What prevents the return of funds withdrawn at discretion from banks abroad?

Rola Rashid

In the whirlwind of searching for a way out of the dilemma of financial bankruptcy into which the country has been dragged by successive political authorities, the fate of the return of funds withdrawn abroad after October 17, 2019 remains sometimes in the circle of ambiguity, and sometimes “thinking”, with legal jurisprudence – of course – and other things. defensive positions…

Namely, the transfer of money abroad is permitted by law, but the assumption of discretion in the transfer by individual bank managements under political or other pressures in favor of political, influential and close leaders… goes beyond the scope of legal regulations and moral ethics in a flagrant way, to lead to clientelism.

And the camp’s silence on this issue raises the pace of enormous resentment towards the banking sector, which denies depositors money under the pretext of state financing.

Despite the justifications and the imposition of responsibility on the state that squandered the wallet of Banque du Liban, banks and depositors, the exemption of the “Central” and the sector does not at all belong to the category of equality and human and social justice due to the unjustified practice that many banks apply in terms of the value of transfers, payments in pounds and the exchange office that controls their working hours. And the closing of the same due to the mood of some employees close to them in favor of other customers’ expenses without any responsibility or control.

Despite our belief that preserving the integrity of the banking sector is an essential pillar in the workshop of economic revival and a recognizable item in any sound and smart recovery plan, we are still in a long search for it. However, the question arises, what will be the path of the fight for the return of smuggled and extracted money after October 17, 2019, in light of the relaxation in the control of violations?

No matter how wide the field of legal jurisprudence was, it came at the expense of the rights of depositors and the bank balance sheet, which did not avoid the losses caused by transfers and payments abroad.

Meanwhile, with a major imbalance in the standards of equality and fairness towards depositors, some deposits withdrawn abroad are questioning how clean they are, given some doubts about their sources.

According to the executive director of Juriscale, Dr. Sabine El-Kik, “The issue of the recovery of smuggled funds has taken a popular place in the political discourse beyond its actual magnitude and more than the desired results. With or without the law, nothing in the Lebanese law prevents us from recovering funds from abroad , but the condition Evidence of this and a final court judgment establishing that their source is illegitimate. The description of the problem requires a classification procedure, and as for the recovery of smuggled funds, it is subject to the law of the country from which the funds are to be recovered. For example, if we take Switzerland as country of destination of depositing these funds, we must review the standards and procedures applied there.

In principle, the question of refunding money in countries where power reigns, where dictatorship reigns requires some kind of coup d’état; In other words, the party demanding the refund must be the other party who smuggled the money.

The countries that managed to recover the money witnessed political coups, which changed the authorities accused of corruption.

Kik told An-Nahar: “In Lebanon, to date, there has not been a single final or unfinished verdict claiming corruption in the use of public funds. It should not be overlooked that the state that is obliged to implement every court decision has its First Must : to ensure a path for prosecution, especially because it cannot strike its financial and banking systems with the signal of the Lebanese people and the Lebanese parliament, because it is subject to agreements and international relations.

Second: If the money is returned, it will not enter the state treasury. In most countries where this process succeeded under the ruling regimes, this money was not in cash, but there is a desire to return these funds, according to agreements in the form of sustainable development projects, and therefore there is coordination in monitoring their employment in international and domestic non-governmental organizations and institutions.

Here we are talking about general cases in the field of money refunds, which is difficult to apply in Lebanon, because specific cases have to be looked at, which means proving the accusation against individuals, and accordingly obtaining a final verdict that requires its implementation. .

Besides, whatever laws are issued in Lebanon, you will not follow the right path. In fact, all existing laws help to recover funds and responsibility, but it is not the texts that matter, but their implementation.”

This refers to the funds looted or derived from corruption crimes that were mentioned in the draft law for the rebalancing of the financial system in Lebanon in the first section related to the recapitalization of the Banque du Liban, and it was concluded that “in order to protect the rights of depositors, the state will participate to the greatest extent possible in the re-establishment of the solvency of the Lebanese Bank.” Lebanon in hard currency, through: 1- Recapitalization of Banque du Liban in the amount of two and a half billion US dollars through financial bonds and/or other funds that will be determined by decrees issued by the Council of Ministers, based on the proposal of the Minister of Finance. criminal offenses in accordance with the applicable laws, especially Law No. 214 of 4/8/2021 (Law on the recovery of funds from corruption crimes).

As for money withdrawn from banks after 17 October 2019? And what is its size?

As for financial and banking expert Dr. Nicolas Sheikhani, “the value of the money that left Lebanon after October 17 is estimated at between 6 and 8 billion dollars, specifying that the process was carried out discretionally.”

“An-Nahar” says: “This thing contributed somewhat to the destruction of the economy, especially since the gross domestic product, which was 18 billion dollars, left 50% of it, which accelerates the economic collapse twofold and threefold.” more. If that hadn’t happened, those 8 billion dollars would have helped.” In the economic recovery, bearing in mind that the one who managed to get his money out has a legal and technical right, not a national and discretionary one as practiced by the banks, especially since they violated the principle of equality among citizens prescribed by the Lebanese constitution.

Also, if these amounts had not been withdrawn from the banks, the banks would have been able to maintain sufficient liquidity to fulfill their obligations to depositors and help them improve their quality of life on the one hand, and on the other hand they would have preserved trust in the banking sector as a whole, which is unfortunately missing today. and which reflects on the overall economic situation.

And he believes: “Banks today, through Article 12 of the proposal for the Capital Control Act, are trying to avoid their responsibility in the process of wasting deposits. The question here is, if they really want to return depositors’ money, how can they demand an exemption from what happened?”

We are in a country with a free economy, where there are no laws obliging the return of depositors who have left it. However, in this context, in banks subject to laws, the question of liquidity and solvency arises, which requires appropriate decision-making. Therefore, it is urgently necessary to speed up the creation of a joint plan between the state, the “Central Bank” and banks to solve the problem of returning funds to depositors who are in banks after recognizing losses.

Banking sources confirm: “The governor of the Banque du Liban was familiar with all the numbers of transfers abroad, which took place and are valid until today. His powers allow him to know the size of the amounts leaving the banking system and how to distribute them, whether they were transferred to accounts abroad, whether they were for the purpose of repaying loans.” , or raised for savings in homes.

Likewise, Circular 154, which criminalizes banks that cannot induce their customers to repay between 15 and 30 percent of amounts above $500,000 issued after 2017, has not produced the desired results.

It is true that there is no law obliging owners of paid deposits to return them to bank accounts in Lebanon, but the alternative depends on the performance of the bank and the leniency it will provide to depositors with incentives to raise the ceiling for withdrawals and transfers, and most importantly the release of deposits that guarantees the restoration of confidence in your system.

In conclusion, it is correct to say at the end of 2022 that “all circulars and laws have not been respected, with political cover, so that monetary chaos and discretion will remain dominant in the situation for an as yet unknown mandate!” “

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