principle, in accordance with Article 46, paragraph 8 of the Uncac Law which states that “States parties may not invoke bank secrecy to refuse ‘mutual legal assistance.’” A judicial source states that “The international convention ratified by Lebanon prevails over domestic law.”

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But so far, Lebanon has not sent the requested information. “Even if the Lebanese investigation does not succeed in lifting the bank secrecy of these accounts, the investigations continue abroad on their part,” recalls Zina Wakim, a lawyer in international law, a member of Accountability Now, who filed a complaint against Riad. safety last April. Riad Salameh, for his part, rejected all accusations against him so far.

This situation may be problematic for Lebanon. By continuing to focus on banking secrecy, without making it more flexible within a framework established by law, such as money laundering, for example, Lebanon could expose itself to dire consequences. The country had already had to ease its banking secrecy in 2001 and 2015, to exit or avoid entering the gray and black lists (respectively countries to monitor that do not comply with international financial agreements) of international organizations, including the Financial Action Task Force (FATF) concerned with money laundering. However, being included in these lists means that foreign banks may be reluctant to send money to Lebanon, making transfers to the country more complicated. In the extreme case, the inclusion of Lebanon in some blacklists could lead to its exclusion from the international financial system.

While, for several months, the investigation into the explosion that occurred in the port of Beirut on August 4, 2020 has been regularly suspended due to the repeated renunciation of Judge Tariq Bitar, a coalition of about thirty Lebanese associations, called the “Coalition for the Independence of Lebanon”. Justice for Lebanon”, she fears that no further investigation will be conducted…

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