S P E C I A LI N V E S T I G A T I O NC O M M I S S I O NF i g h t i n g M o n e y L a u n d e r i n g

S E C O N D A N N U A L R E P O R T 2 0 0 2•

S P E C I A LI N V E S T I G A T I O NC O M M I S S I O NF i g h t i n g M o n e y L a u n d e r i n g

S E C O N D A N N U A L R E P O R T 2 0 0 2•

Dear SIC Members, Secretary and Staff:

As we all know Year 2002 culminated our efforts with the Financial Action TaskForce deciding to remove Lebanon from the list of Non-Cooperative Countries orTerritories. Although we consider FATF's Decision a confirmation of Lebanon'sgood standing in the legislative and regulatory field as well as in the imple-mentation process, still continuing effort is needed to move forward with the fighton money laundering. With all in mind, it is my utmost pleasure to commend youon the extremely remarkable work done by everyone at the SIC.

Throughout the year, the Commission continued with vigor its endeavors toimprove the quality of its operations and has pursued an aggressive trainingprogram for its staff. The Commission also recommended amendments to BDLCircular 83, in which additional operational and control measures at banks andfinancial institutions were required. On May 31, 2002 Banque du Liban issued theamended circular. A “Compliance Unit” was added at the Secretariat and assignedthe responsibility of carrying out compliance examinations on banks, financialinstitutions and other reporting entities to ensure compliance with AMLregulations and help improve their system of internal controls with respect to theprevention, detection, monitoring and reporting of suspicious transactions.

To complement its efforts in the international cooperation arena, the SIC signedMOUs with several FIUs and applied to join the Egmont Group of FIUs, withTRACFIN of France being the sponsor. In this course, the Secretary accompanied bythe Compliance Manager attended in June 2002 the 10th plenary meeting of theEgmont Group, which took place in Monaco.

The process of creating awareness continued in earnest with BDL sponsoringseveral seminars on anti-money laundering in which the Secretary addressed a widerange of audience. As well, the SIC participated actively in regional seminars andevents, and plans to organize a regional seminar on AML to be held in Spring 2003.

During the year, the SIC received 150 STRs involving 138 cases. Banking secrecywas lifted off 79 cases that were passed on to the General Prosecutor and or thereporting competent authority as called for by Law 318 and 35 cases are currentlyunder investigation. The SIC also examined 48 banks and a significant number ofother reporting entities to ensure compliance with AML regulations.

Now with the de-listing behind us, we look forward to a near future in which ourefforts would enable the SIC to deliver on its commitment to become a leadinginstitution in Lebanon and the region.

Very truly,

Banque du Liban, GovernorSpecial Investigation Commission, Chairman

Riad Salamé

Banque du Liban

Special Investigation Commission(Fighting Money Laundering)

Dear Staff:

It is without a doubt that you and your future colleagues will always rememberJune 21, 2002 as the turning point in the history of the SIC. The FATF's Decision tode-list Lebanon from the NCCT List is a clear recognition of your hard work anddetermination to make a difference in the Lebanese economic mosaic. It is thus noexaggeration that this day is considered our D-Day.

Throughout the year, you have relentlessly worked hard and decided to reach veryhigh standards of professionalism and as such, we all have put long hours andworked many late nights with no regard to self-interest or material benefit. Wewere so privileged to be independently assessed by the FATF's Africa Middle EastReview Group, a well recognized body in the field of AML.

Now with the jubilee over, we remain committed to achieving the objective we setfor ourselves, that is reaching unparalleled levels of excellence and professionalismnot only in Lebanon but in the region as well.

As we set out to publish the second annual report, I take the opportunity to expressour highest regards to the continued and unlimited support awarded to us by theCommission and its Chairman, without such support our achievements would havebeen much diminished.

With my warmest regards,

Muhammad BaasiriSIC Secretary

Special Investigation Commission(Fighting Money Laundering)

Introduction

Procedures Adopted by Lebanon in the Fight AgainstMoney Laundering

Structure and Functions of the SIC

Activities of the SIC

Statistical Data

Training and Seminars

Chapter One:

Chapter Two:

Chapter Three:

Chapter Four:

Annexes:

1 Law 3182 Regulations on the Control of Financial and Banking

Operations for Fighting Money Laundering3 The National Committee for Coordinating AML Policies

1 Organization Chart2 Commission Members3 Secretariat

1 Enhancing the AML Regime2 SIC Units3 Creating Awareness4 International Cooperation5 Staff Training6 Selection of Typologies

1 Cases Reported to the SIC2 Cases Where Banking Secrecy was Lifted3 Cases by Type of Reporting Source4 Cases by Nature of Crime5 Cases Related to Terrorism6 Cases by Reporting Country7 Geographical Distribution of Local Cases8 STRs Received Monthly9 AML Compliance Examination Coverage

1 Local2 International3 Secretary's Presentations

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Introduction

The FATF Decision to remove Lebanon in June of 2002 from the List ofNon-Cooperative Countries or Territories reflects the progress made by the LebaneseGovernment and the hard work done by the SIC. This recognition has a far reachingpositive impact on the Country as a whole and no doubt in mind that year 2002 willbe remembered in Lebanon as a milestone in the history of its financial and bankingsector.

Realizing the fact that more needs to be done in the fight on moneylaundering, the SIC has charted a path to carry out the recommendations of theFATF's Africa Middle East Review Group. These recommendations will enhancecoordination among various concerned authorities particularly between the SIC,Police and Customs. It is also important to mention that the LebaneseGovernment decided on October 24, 2002 to establish the National Committeefor Coordinating AML Policies and set up AML units at the Police and Customs.

Government also forwarded a draft bill to Parliament to amend certainprovisions of Law 318 and the Penal Code, and to add “combating the financingof terrorism” to Law 318 as a predicate offense although such an offense isinferred in the said Law.

Throughout the year, the SIC through its Chairman, its Members and Secretariatand with the contribution of two non-voting experts, the Third Vice-Governor andthe Director of Legal Department at Banque du Liban worked hard towardsachieving the set goals. This has been exemplified through intensive meetings inwhich appropriate decisions were made and necessary steps taken to place the SICat par with international counterparts. The SIC spared no efforts in providing theSecretariat with adequate human, technological and financial resources in order toset a role model for a regional FIU.

The SIC strongly believes that both creating awareness and training should bean ongoing process. Under this context, the Secretary was hosted as a guestspeaker to several seminars at different occasions. As well, the SIC staff par-ticipated in various training programs and attended several seminars in Lebanonand abroad.

On the international front, the SIC signed MOUs with several FIUs andexpects to sign more, if required by counterparts. The SIC has also cooperatedwith many FIUs and other competent authorities in investigating mutual cases.

Introduction

Chapter One

Procedures Adopted by

Lebanon in the Fight

Against Money Laundering

Chapter One

Procedures Adopted by

Lebanon in the Fight

Against Money Laundering

1. Law 3181. Law 318

The Parliament has adopted and the Presidentof the Republic is promulgating the text of thefollowing Law:

Under the provisions of this Law, illicit funds areto be understood as any asset resulting from anyof the following offenses:

1 The growing, manufacturing or trading ofnarcotics.

2 Acts committed by associations of wrongdoers, that are specified by Articles 335 and336 of the Criminal Code, and internationallyidentified as organized crime.

3 Terrorist acts, as specified in Articles 314, 315and 316 of the Criminal Code.

4 Illegal arm trade.

5 The offenses of stealing or embezzling publicor private funds or their appropriation byfraudulent means, and which are punishableunder Lebanese Law by a criminal penalty.

6 Counterfeiting money or official documents.

Money laundering is any act committed with thepurpose of:

1 Concealing the real source of illicit funds, orgiving, by any means, a false statement aboutthe said source.

2 Transferring or substituting funds known to beillegal for the purpose of concealing or disguis-ing their source, or helping a person involvedin the offense to dodge responsibility.

3 Acquiring, holding or using illicit funds, orinvesting such funds in purchasing movable orimmovable assets, or in carrying out financialoperations, while being aware of the illicitnature of these funds.

Article 1

Article 2

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Article 3

Article 4

Article 5

Any person who undertakes money launderingoperations, or intervenes or participates in suchoperations, shall be punishable by imprisonmentfor a period of three to seven years, and by a fineof no less than twenty million Lebanese pounds

Institutions not subjected to the provisions ofthe Banking Secrecy Law of September 3, 1956,including individual institutions, namely ex-change offices, financial intermediation compa-nies, leasing companies, mutual funds, insurancecompanies, as well as companies promoting,building and selling real estate, and merchantsdealing with high-value commodities (jewelry,precious stones, gold, art collections, antiques)must keep special records for operations thatexceed an amount to be determined by theBanque du Liban in the regulations to be set outunder Article 5 of this Law.

They must also ascertain, through official docu-ments, the identity and address of each client,and must keep, for a period of no less than fiveyears, photocopies of these documents, as well asphotocopies of the operation-related documents.

Institutions subjected to the provisions of theBanking Secrecy Law of September 3, 1956 mustcontrol their operations with clients, in order toavoid involvement in what may conceal moneylaundering operations resulting from any of theoffenses specified by this Law.

Within one month from the enforcement of thisLaw, the Banque du Liban shall establish andpublish regulations setting out the rules of suchcontrol, including, as a minimum, the followingobligations to be met by banks and financialinstitutions:

a To ascertain the true identity of their perma-nent clients and that of the beneficial owner,when operations are carried out throughproxies, through figureheads acting forindividuals, institutions or companies, orthrough numbered accounts.

b To apply the same identity verification pro-cess to transient clients, when the value of

1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G

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� A member and his/her alternate, recom-mended by the Governor of the Banque duLiban and appointed by the Counci l ofMinisters.

3 TheSpecia l Invest igat ion Commiss ion shal lappoint a full-time Secretary, who shall beresponsible for the tasks assigned to him bythe Commission, and for implementing itsdecisions. The Secretary shall directly super-vise a special body of auditors designated bythe Commission for the purpose of control-ling and verifying the implementation of theobligations mentioned in the said law. Thesaid control shall be done on a continuousbasis. And none of these shall be bound bythe provisions of the Banking Secrecy Law ofSeptember 3, 1956.

4 The mission of The Special InvestigationCommission is to investigate operations thata re s u s p e c te d to b e m o n e y l a u n d e r i n goffenses, and to decide on the seriousness ofevidence and circumstantial evidence relatedto any such offense or offenses.

When accounts opened at banks or financialinstitutions are suspected to have been usedfor money laundering purposes, the lifting ofbanking secrecy provisions to the benefit ofthe competent judicial authorities and theHigher Banking Commission represented byits Chairman, shall be the exclusive right ofthe Commission.

5 The Commission is con-vened by its Chairman. It shall meet, at least,twice a month and as needed. The legalquorum requires the presence of three mem-bers at least.

6 The Commission shall takeits decisions at a majority of the attendingmembers. In case of a tie, the Chairman shallhave a deciding vote.

7 The Commission shallestablish, within one month from the en-forcement of this Law, its own functioningrules and regulations governing its regularand contractual staff who are subjected toprivate law, namely the obligation of confi-dentiality.

In the framework of the budget prepared bythe Commission and approved by the Central

Member

The Special Investigation Commission.

The Commission.

The Commission.

The Commission.

the requested operation or series of opera-tions exceeds a specified amount.

c To keep, at least for a five-year period aftercompleting the operations or closing theaccounts, photocopies of al l operation-related documents, as well as photocopies ofofficial documents about the identity ofoperators.

d To identify signals revealing the existence ofmoney laundering operations, and set outthe principles of due diligence that coulddetect suspicious operations.

e To refrain from delivering incorrect state-ments that aim at misleading administrativeor judicial authorities.

f To ensure that their auditors monitor theimplementation of regulations to be set outunder this Article, and that they report anyviolation to the Governor of the Banque duLiban.

1 An independent, legal entity with judicialstatus shall be established at the Banque duLiban, and shall discharge its duties withoutbeing under the authority of the Banque duLiban. Its mandate is to investigate moneylaundering operations, and to monitor com-pliance with the rules and procedures stipu-lated by this Law. It will be named hereafter

or

2 The Special Investigation Commission shallconsist of:

The Governor of the Banque du Liban or, incase of impediment, one of the Vice-Gover-nors designated by him.

The President of the Banking Control Com-mission or, in case of impediment, a memberof the Commission designated by him.

The judge appointed to the Higher BankingCommission or, in case of impediment, thealternate judge appointed by the HigherJudicial Council for a period equal to theterm of the judge.

Article 6

“the Special Investigation Commission”“the Commission”.

Chairman

Member

Member

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Council of the Banque du Liban, the expensesof the Commission and of its ancillary bodiesshall be borne by the Banque du Liban.

1 The concerned parties referred to in Articles 4and 5 of this Law must immediately report tothe Commission the details of operations theysuspect to be concealing money laundering.

2 In discharging their duties, the auditors ofthe Banking Control Commission must,through their Chairman, report to the Com-mission any operations they suspect to beconcealing money laundering operations.

1 Upon receiving information from the con-cerned parties mentioned in Article 7, orfrom official Lebanese or foreign authorities,the Commission shall convene immediatelyto consider the case.

2 After perusing the received information, theCommission shall, within a period of threeworking days, take a temporary decision tofreeze the suspected account(s) for a one-time renewable period of five working days,when the source of funds remains unknownor suspected to proceed from a money laun-dering offense. During the said period, theCommission shall continue the investigationof the suspected account(s) either directly orthrough a delegated member of the Commis-sion or a designated concerned responsible,or through its Secretary or an appointedbank auditor. All designated persons shalldischarge their duties under the obligation ofconfidentiality, but without being bound bythe provisions of the Banking Secrecy Law ofSeptember 3, 1956.

3 After completing its investigations, the Com-mission shall take, during the temporaryfreezing period of the suspected account(s),a final decision on whether to free the saidaccount(s) if the source of funds is not foundto be illicit, or to lift banking secrecy regard-ing the account(s) and maintain the freezing.If, at the end of the period stipulated in Para-graph 2 above, the Commission does notrender any decision, the said account(s) shall

Article 7

Article 8

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be automatically deemed free. The final deci-sion of the Commission is not subject to anyordinary or extraordinary form of administra-tive or judicial recourse, including recourseagainst abuse of authority.

4 In case of a decision on lifting banking sec-recy, the Commission shall send a certifiedcopy of its justified, final decision to the StateProsecutor of the Supreme Court, the HigherBanking Commission through its Chairman,the concerned party, the concerned bank,and the concerned foreign authority. Thisshall be effected either directly or throughthe official party through which the informa-tion has been received.

The Chairman of the Commission or his/herdirectly designated delegate may communicatewith any Lebanese or foreign judicial, adminis-trative, financial, or security authority, in orderto request information or know the details ofprevious investigations that are linked or relatedto ongoing investigations by the Commission.And the Lebanese authorities must immediatelyrespond to such an information request.

The Commission shall establisha central system named the Financial InvestigationAdministrative Unit, which will function as thecompetent authority and the official center formonitoring, collecting and archiving informationon money laundering offenses, and for exchanginginformation with foreign counterparts.

The Financial Investigation AdministrativeUnit shall periodically provide the Commissionwith all available information on money laun-dering offenses.

The Commission shall deter-mine the number of the members of this Unit,their functions and their compensation. Whennecessary, it shall take statutory disciplinarymeasures, including termination of employ-ment in case of breach of duty, without preclud-ing the possibility of civil or criminal prosecu-tion. All these persons shall be submitted to thesame obligations that bind the members of the

Article 9

Article 10

The Commission.

The Financial Investigation AdministrativeUnit.

The Commission.

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1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G

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� A member and his/her alternate, recom-mended by the Governor of the Banque duLiban and appointed by the Counci l ofMinisters.

3 TheSpecia l Invest igat ion Commiss ion shal lappoint a full-time Secretary, who shall beresponsible for the tasks assigned to him bythe Commission, and for implementing itsdecisions. The Secretary shall directly super-vise a special body of auditors designated bythe Commission for the purpose of control-ling and verifying the implementation of theobligations mentioned in the said law. Thesaid control shall be done on a continuousbasis. And none of these shall be bound bythe provisions of the Banking Secrecy Law ofSeptember 3, 1956.

4 The mission of The Special InvestigationCommission is to investigate operations thata re s u s p e c te d to b e m o n e y l a u n d e r i n goffenses, and to decide on the seriousness ofevidence and circumstantial evidence relatedto any such offense or offenses.

When accounts opened at banks or financialinstitutions are suspected to have been usedfor money laundering purposes, the lifting ofbanking secrecy provisions to the benefit ofthe competent judicial authorities and theHigher Banking Commission represented byits Chairman, shall be the exclusive right ofthe Commission.

5 The Commission is con-vened by its Chairman. It shall meet, at least,twice a month and as needed. The legalquorum requires the presence of three mem-bers at least.

6 The Commission shall takeits decisions at a majority of the attendingmembers. In case of a tie, the Chairman shallhave a deciding vote.

7 The Commission shallestablish, within one month from the en-forcement of this Law, its own functioningrules and regulations governing its regularand contractual staff who are subjected toprivate law, namely the obligation of confi-dentiality.

In the framework of the budget prepared bythe Commission and approved by the Central

Member

The Special Investigation Commission.

The Commission.

The Commission.

The Commission.

the requested operation or series of opera-tions exceeds a specified amount.

c To keep, at least for a five-year period aftercompleting the operations or closing theaccounts, photocopies of al l operation-related documents, as well as photocopies ofofficial documents about the identity ofoperators.

d To identify signals revealing the existence ofmoney laundering operations, and set outthe principles of due diligence that coulddetect suspicious operations.

e To refrain from delivering incorrect state-ments that aim at misleading administrativeor judicial authorities.

f To ensure that their auditors monitor theimplementation of regulations to be set outunder this Article, and that they report anyviolation to the Governor of the Banque duLiban.

1 An independent, legal entity with judicialstatus shall be established at the Banque duLiban, and shall discharge its duties withoutbeing under the authority of the Banque duLiban. Its mandate is to investigate moneylaundering operations, and to monitor com-pliance with the rules and procedures stipu-lated by this Law. It will be named hereafter

or

2 The Special Investigation Commission shallconsist of:

The Governor of the Banque du Liban or, incase of impediment, one of the Vice-Gover-nors designated by him.

The President of the Banking Control Com-mission or, in case of impediment, a memberof the Commission designated by him.

The judge appointed to the Higher BankingCommission or, in case of impediment, thealternate judge appointed by the HigherJudicial Council for a period equal to theterm of the judge.

Article 6

“the Special Investigation Commission”“the Commission”.

Chairman

Member

Member

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Council of the Banque du Liban, the expensesof the Commission and of its ancillary bodiesshall be borne by the Banque du Liban.

1 The concerned parties referred to in Articles 4and 5 of this Law must immediately report tothe Commission the details of operations theysuspect to be concealing money laundering.

2 In discharging their duties, the auditors ofthe Banking Control Commission must,through their Chairman, report to the Com-mission any operations they suspect to beconcealing money laundering operations.

1 Upon receiving information from the con-cerned parties mentioned in Article 7, orfrom official Lebanese or foreign authorities,the Commission shall convene immediatelyto consider the case.

2 After perusing the received information, theCommission shall, within a period of threeworking days, take a temporary decision tofreeze the suspected account(s) for a one-time renewable period of five working days,when the source of funds remains unknownor suspected to proceed from a money laun-dering offense. During the said period, theCommission shall continue the investigationof the suspected account(s) either directly orthrough a delegated member of the Commis-sion or a designated concerned responsible,or through its Secretary or an appointedbank auditor. All designated persons shalldischarge their duties under the obligation ofconfidentiality, but without being bound bythe provisions of the Banking Secrecy Law ofSeptember 3, 1956.

3 After completing its investigations, the Com-mission shall take, during the temporaryfreezing period of the suspected account(s),a final decision on whether to free the saidaccount(s) if the source of funds is not foundto be illicit, or to lift banking secrecy regard-ing the account(s) and maintain the freezing.If, at the end of the period stipulated in Para-graph 2 above, the Commission does notrender any decision, the said account(s) shall

Article 7

Article 8

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be automatically deemed free. The final deci-sion of the Commission is not subject to anyordinary or extraordinary form of administra-tive or judicial recourse, including recourseagainst abuse of authority.

4 In case of a decision on lifting banking sec-recy, the Commission shall send a certifiedcopy of its justified, final decision to the StateProsecutor of the Supreme Court, the HigherBanking Commission through its Chairman,the concerned party, the concerned bank,and the concerned foreign authority. Thisshall be effected either directly or throughthe official party through which the informa-tion has been received.

The Chairman of the Commission or his/herdirectly designated delegate may communicatewith any Lebanese or foreign judicial, adminis-trative, financial, or security authority, in orderto request information or know the details ofprevious investigations that are linked or relatedto ongoing investigations by the Commission.And the Lebanese authorities must immediatelyrespond to such an information request.

The Commission shall establisha central system named the Financial InvestigationAdministrative Unit, which will function as thecompetent authority and the official center formonitoring, collecting and archiving informationon money laundering offenses, and for exchanginginformation with foreign counterparts.

The Financial Investigation AdministrativeUnit shall periodically provide the Commissionwith all available information on money laun-dering offenses.

The Commission shall deter-mine the number of the members of this Unit,their functions and their compensation. Whennecessary, it shall take statutory disciplinarymeasures, including termination of employ-ment in case of breach of duty, without preclud-ing the possibility of civil or criminal prosecu-tion. All these persons shall be submitted to thesame obligations that bind the members of the

Article 9

Article 10

The Commission.

The Financial Investigation AdministrativeUnit.

The Commission.

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1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G

2. Regulations on the Control of

Financial and Banking Operations

for Fighting Money Laundering

2. Regulations on the Control of

Financial and Banking Operations

for Fighting Money Laundering

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Article 15

Article 16

Article 17

The reservations specified in Paragraphs 2, 3 and4 of Article 1 of Law No. 426 of May 15, 1995,related to the ratification of the 1988 UnitedNations Convention on Fighting Illegal Trade ofNarcotics and Psychotropic Drugs, are repealed,as well as the provisions of Article 132 of LawNo. 673 of March 16, 1998, on Narcotics, Psy-chotropic Drugs and their Raw Materials.

Upon entry into force of this Law, any legalprovision that is contrary to, or inconsistentwith its provisions, especially those specified inthe Banking Secrecy Law of September 3, 1956,and those of Law No. 673 of March 16, 1998, onNarcotics, Psychotropic Drugs and their RawMaterials, shall cease to be operative.

This Law shall enter into force on its publicationdate in the Official Gazette.

Commission, especially the obligation of confi-dentiality.

Except for a decision by the Commission to liftbanking secrecy, the reporting obligation stipu-lated by the present Law is absolutely confiden-tial. This absolute confidentiality shall apply toany reporting, natural or moral person, as well asto the documents submitted for this purpose,and to the documents and procedures related toeach stage of the investigation.

Within the scope of their duties under theprovisions of this Law, the Chairman and mem-bers of the Commission, and the Commission'sstaff and delegates, shall enjoy immunity. Inconsequence, they may not be prosecuted orsued, neither collectively nor individually, forany civil or criminal liability related to the dis-charging of their duties, including offensesspecified by the Banking Secrecy Law of Septem-ber 3, 1956, except when any of them disclosesbanking secrecy.

In discharging their duties under the provisionsof this Law, or according to the decisions of theCommission, the bank and its staff shall enjoythe same immunity.

Any person who violates the provisions of Arti-cles 4, 5, 7 and 11 of this Law shall be punishableby imprisonment for a period of two months toone year and a fine not exceeding ten millionLebanese pounds, or by either penalty.

The State shall confiscate any movable or imm-ovable assets that are proved, by a final courtruling, to be related to, or proceeding from,offenses listed in Article 1 of this Law, unless theowners of the said assets prove in court theirlegal rights thereupon.

Article 11

Article 12

Article 13

Article 14

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all their permanent and transient clients,especially in the following instances:

Opening accounts of any kind, includingfiduciary accounts and numbered accounts.

Conducting lending operations.

Concluding contracts for leasing bank safes.

Conducting cashier's operations when thea m o u n t e xce e d s U S $ 10 , 0 0 0 o r t h eequivalent in any other currency.

Cashier's operations include cash paymentsby the client at the counter (depositing funds,exchanging currencies, purchasing preciousmetals, purchasing financial instruments incash, cash subscription to vouchers at thecounter, purchasing traveler's checks in cash,orders for current transfers in cash, etc.).

2 Regardless of the operation's value, the offi-cer in charge of the operation must alsocheck the client's identity if he/she noticesthat, on the same account or on multipleaccounts of the same person, several cash-ier's operations are being effected separatelyfor an amount less than the minimum speci-fied in Paragraph 1 of this Article; if he/shesuspects that a client is making a moneylaundering attempt.

3 In order to check the client's identity, theofficer in charge of the operation must:

a In case the client is a natural person: apassport, an identity card, an individ-ual civil registration, or a residence per-mit.

b In case the client is a legal entity: dulyregistered documents regarding itsstatutes, its registration certificate, theidentity of the person empowered tosign on its behalf, and the identity ofits legal representative.

c In case the operat ion is ef fectedthrough an authorized representative:the original power of attorney or acertified copy, in addition to documentsregarding the identity of both the clientand the au-thorized representative.

d In case the operation is effected by cor-respondence: an authentication of the

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I. Request the following documents from theclient:

Banque du Liban issued circular No. 83 on May 18,2001 concerning regulations on the control offinancial and banking operations for fightingmoney laundering, and ammended it on May 31,2002.

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Article 1

Article 2

Article 3

This regulation was set in implementation of thearticle 5 of Law 318 dated April 20, 2001 relatedto fighting money laundering.

All banks and financial institutions operating inLebanon must:

1 Ascertain the identity and activities of theircorrespondents, making sure, when dealingwith them for the first time, that they arelegal entities, based on submitted documen-tary evidence. In particular, they must makesure that the foreign bank with which theydeal is not a shell bank.

2 Exercise control on their operations withclients to avoid involvement in money laun-dering operations, resulting from any of theoffenses specified in Law No. 318 of April20, 2001. For this purpose, they must follow,for indicative purposes but not restrictively,the mandatory rules set out in these Reg-ulations.”

Section I Control on financial operations forfighting money laundering

Section II Checking the client's identity, deter-mining the economic right's owner (the actualbeneficiary of the intended operation) and theconsequences of non-verification

Checking the client's identity

1 Banks and financial institutions must, as faras they are concerned, check the identity of

2. Regulations on the Control of

Financial and Banking Operations

for Fighting Money Laundering

2. Regulations on the Control of

Financial and Banking Operations

for Fighting Money Laundering

1918

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

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Article 15

Article 16

Article 17

The reservations specified in Paragraphs 2, 3 and4 of Article 1 of Law No. 426 of May 15, 1995,related to the ratification of the 1988 UnitedNations Convention on Fighting Illegal Trade ofNarcotics and Psychotropic Drugs, are repealed,as well as the provisions of Article 132 of LawNo. 673 of March 16, 1998, on Narcotics, Psy-chotropic Drugs and their Raw Materials.

Upon entry into force of this Law, any legalprovision that is contrary to, or inconsistentwith its provisions, especially those specified inthe Banking Secrecy Law of September 3, 1956,and those of Law No. 673 of March 16, 1998, onNarcotics, Psychotropic Drugs and their RawMaterials, shall cease to be operative.

This Law shall enter into force on its publicationdate in the Official Gazette.

Commission, especially the obligation of confi-dentiality.

Except for a decision by the Commission to liftbanking secrecy, the reporting obligation stipu-lated by the present Law is absolutely confiden-tial. This absolute confidentiality shall apply toany reporting, natural or moral person, as well asto the documents submitted for this purpose,and to the documents and procedures related toeach stage of the investigation.

Within the scope of their duties under theprovisions of this Law, the Chairman and mem-bers of the Commission, and the Commission'sstaff and delegates, shall enjoy immunity. Inconsequence, they may not be prosecuted orsued, neither collectively nor individually, forany civil or criminal liability related to the dis-charging of their duties, including offensesspecified by the Banking Secrecy Law of Septem-ber 3, 1956, except when any of them disclosesbanking secrecy.

In discharging their duties under the provisionsof this Law, or according to the decisions of theCommission, the bank and its staff shall enjoythe same immunity.

Any person who violates the provisions of Arti-cles 4, 5, 7 and 11 of this Law shall be punishableby imprisonment for a period of two months toone year and a fine not exceeding ten millionLebanese pounds, or by either penalty.

The State shall confiscate any movable or imm-ovable assets that are proved, by a final courtruling, to be related to, or proceeding from,offenses listed in Article 1 of this Law, unless theowners of the said assets prove in court theirlegal rights thereupon.

Article 11

Article 12

Article 13

Article 14

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1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G

all their permanent and transient clients,especially in the following instances:

Opening accounts of any kind, includingfiduciary accounts and numbered accounts.

Conducting lending operations.

Concluding contracts for leasing bank safes.

Conducting cashier's operations when thea m o u n t e xce e d s U S $ 10 , 0 0 0 o r t h eequivalent in any other currency.

Cashier's operations include cash paymentsby the client at the counter (depositing funds,exchanging currencies, purchasing preciousmetals, purchasing financial instruments incash, cash subscription to vouchers at thecounter, purchasing traveler's checks in cash,orders for current transfers in cash, etc.).

2 Regardless of the operation's value, the offi-cer in charge of the operation must alsocheck the client's identity if he/she noticesthat, on the same account or on multipleaccounts of the same person, several cash-ier's operations are being effected separatelyfor an amount less than the minimum speci-fied in Paragraph 1 of this Article; if he/shesuspects that a client is making a moneylaundering attempt.

3 In order to check the client's identity, theofficer in charge of the operation must:

a In case the client is a natural person: apassport, an identity card, an individ-ual civil registration, or a residence per-mit.

b In case the client is a legal entity: dulyregistered documents regarding itsstatutes, its registration certificate, theidentity of the person empowered tosign on its behalf, and the identity ofits legal representative.

c In case the operat ion is ef fectedthrough an authorized representative:the original power of attorney or acertified copy, in addition to documentsregarding the identity of both the clientand the au-thorized representative.

d In case the operation is effected by cor-respondence: an authentication of the

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I. Request the following documents from theclient:

Banque du Liban issued circular No. 83 on May 18,2001 concerning regulations on the control offinancial and banking operations for fightingmoney laundering, and ammended it on May 31,2002.

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Article 1

Article 2

Article 3

This regulation was set in implementation of thearticle 5 of Law 318 dated April 20, 2001 relatedto fighting money laundering.

All banks and financial institutions operating inLebanon must:

1 Ascertain the identity and activities of theircorrespondents, making sure, when dealingwith them for the first time, that they arelegal entities, based on submitted documen-tary evidence. In particular, they must makesure that the foreign bank with which theydeal is not a shell bank.

2 Exercise control on their operations withclients to avoid involvement in money laun-dering operations, resulting from any of theoffenses specified in Law No. 318 of April20, 2001. For this purpose, they must follow,for indicative purposes but not restrictively,the mandatory rules set out in these Reg-ulations.”

Section I Control on financial operations forfighting money laundering

Section II Checking the client's identity, deter-mining the economic right's owner (the actualbeneficiary of the intended operation) and theconsequences of non-verification

Checking the client's identity

1 Banks and financial institutions must, as faras they are concerned, check the identity of

client's signature on the same docu-ment or separately. The signature'sauthentication or the verification ofthe non-resident client's identity maybe obtained from a correspondent oraffiliated bank, or from a branch or arepresentative office of the concernedbank, or from another bank whoseauthorized signatures can be verified.

4 An agent or a client is meant to be any natu-ral or moral person, whether a corporation oran institution of any kind, or a non-profitorganization or association (mutual funds,cooperatives, welfare centers, charitableassociations, clubs, etc.).

II. Keep, for five years at least after carrying outthe operation or closing the account, the fullname and residential address of the client, inaddition to copies of all documents used tocheck the client's identity.

Article 4

Article 5

The bank/financial institution shall requestfrom each client a written statement about theidentity of the economic right's owner (theactual beneficiary) regarding the intendedoperation, including the full name and residen-tial address of the said owner (the name of theinstitution, its head office and home country, incase the owner is a legal entity or a company).The bank/financial institution shall keep a copyof this statement if it has doubts that the clientis not the economic right's owner, or in case theclient states that the said owner is a third party,especially when cashier's operations are carriedout for an amount exceeding ten thousand USdollars or its equivalent, as mentioned in Article3, Paragraph 1 of these Regulations.

Doubts about the identity of the economicright's owner would arise in the followinginstances, which are mentioned for indicativepurposes but not restrictively:

a When a power of attorney is given to a non-professional person (who, for instance, is nota lawyer, a fully authorized representative, ora financial intermediate) and when it appearsthat the relationship to the client does not

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justify the proxy operation; or when the busi-ness relationship is conducted through nomi-nees or numbered accounts, or through um-brella institutions or companies.

b When the financial status of the client in-tending to make the operation is known tothe officer in charge, and when the opera-tion's value is disproportionate to the finan-cial status of the said client.

c When, through the conduct of business withthe client, any other indicator draws the at-tention of the bank/financial institution.

The bank/financial institution must immedi-ately inform the Governor of the Banque duLiban in his capacity as chairman of the SpecialInvestigation Commission, established by virtueof Article 5 of Law No. 318 of April 20, 2001,when it holds evidence or has doubts that anoperation involves money laundering, espe-cially:

When it has persistent doubts about thecredibi l i ty of the written statementsubmitted by the client regarding theidentity of the economic right's owner, orwhen it discovers that false informationhas been given on the identity of the saidowner.

When it realizes that it was misled in thecourse of checking the client's identity,while having serious and precise doubtsabout the information provided by theclient.

The bank/financial institution shall periodicallycheck again the identity of the client or theidentity of the economic right's owner, espe-cially when it has doubts about the veracity ofpreviously submitted information, or whenchanges have occurred in the client's identity orin the identity of the economic right's owner.

Article 6

Article 7

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S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

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1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G

3 Certain movements in the client's account,such as making large or recurrent depositsreaching a determined ceiling or totaling ahuge amount, unjustified by the apparentactivities of the client.

4 The operation of an account for the mainpurpose of transferring abroad, or receivingfrom abroad, sizeable amounts of money,while it appears to the officer in charge ofsuch operations that they are not justified bythe client's activities.

5 The undertaking of large or recurrent opera-tions related to offshore activities consideredby the officer in charge of such operations asdisproportionate to the client's activities.

6 The replacement of large cash funds by elect-ronic transfer requests or by bank checks.

7 A change in the deposit pattern by a clientwho is exempted from filling the cash trans-action slip (C.T.S.)

8 The undertaking by a client of large cash op-erations in the form of deposits and with-drawals, with insufficient personal identifica-tion.

9 The fact of receiving or cashing checks issuedabroad to the bearer, or to the order of aperson but previously endorsed by personsother than the depositor; or the fact ofreceiving large-amount checks that may beunrelated to commercial transactions oralleged to be gambling gains.

10 The occurrence of cash deposits and/or banktransfers followed by direct and recurrentwithdrawals.

11 The holding of numerous accounts unjusti-fied by the nature of the client's activities, orthe undertaking of numerous cash transfersbetween and through these accounts.

12 The occurrence of cash deposits and/or banktransfers, while the client's activities do notgenerate such a volume of funds.

13 The fact of depositing bank/traveler's checksin the account of a corporation/institutionwhose activities do not justify such deposits.

14 The occurrence of cash deposits and/or banktransfers that appear unusual, consideringthe location of the branch.

Section III

1 The bank/financial institution must enquirefrom the client about the source and destina-tion of funds, the object of the operation,and the identities of both the beneficiary andthe economic right's owner, when it findsthat the intended operation has the follow-ing characteristics:

a A cashier's operation, as described in Ar-ticle 3, Paragraphs 1 and 2 of these Regula-tions.

b An operation to be carried out in excep-tionally complicated circumstances. In thisrespect, the bank/financial institutionshould assess the said circumstances notonly in relation to the nature and type ofthe operation, but also in relation to itsapparent goal.

c An operation that seems to have no eco-nomic rationale or legitimate objective,especially when there is a discrepancybetween the operation and the client'sprofessional activity, or even between theoperation and the client's habits andpersonality.

2 The bank/financial institution must immedi-ately inform the Governor of the Banque duLiban in his capacity as chairman of theSpecial Investigation Commission when, inlight of the answers received, it has seriousdoubts that the operation is an attempt tolaunder funds resulting from any of theoffenses specified by law.

Banks and financial institutions, as far as each isconcerned, must give special attention, forindicative purposes but not restrictively, to thefollowing indicators on money laundering:

1 The exchange of big sums of small-deno-mination bills with large-denomination billsof the same currency or of any other currency.

2 The undertaking of large or recurrent foreignexchange operations (cambio), by using cashfunds.

The obligation to control certainoperations

Article 8

Article 9

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client's signature on the same docu-ment or separately. The signature'sauthentication or the verification ofthe non-resident client's identity maybe obtained from a correspondent oraffiliated bank, or from a branch or arepresentative office of the concernedbank, or from another bank whoseauthorized signatures can be verified.

4 An agent or a client is meant to be any natu-ral or moral person, whether a corporation oran institution of any kind, or a non-profitorganization or association (mutual funds,cooperatives, welfare centers, charitableassociations, clubs, etc.).

II. Keep, for five years at least after carrying outthe operation or closing the account, the fullname and residential address of the client, inaddition to copies of all documents used tocheck the client's identity.

Article 4

Article 5

The bank/financial institution shall requestfrom each client a written statement about theidentity of the economic right's owner (theactual beneficiary) regarding the intendedoperation, including the full name and residen-tial address of the said owner (the name of theinstitution, its head office and home country, incase the owner is a legal entity or a company).The bank/financial institution shall keep a copyof this statement if it has doubts that the clientis not the economic right's owner, or in case theclient states that the said owner is a third party,especially when cashier's operations are carriedout for an amount exceeding ten thousand USdollars or its equivalent, as mentioned in Article3, Paragraph 1 of these Regulations.

Doubts about the identity of the economicright's owner would arise in the followinginstances, which are mentioned for indicativepurposes but not restrictively:

a When a power of attorney is given to a non-professional person (who, for instance, is nota lawyer, a fully authorized representative, ora financial intermediate) and when it appearsthat the relationship to the client does not

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justify the proxy operation; or when the busi-ness relationship is conducted through nomi-nees or numbered accounts, or through um-brella institutions or companies.

b When the financial status of the client in-tending to make the operation is known tothe officer in charge, and when the opera-tion's value is disproportionate to the finan-cial status of the said client.

c When, through the conduct of business withthe client, any other indicator draws the at-tention of the bank/financial institution.

The bank/financial institution must immedi-ately inform the Governor of the Banque duLiban in his capacity as chairman of the SpecialInvestigation Commission, established by virtueof Article 5 of Law No. 318 of April 20, 2001,when it holds evidence or has doubts that anoperation involves money laundering, espe-cially:

When it has persistent doubts about thecredibi l i ty of the written statementsubmitted by the client regarding theidentity of the economic right's owner, orwhen it discovers that false informationhas been given on the identity of the saidowner.

When it realizes that it was misled in thecourse of checking the client's identity,while having serious and precise doubtsabout the information provided by theclient.

The bank/financial institution shall periodicallycheck again the identity of the client or theidentity of the economic right's owner, espe-cially when it has doubts about the veracity ofpreviously submitted information, or whenchanges have occurred in the client's identity orin the identity of the economic right's owner.

Article 6

Article 7

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S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

21

1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G

3 Certain movements in the client's account,such as making large or recurrent depositsreaching a determined ceiling or totaling ahuge amount, unjustified by the apparentactivities of the client.

4 The operation of an account for the mainpurpose of transferring abroad, or receivingfrom abroad, sizeable amounts of money,while it appears to the officer in charge ofsuch operations that they are not justified bythe client's activities.

5 The undertaking of large or recurrent opera-tions related to offshore activities consideredby the officer in charge of such operations asdisproportionate to the client's activities.

6 The replacement of large cash funds by elect-ronic transfer requests or by bank checks.

7 A change in the deposit pattern by a clientwho is exempted from filling the cash trans-action slip (C.T.S.)

8 The undertaking by a client of large cash op-erations in the form of deposits and with-drawals, with insufficient personal identifica-tion.

9 The fact of receiving or cashing checks issuedabroad to the bearer, or to the order of aperson but previously endorsed by personsother than the depositor; or the fact ofreceiving large-amount checks that may beunrelated to commercial transactions oralleged to be gambling gains.

10 The occurrence of cash deposits and/or banktransfers followed by direct and recurrentwithdrawals.

11 The holding of numerous accounts unjusti-fied by the nature of the client's activities, orthe undertaking of numerous cash transfersbetween and through these accounts.

12 The occurrence of cash deposits and/or banktransfers, while the client's activities do notgenerate such a volume of funds.

13 The fact of depositing bank/traveler's checksin the account of a corporation/institutionwhose activities do not justify such deposits.

14 The occurrence of cash deposits and/or banktransfers that appear unusual, consideringthe location of the branch.

Section III

1 The bank/financial institution must enquirefrom the client about the source and destina-tion of funds, the object of the operation,and the identities of both the beneficiary andthe economic right's owner, when it findsthat the intended operation has the follow-ing characteristics:

a A cashier's operation, as described in Ar-ticle 3, Paragraphs 1 and 2 of these Regula-tions.

b An operation to be carried out in excep-tionally complicated circumstances. In thisrespect, the bank/financial institutionshould assess the said circumstances notonly in relation to the nature and type ofthe operation, but also in relation to itsapparent goal.

c An operation that seems to have no eco-nomic rationale or legitimate objective,especially when there is a discrepancybetween the operation and the client'sprofessional activity, or even between theoperation and the client's habits andpersonality.

2 The bank/financial institution must immedi-ately inform the Governor of the Banque duLiban in his capacity as chairman of theSpecial Investigation Commission when, inlight of the answers received, it has seriousdoubts that the operation is an attempt tolaunder funds resulting from any of theoffenses specified by law.

Banks and financial institutions, as far as each isconcerned, must give special attention, forindicative purposes but not restrictively, to thefollowing indicators on money laundering:

1 The exchange of big sums of small-deno-mination bills with large-denomination billsof the same currency or of any other currency.

2 The undertaking of large or recurrent foreignexchange operations (cambio), by using cashfunds.

The obligation to control certainoperations

Article 8

Article 9

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Section IV Committees and administrativeunits responsible for control l ing moneylaundering-fighting operations, and theirtasks

Article 10

Article 11

All banks and financial institutions operating inLebanon must:

1 Establish a special committee consisting ofthe Director General, the Banking Risk Di-rector, the Operations Director, the TreasuryDirector, the Branches Director, and theresponsible for the Unit stipulated in thefollowing Paragraph 2.

2 Establish a unit to ascertain compliance withthe laws, regulation and procedures in force,hereafter named ''the Compliance Unit”.

3 Appoint in each branch of the bank/financialinstitution an officer responsible for the con-trol of money laundering/ fighting opera-tions.

Within their own terms of reference, the com-mittees and administrative units established atthe banks and financial institutions, as well asother concerned officials at the bank/financialinstitution, must comply with the proceduresaiming at the control of money laundering-fighting operations, and must prevent suchoperations from being carried out. Theseprocedures are, for indicative purposes but notrestrictively, defined as follows:

1 Regarding the Special Committee mentionedabove in Paragraph 1 of Article 10:

a To prepare a procedure guide for imple-menting the provisions of the Law onFighting Money Laundering and the pro-visions of these Regulations.

b To prepare a form for client recognition (KYC:Know Your Customer) and for controllingfinancial operations to avoid involvement inmoney laundering operations. This formshould include basic information aboutclients, in particular their economic and/orprofessional activities, the nature of theirwork, and their mailing and residence ad-dresses. And this information must besupportedwithdocumentaryevidence.

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c To ascertain the proper implementationand effectiveness of the procedures andregulations on fighting money launderingoperations.

d To review periodically the above-men-tioned procedures and regulations, and todevelop them in line with up-to-datemethods of fighting money laundering.

e To prepare a training program on themethods of controll ing financial andbanking operations, in accordance withthe control procedure guide, and withother legal and regulatory texts in force.

f To review, in high-risk accounts, cash de-posit and withdrawal operations, transferoperations, and the link between theseoperations and economic activities.

g To investigate suspicious operations, andto refer them with comments to the boardof directors.

h To monitor, when the operation exceeds tenthousand US dollars or its equivalent, theadequacy of exemption procedures where-by some well-known clients are exemptedfrom filling the cash transaction slip, and alsoto determine the exemption ceiling and tomodify it according to developments in theclient'seconomicsituation.

2 Regarding the Compliance Unit:

a To ascertain that responsible officers arecomplying with the procedure guide onthe implementation of legal and regula-tory texts for fighting money laundering,and that the KYC forms are properly filled.

b To review periodically the effectiveness ofthe procedures and regulations on fight-ing money laundering operations, and topropose amendments to the competentcommittee, mentioned above in Para-graph 1 of Article 10, for taking appropri-ate decisions with the approval of Man-agement.

c To review the daily/weekly reports re-ceived from the concerned departmentsand branches about cash operations andfund transfers.

d To report suspicious operations to theChairman of the Board or to the DirectorGeneral.

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S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

23

1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G

transaction sl ip when making a cashdeposit exceeding the amount of tenthousand US dollars or its equivalent.

b To prepare tables for operations thatexceed the ceiling specified in relevantregulations, and to take the necessarymeasures to safeguard these tables, inorder to make them available, on request,to internal auditing officers or bankauditors, or to the Special InvestigationCommission

c To report to the Compliance Unit, throughthe officer responsible for operationscontrol at the branch, any doubtful cashdeposit that may involve money laun-dering operations.

7 Regarding the Check Section Chief:

a To give caution and attention to checksendorsed to a third party and to bankchecks that are not deposited by the firstbeneficiary, as well as to traveler's checksand checks issued by institutions in for-eign countries, in addition to those inwhich the identity of the account's holderis not specified.

b To report to the Compliance Unit, throughthe officer responsible for operationscontrol at the branch, any check deemedsuspicious.

c To make sure that checks are not creditedto clients' accounts before being effec-tively collected from the issuing banks.

8 Regarding the Branch Director:

a To perform, when necessary, the functionsof the officer responsible for operationscontrol at the branch.

b To review account opening operations,and to approve exemptions granted tocertain clients regarding the filling of cashtransaction slips.

c To coordinate with the Credit Directorconcerning debit accounts, and with theBranches Director concerning credit ac-counts.

d To make periodical visits to debtor clientsto take cognizance of their business. And,also, to prepare reports about creditor

e To submit periodical reports to the Boardof Directors on the operations that appearto imply suspicious operation risks.

3 Regarding the Internal Audit Unit:

a To audit cash operations, transfers, andaccount movements.

b To ascertain that concerned branches andsections are complying with the proce-dure guide on the implementation of legaland regulatory texts for fighting moneylaundering, and that the KYC forms areproperly filled.

c To report discrepancies to the appointedauditor, through periodical reports.

4 Regarding the Officer responsible for opera-tions control at the branch either the branch'sdirector or the operations manager:

a To ascertain that the branch's employeesare complying with the procedure guide onthe implementation of legal and reg-ulatory texts for fighting money launder-ing, and that the KYC forms are properlyfilled.

b To control cash operations, transfers, andany other account-related operations.

c To report any suspicious operations to theCompliance Unit.

5 Regarding the Transfers Section Chief:

a To verify transfers credited to clients' ac-counts as well as electronic transfers,which exceed a certain amount and do notfollow a usual pattern, when consideringthe nature and size of the client's activi-ties. Also, to verify the accounts fromwhich recurrent or unusual transfers aremade, and to ascertain the integrity ofthese transfers in relation to the veracityof their sources.

b To report to the Compliance Unit, throughthe officer responsible for operations con-trol at the branch, any doubtful transferthat may involve suspicious money laun-dering operations.

6 Regarding the Cashier:

a To require from clients, with the excep-tion of those exempted, to fill the cash

Section IV Committees and administrativeunits responsible for control l ing moneylaundering-fighting operations, and theirtasks

Article 10

Article 11

All banks and financial institutions operating inLebanon must:

1 Establish a special committee consisting ofthe Director General, the Banking Risk Di-rector, the Operations Director, the TreasuryDirector, the Branches Director, and theresponsible for the Unit stipulated in thefollowing Paragraph 2.

2 Establish a unit to ascertain compliance withthe laws, regulation and procedures in force,hereafter named ''the Compliance Unit”.

3 Appoint in each branch of the bank/financialinstitution an officer responsible for the con-trol of money laundering/ fighting opera-tions.

Within their own terms of reference, the com-mittees and administrative units established atthe banks and financial institutions, as well asother concerned officials at the bank/financialinstitution, must comply with the proceduresaiming at the control of money laundering-fighting operations, and must prevent suchoperations from being carried out. Theseprocedures are, for indicative purposes but notrestrictively, defined as follows:

1 Regarding the Special Committee mentionedabove in Paragraph 1 of Article 10:

a To prepare a procedure guide for imple-menting the provisions of the Law onFighting Money Laundering and the pro-visions of these Regulations.

b To prepare a form for client recognition (KYC:Know Your Customer) and for controllingfinancial operations to avoid involvement inmoney laundering operations. This formshould include basic information aboutclients, in particular their economic and/orprofessional activities, the nature of theirwork, and their mailing and residence ad-dresses. And this information must besupportedwithdocumentaryevidence.

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c To ascertain the proper implementationand effectiveness of the procedures andregulations on fighting money launderingoperations.

d To review periodically the above-men-tioned procedures and regulations, and todevelop them in line with up-to-datemethods of fighting money laundering.

e To prepare a training program on themethods of controll ing financial andbanking operations, in accordance withthe control procedure guide, and withother legal and regulatory texts in force.

f To review, in high-risk accounts, cash de-posit and withdrawal operations, transferoperations, and the link between theseoperations and economic activities.

g To investigate suspicious operations, andto refer them with comments to the boardof directors.

h To monitor, when the operation exceeds tenthousand US dollars or its equivalent, theadequacy of exemption procedures where-by some well-known clients are exemptedfrom filling the cash transaction slip, and alsoto determine the exemption ceiling and tomodify it according to developments in theclient'seconomicsituation.

2 Regarding the Compliance Unit:

a To ascertain that responsible officers arecomplying with the procedure guide onthe implementation of legal and regula-tory texts for fighting money laundering,and that the KYC forms are properly filled.

b To review periodically the effectiveness ofthe procedures and regulations on fight-ing money laundering operations, and topropose amendments to the competentcommittee, mentioned above in Para-graph 1 of Article 10, for taking appropri-ate decisions with the approval of Man-agement.

c To review the daily/weekly reports re-ceived from the concerned departmentsand branches about cash operations andfund transfers.

d To report suspicious operations to theChairman of the Board or to the DirectorGeneral.

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S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

23

1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G

transaction sl ip when making a cashdeposit exceeding the amount of tenthousand US dollars or its equivalent.

b To prepare tables for operations thatexceed the ceiling specified in relevantregulations, and to take the necessarymeasures to safeguard these tables, inorder to make them available, on request,to internal auditing officers or bankauditors, or to the Special InvestigationCommission

c To report to the Compliance Unit, throughthe officer responsible for operationscontrol at the branch, any doubtful cashdeposit that may involve money laun-dering operations.

7 Regarding the Check Section Chief:

a To give caution and attention to checksendorsed to a third party and to bankchecks that are not deposited by the firstbeneficiary, as well as to traveler's checksand checks issued by institutions in for-eign countries, in addition to those inwhich the identity of the account's holderis not specified.

b To report to the Compliance Unit, throughthe officer responsible for operationscontrol at the branch, any check deemedsuspicious.

c To make sure that checks are not creditedto clients' accounts before being effec-tively collected from the issuing banks.

8 Regarding the Branch Director:

a To perform, when necessary, the functionsof the officer responsible for operationscontrol at the branch.

b To review account opening operations,and to approve exemptions granted tocertain clients regarding the filling of cashtransaction slips.

c To coordinate with the Credit Directorconcerning debit accounts, and with theBranches Director concerning credit ac-counts.

d To make periodical visits to debtor clientsto take cognizance of their business. And,also, to prepare reports about creditor

e To submit periodical reports to the Boardof Directors on the operations that appearto imply suspicious operation risks.

3 Regarding the Internal Audit Unit:

a To audit cash operations, transfers, andaccount movements.

b To ascertain that concerned branches andsections are complying with the proce-dure guide on the implementation of legaland regulatory texts for fighting moneylaundering, and that the KYC forms areproperly filled.

c To report discrepancies to the appointedauditor, through periodical reports.

4 Regarding the Officer responsible for opera-tions control at the branch either the branch'sdirector or the operations manager:

a To ascertain that the branch's employeesare complying with the procedure guide onthe implementation of legal and reg-ulatory texts for fighting money launder-ing, and that the KYC forms are properlyfilled.

b To control cash operations, transfers, andany other account-related operations.

c To report any suspicious operations to theCompliance Unit.

5 Regarding the Transfers Section Chief:

a To verify transfers credited to clients' ac-counts as well as electronic transfers,which exceed a certain amount and do notfollow a usual pattern, when consideringthe nature and size of the client's activi-ties. Also, to verify the accounts fromwhich recurrent or unusual transfers aremade, and to ascertain the integrity ofthese transfers in relation to the veracityof their sources.

b To report to the Compliance Unit, throughthe officer responsible for operations con-trol at the branch, any doubtful transferthat may involve suspicious money laun-dering operations.

6 Regarding the Cashier:

a To require from clients, with the excep-tion of those exempted, to fill the cash

3. The "National Committee"3. The "National Committee"clients when having doubts that move-ments in their accounts may conceal sus-picious money laundering operations, andto submit copies of these reports to theCompliance Unit.

Each bank/financial institution must:

1 Establish a central archive of collected infor-mation on money laundering operations andthe means to fight them, and to safeguardthis information in order to make it available,on demand, to internal auditing officers,bank auditors, or the Special InvestigationCommission.

2 Ensure an ongoing training of their staff andthe participation of the officers responsiblefor operation control and for training inrelevant seminars, workshops and lectures,so that they may keep abreast of moneylaundering-fighting methods.

The auditor of the bank/financial institution must:

1 Review the internal auditing procedures forascerta in ing compl iance by the bank/financial institution with the provisions ofthese Regulations. In this respect, the auditorshall prepare a semi-annual report to besubmitted to the board of directors of thebank/financial institution, to the Governor ofthe Banque du Liban, and to the BankingControl Commission. In addition to the re-sults of the auditor's review and to the rec-ommendations on ways to enhance oper-ationcontrol, the said report shall include detailedinformation about the verification of compli-ance by the bank/financial institution with theobligations hereafter mentioned for indicativepurposes but not restrictively:

a To comply with the provisions of Articles 3,4, 6, 7, 10, 11, and 12 of these Regulations.

b To fill the KYC forms.

c To adopt a policy and written proceduresconcerning the acceptance and opening ofnew clients' accounts.

Section V Final Provisions

Article 12

Article 13

�

�

d To enquire about the source of receivedfunds and their final destination, and aboutthe reasons of cash operations, as specifiedin the Law on fighting money launderingand in these Regulations; to set ceilings forcash deposits and withdrawals, and fortransfers from abroad, operations to begiven due caution and attention; and toadopt deposit forms that show the sourceof deposited funds, when a deposit or thetotal of several deposits exceed the speci-fied ceiling.

e To prepare periodical reports (every quar-ter, at least) on cash deposit and with-drawal operations, and on transfers toclients' accounts. These reports should bereviewed by management officers and bythe internal auditing unit.

f To include, in the adopted, internal audit-ing procedures, specific measures for re-viewing compliance with the said proce-dures.

2 Report immediately to the Governor ofBanque du Liban, in his capacity as chairmanof the forementioned Special InvestigationCommission, any violation of the provisionsof these Regulations.

24

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

Following the de-listing of June 2002 and aimingat fostering inter-agency cooperation, the SICproposed to the Government the establishmentof a national committee on coordinating policiesconcerning the fight against money laundering.

On October 24, 2002 the Lebanese Council ofMinisters decided the creation of a “NationalCommittee” with main objectives being: The co-ordination of policies among respective author-ities involved in the combating of money laun-dering, exchanging of information and expertiseaimed at reinforcing the implementation of theAML regime, organizing pertinent seminars andtraining courses, discussing ways and means toupgrade the quality of work at concerned author-ities and recommending applicable measures torelevant authorities.

The National Committee which held its firstmeeting on December 20, 2002 is chaired by oneof BDL's Vice Governors nominated by theGovernor, and comprises the following members:

25

1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G

�

��

��

��

��

SIC Secretary

General Prosecutor representative

Banking Control Commission Member

Customs representative

Lebanese Internal Security Forcesrepresentative.

3. The "National Committee"3. The "National Committee"clients when having doubts that move-ments in their accounts may conceal sus-picious money laundering operations, andto submit copies of these reports to theCompliance Unit.

Each bank/financial institution must:

1 Establish a central archive of collected infor-mation on money laundering operations andthe means to fight them, and to safeguardthis information in order to make it available,on demand, to internal auditing officers,bank auditors, or the Special InvestigationCommission.

2 Ensure an ongoing training of their staff andthe participation of the officers responsiblefor operation control and for training inrelevant seminars, workshops and lectures,so that they may keep abreast of moneylaundering-fighting methods.

The auditor of the bank/financial institution must:

1 Review the internal auditing procedures forascerta in ing compl iance by the bank/financial institution with the provisions ofthese Regulations. In this respect, the auditorshall prepare a semi-annual report to besubmitted to the board of directors of thebank/financial institution, to the Governor ofthe Banque du Liban, and to the BankingControl Commission. In addition to the re-sults of the auditor's review and to the rec-ommendations on ways to enhance oper-ationcontrol, the said report shall include detailedinformation about the verification of compli-ance by the bank/financial institution with theobligations hereafter mentioned for indicativepurposes but not restrictively:

a To comply with the provisions of Articles 3,4, 6, 7, 10, 11, and 12 of these Regulations.

b To fill the KYC forms.

c To adopt a policy and written proceduresconcerning the acceptance and opening ofnew clients' accounts.

Section V Final Provisions

Article 12

Article 13

�

�

d To enquire about the source of receivedfunds and their final destination, and aboutthe reasons of cash operations, as specifiedin the Law on fighting money launderingand in these Regulations; to set ceilings forcash deposits and withdrawals, and fortransfers from abroad, operations to begiven due caution and attention; and toadopt deposit forms that show the sourceof deposited funds, when a deposit or thetotal of several deposits exceed the speci-fied ceiling.

e To prepare periodical reports (every quar-ter, at least) on cash deposit and with-drawal operations, and on transfers toclients' accounts. These reports should bereviewed by management officers and bythe internal auditing unit.

f To include, in the adopted, internal audit-ing procedures, specific measures for re-viewing compliance with the said proce-dures.

2 Report immediately to the Governor ofBanque du Liban, in his capacity as chairmanof the forementioned Special InvestigationCommission, any violation of the provisionsof these Regulations.

24

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

Following the de-listing of June 2002 and aimingat fostering inter-agency cooperation, the SICproposed to the Government the establishmentof a national committee on coordinating policiesconcerning the fight against money laundering.

On October 24, 2002 the Lebanese Council ofMinisters decided the creation of a “NationalCommittee” with main objectives being: The co-ordination of policies among respective author-ities involved in the combating of money laun-dering, exchanging of information and expertiseaimed at reinforcing the implementation of theAML regime, organizing pertinent seminars andtraining courses, discussing ways and means toupgrade the quality of work at concerned author-ities and recommending applicable measures torelevant authorities.

The National Committee which held its firstmeeting on December 20, 2002 is chaired by oneof BDL's Vice Governors nominated by theGovernor, and comprises the following members:

25

1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G1 . P R O C E D U R E S A D O P T E D B Y L E B A N O N I N T H E F I G H T A G A I N S T M O N E Y L A U N D E R I N G

�

��

��

��

��

SIC Secretary

General Prosecutor representative

Banking Control Commission Member

Customs representative

Lebanese Internal Security Forcesrepresentative.

Chapter Two

Structure and Functions

of the SIC

Chapter Two

Structure and Functions

of the SIC

1. Organization Chart1. Organization Chart

The Governor of Banque du Liban

The President of the Banking Control Commission

The Judge appointed to the Higher Banking Commission

A professional individual appointed by the Council of Ministers

Mr. Riad Salamé

Mr. Walid Alameddine

Mr. Shebib Mokalled

Mr. Joseph Antakli

Chairman

Member

Member

Member

FinancialInvestigation

AdministrativeUnit

Mr. Ibrahim Homsi

Manager

ComplianceUnit

Audit InvestigationUnit

&

29

SecretaryMr. Muhammad Baasiri

I.T. SecurityUnit

&

2 . S T R U C T U R E A N D F U N C T I O N S O F T H E S I C2 . S T R U C T U R E A N D F U N C T I O N S O F T H E S I C

Mr. Hisham Hamzé

Manager

Mr. Tarek Zahran

Manager

Mr. Elias Osta

Manager

1 The Special Investigation Commission is composed of:

Mr. RiadSalamé

Mr. Walid Alameddine

Mr. Shebib Moukalledjudge Mr. Ahmad Al-Moallem.

Mr. Joseph AntakliMr. Jean Moubarak.

2 Article 6 of Law 318 of April 20, 2001 specifies the mission andtasks of the Commission as follows:

The Governor of Banque du Liban,, or the Vice-Governor designated by him. Chairman

The President of the Banking Control Commission,, or the member of the

Commission designated by him. Member

The judge appointed to the Higher BankingCommission, , or hisalternate Member

The attorney appointed by the Council ofMinisters, , or his alternateattorney Member

To investigate operations that are suspected to be money launderingoffenses, and to decide on the seriousness of evidence and circum-stantial evidence related to any such offense or offenses.

When accounts opened at banks or financial institutions are sus-pected to have been used for money laundering purposes, the liftingof banking secrecy to the benefit of the competent judicial authoritiesand the Higher Banking Commission, represented by its Chairman, isthe exclusive right of the Commission.

The Commission is convened by the Chairman and meets, at least,twice a month and as needed. The legal quorum requires the presenceof at least three members.

The Commission takes its decisions at a majority of the attendingmembers. In case of a tie, the Chairman has a deciding vote.

�

�

�

�

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

30 31

In reference to Law 318 of April 20, 2001 and SIC decision of July 4,2001, the Secretariat was organized as follows:

The Special Investigation Commission appointed Dr. Muhammad BaasiriSecretary of the Commission, beginning September 1, 2001.

The Secretary is entrusted with tasks that include:

Forwarding the Commission's decisions to concerned parties.

Implementing and following up the Commission's decisions.

Investigating the suspected account(s) on behalf of the Commission.

Producing analytical reports on suspected account(s).

Observing domestic and foreign laws and regulations, and makingrecommendations on updating laws and regulations enforced inLebanon for fighting money laundering offenses, if warranted.

Submitting to the Commission recommendations on updating theRegulations on the control of financial and banking operations forfighting money laundering.

Submitting to the Commission recommendations concerning theintroduction of internal auditing procedures to all sectors, namely inagriculture, industry, trade and services, for the purpose of preventingmoney laundering activities in the said sectors.

Supervising directly:

- The Audit and Investigation Unit

- The Financial Investigation Administrative Unit

- The Compliance Unit

- The Information Technology and Security Unit.

This Unit includes ten staff members.

This unit is entrusted with tasks that include:

Gathering evidence on operations that may constitute money laun-dering offenses.

Verifying and investigating information provided by the FinancialInvestigation Administrative Unit.

Secretary

1 Audit and Investigation Unit

�

�

�

�

�

�

�

�

�

�

3. Secretariat3. Secretariat2. Commission Members2. Commission Members

2 . S T R U C T U R E A N D F U N C T I O N S O F T H E S I C2 . S T R U C T U R E A N D F U N C T I O N S O F T H E S I C

1 The Special Investigation Commission is composed of:

Mr. RiadSalamé

Mr. Walid Alameddine

Mr. Shebib Moukalledjudge Mr. Ahmad Al-Moallem.

Mr. Joseph AntakliMr. Jean Moubarak.

2 Article 6 of Law 318 of April 20, 2001 specifies the mission andtasks of the Commission as follows:

The Governor of Banque du Liban,, or the Vice-Governor designated by him. Chairman

The President of the Banking Control Commission,, or the member of the

Commission designated by him. Member

The judge appointed to the Higher BankingCommission, , or hisalternate Member

The attorney appointed by the Council ofMinisters, , or his alternateattorney Member

To investigate operations that are suspected to be money launderingoffenses, and to decide on the seriousness of evidence and circum-stantial evidence related to any such offense or offenses.

When accounts opened at banks or financial institutions are sus-pected to have been used for money laundering purposes, the liftingof banking secrecy to the benefit of the competent judicial authoritiesand the Higher Banking Commission, represented by its Chairman, isthe exclusive right of the Commission.

The Commission is convened by the Chairman and meets, at least,twice a month and as needed. The legal quorum requires the presenceof at least three members.

The Commission takes its decisions at a majority of the attendingmembers. In case of a tie, the Chairman has a deciding vote.

�

�

�

�

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

30 31

In reference to Law 318 of April 20, 2001 and SIC decision of July 4,2001, the Secretariat was organized as follows:

The Special Investigation Commission appointed Dr. Muhammad BaasiriSecretary of the Commission, beginning September 1, 2001.

The Secretary is entrusted with tasks that include:

Forwarding the Commission's decisions to concerned parties.

Implementing and following up the Commission's decisions.

Investigating the suspected account(s) on behalf of the Commission.

Producing analytical reports on suspected account(s).

Observing domestic and foreign laws and regulations, and makingrecommendations on updating laws and regulations enforced inLebanon for fighting money laundering offenses, if warranted.

Submitting to the Commission recommendations on updating theRegulations on the control of financial and banking operations forfighting money laundering.

Submitting to the Commission recommendations concerning theintroduction of internal auditing procedures to all sectors, namely inagriculture, industry, trade and services, for the purpose of preventingmoney laundering activities in the said sectors.

Supervising directly:

- The Audit and Investigation Unit

- The Financial Investigation Administrative Unit

- The Compliance Unit

- The Information Technology and Security Unit.

This Unit includes ten staff members.

This unit is entrusted with tasks that include:

Gathering evidence on operations that may constitute money laun-dering offenses.

Verifying and investigating information provided by the FinancialInvestigation Administrative Unit.

Secretary

1 Audit and Investigation Unit

�

�

�

�

�

�

�

�

�

�

3. Secretariat3. Secretariat2. Commission Members2. Commission Members

2 . S T R U C T U R E A N D F U N C T I O N S O F T H E S I C2 . S T R U C T U R E A N D F U N C T I O N S O F T H E S I C

� Submitting to the Commission, through the Secretary, the findings oftheir investigations on operations suspected to be involving moneylaundering.

This Unit includes six staff members.

This unit is entrusted with tasks that include:

Receiving and collecting information from various sources concern-ing suspicious transactions.

Incorporating, archiving and analyzing this information through spe-cific programs, and comparing it with formerly available information.

Submitting to the Secretary information on suspected operations, forverification and investigation.

Establishing a databank organized by sector, geographic distribution,and by names of persons involved or possibly involved in money laun-dering operations. This also includes data on information sources andon the nature of suspected operations.

Updating this databank with respect to rulings and related documentsconcerning the persons who committed such offenses in Lebanon.

Preparing periodic reports on the nature and size of received informa-tion and on the results of information analysis, and submitting thesereports to the Commission through the Secretary.

Classifying according to sources, the information related to moneylaundering operations:

a Information received from banks and finance companies, whichare covered by the Banking Secrecy Law, may be provided todomestic or foreign competent authorities only by a decision ofthe Commission.

b Information received from institutions that are not covered by theBanking Secrecy Law may be provided to requesting authorities inaccordance with procedures decided by the Commission.

Monitoring domestic and foreign laws and regulations, and making recom-mendationsonupdatingthe relevantexisting lawsandregulations.

Coordinating with the Information Technology and Security Unit onbuilding and updating a website on fighting money laundering

Submitting to the Commission recommendations on updating theRegulations on the Control of Financial and Banking Operations forFighting Money Laundering.

2 Financial Investigation Administrative Unit

�

�

�

�

�

�

�

�

�

�

�

Following up on the findings of investigations, and safeguarding rele-vant information on computers.

�

32

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

33

�

�

�

�

�

�

Undertaking studies requested by the Commission.

Enhancing cooperation with foreign institutions and counterparts.

Submitting to the Commission, through the Secretary, an analyticalreport on suspected account(s).

Submitting to the Commission recommendations on ways to intro-duce internal auditing procedures to all sectors, namely in agriculture,industry, trade and services, in order to prevent the introduction ofmoney laundering practices to these sectors

3 Compliance Unit

This unit is entrusted with tasks that include:

A

This unit includes nine staff members.

uditing and examining banks, finance companies and other report-ing entities to ensure compliance with:

1 Law No. 318 on Fighting Money Laundering

2 The Regulations on the Control of Financial and Banking Ope-rations for Fighting Money Laundering (Banque du Liban Circular83 and its amendments)

3 Special Investigation Commission Circulars

4 Banque du Liban prospective Circulars on Fighting Money Laun-dering.

Preparing reports and periodic statistical data that reflect complianceof banks, finance companies and other reporting entities with theAnti-Money Laundering Law, the Regulations on the Control ofFinancial and Banking Operations For Fighting Money Laudering andwith other related Circulars and to inform the Commission throughthe Secretary of its findings.

�

�

�

�

�

Requesting, through the Secretary, that banks, finance companies andother reporting entities take corrective measures when instances ofnon-compliance or partial compliance are noted and follow up on theimplementation of the required corrective measures.

Providing the FIAU with summaries of compliance reports, to beentered on their databank.

Advising the AIU of the compliance status of banks, finance companiesand other reporting entities when investigations in operations thatmight conceal money laundering are initiated at those entities.

Suggesting procedural measures to the Secretary aimed at enhancingsupervision.

Submitting to the Commission, through the Secretary, suggestions toamend or develop regulations pertaining to the Control of Financial andBanking Operations For Fighting Money Laudering.

4

2 . S T R U C T U R E A N D F U N C T I O N S O F T H E S I C2 . S T R U C T U R E A N D F U N C T I O N S O F T H E S I C

� Submitting to the Commission, through the Secretary, the findings oftheir investigations on operations suspected to be involving moneylaundering.

This Unit includes six staff members.

This unit is entrusted with tasks that include:

Receiving and collecting information from various sources concern-ing suspicious transactions.

Incorporating, archiving and analyzing this information through spe-cific programs, and comparing it with formerly available information.

Submitting to the Secretary information on suspected operations, forverification and investigation.

Establishing a databank organized by sector, geographic distribution,and by names of persons involved or possibly involved in money laun-dering operations. This also includes data on information sources andon the nature of suspected operations.

Updating this databank with respect to rulings and related documentsconcerning the persons who committed such offenses in Lebanon.

Preparing periodic reports on the nature and size of received informa-tion and on the results of information analysis, and submitting thesereports to the Commission through the Secretary.

Classifying according to sources, the information related to moneylaundering operations:

a Information received from banks and finance companies, whichare covered by the Banking Secrecy Law, may be provided todomestic or foreign competent authorities only by a decision ofthe Commission.

b Information received from institutions that are not covered by theBanking Secrecy Law may be provided to requesting authorities inaccordance with procedures decided by the Commission.

Monitoring domestic and foreign laws and regulations, and making recom-mendationsonupdatingthe relevantexisting laws and regulations.

Coordinating with the Information Technology and Security Unit onbuilding and updating a website on fighting money laundering

Submitting to the Commission recommendations on updating theRegulations on the Control of Financial and Banking Operations forFighting Money Laundering.

2 Financial Investigation Administrative Unit

�

�

�

�

�

�

�

�

�

�

�

Following up on the findings of investigations, and safeguarding rele-vant information on computers.

�

32

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

33

�

�

�

�

�

�

Undertaking studies requested by the Commission.

Enhancing cooperation with foreign institutions and counterparts.

Submitting to the Commission, through the Secretary, an analyticalreport on suspected account(s).

Submitting to the Commission recommendations on ways to intro-duce internal auditing procedures to all sectors, namely in agriculture,industry, trade and services, in order to prevent the introduction ofmoney laundering practices to these sectors

3 Compliance Unit

This unit is entrusted with tasks that include:

A

This unit includes nine staff members.

uditing and examining banks, finance companies and other report-ing entities to ensure compliance with:

1 Law No. 318 on Fighting Money Laundering

2 The Regulations on the Control of Financial and Banking Ope-rations for Fighting Money Laundering (Banque du Liban Circular83 and its amendments)

3 Special Investigation Commission Circulars

4 Banque du Liban prospective Circulars on Fighting Money Laun-dering.

Preparing reports and periodic statistical data that reflect complianceof banks, finance companies and other reporting entities with theAnti-Money Laundering Law, the Regulations on the Control ofFinancial and Banking Operations For Fighting Money Laudering andwith other related Circulars and to inform the Commission throughthe Secretary of its findings.

�

�

�

�

�

Requesting, through the Secretary, that banks, finance companies andother reporting entities take corrective measures when instances ofnon-compliance or partial compliance are noted and follow up on theimplementation of the required corrective measures.

Providing the FIAU with summaries of compliance reports, to beentered on their databank.

Advising the AIU of the compliance status of banks, finance companiesand other reporting entities when investigations in operations thatmight conceal money laundering are initiated at those entities.

Suggesting procedural measures to the Secretary aimed at enhancingsupervision.

Submitting to the Commission, through the Secretary, suggestions toamend or develop regulations pertaining to the Control of Financial andBanking Operations For Fighting Money Laudering.

4

2 . S T R U C T U R E A N D F U N C T I O N S O F T H E S I C2 . S T R U C T U R E A N D F U N C T I O N S O F T H E S I C

� Submitting to the Commission, through the Secretary, recommenda-tions on ways to introduce internal audit procedures to all sectors,namely into agriculture, industry, trade and services, in order to preventthe introduction of money laundering practices to these sectors.

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

34

4 Information Technology and Security Unit

This unit includes seven staff members.

This unit is entrusted with tasks that include:

Developing the required application system.

Maintaining and developing programs in-line with the evolvingwork and needs of the various units.

Setting up information programs, security procedures, and ensuringtheir efficiency.

Controlling access to the SIC Secretariat offices.

Operating and managing the monitoring system.

Maintaining security and ensuring the safety of staff and assets.

Providing technical help in building website.

�

�

�

�

�

�

�

Chapter Three

Activities of the SIC

Chapter Three

Activities of the SIC

� Submitting to the Commission, through the Secretary, recommenda-tions on ways to introduce internal audit procedures to all sectors,namely into agriculture, industry, trade and services, in order to preventthe introduction of money laundering practices to these sectors.

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

34

4 Information Technology and Security Unit

This unit includes seven staff members.

This unit is entrusted with tasks that include:

Developing the required application system.

Maintaining and developing programs in-line with the evolvingwork and needs of the various units.

Setting up information programs, security procedures, and ensuringtheir efficiency.

Controlling access to the SIC Secretariat offices.

Operating and managing the monitoring system.

Maintaining security and ensuring the safety of staff and assets.

Providing technical help in building website.

�

�

�

�

�

�

�

Chapter Three

Activities of the SIC

Chapter Three

Activities of the SIC

37

3 . A C T I V I T I E S O F T H E S I C3 . A C T I V I T I E S O F T H E S I C

2. SIC Units

The SIC has worked hard throughout year 2002 to enhance the AMLregime in Lebanon taking into account the recommendations of theFATF's Africa Middle East Review Group. Coordination between theSIC and other concerned government agencies particularly police andcustoms was high on our agenda. Today we can proudly say that aneffective mechanism for coordination is shaping up with two AMLunits set up at police and customs.

The persistence of the SIC and the commitment of the LebaneseGovernment and Parliament to the fight against money laundering isreflected in the expected enactment of certain amendments toLaw No. 318 and in the establishment of the “National Committee”that would indulge in policy coordination on a national level thusensuring an effective AML regime in Lebanon.

At a stronger pace, hard work continued as usual at the SIC Units.Throughout 2002, the Audit and Investigation Unit investigated103 cases, 55 of which were foreign and 35 cases are currentlyunder investigation. New measures aiming at increasing efficiencyand producing timely results were adopted including the use ofMicrosoft Visio to flowchart movement of funds relating to casesinvestigated.

The Financial Investigation Administrative Unit developed a systemthat would monitor unusual growth in banks' and major moneydealers' balance sheets for the purpose of identifying trigger pointsfor suspicious activities. This Unit also entered all cases received onits application system “SIERS” enabling the generation of usefulstatistical data.

Recognizing the importance of AML Compliance examination, theSIC awards this matter much importance. Compliance examinationof banks, financial institutions and other reporting entities origin-ally started as a function assigned to the Audit and InvestigationUnit. In May 2002, the “Compliance Unit” was set up and the saidfunction was officially assigned to it. This Unit which is currentlystaffed with nine professionals proved to be a major catalyst in

a Audit Investigation Unit

b Financial Investigation Administrative Unit

c Compliance Unit

&

2. SIC Units

1. Enhancing the AML Regime1. Enhancing the AML Regime

3938

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

5. Staff Training5. Staff Training

3. Creating Awareness

advancing the work at the SIC, as it aims at assessing the adequacyof systems of internal controls with respect to AML proceduresadopted at banks, financial institutions and other reporting entities.In doing so, on-site compliance examinations based on samplingtechniques in line with ML warning signs are carried out in order toassess awareness levels of management and to ensure complianceof reporting entities with AML regulations.

In this regard, it is worth mentioning that the SIC, based oncompliance examination results, has required certain correctivemeasures to be adopted by non-compliant reporting entities.Moreover, the Compliance Unit has taken a proactive stance andthus been able to generate several STRs.

The IT Security Unit finalized the SIC “Disaster Recovery Plan”,upgraded the application system “SIERS”, built state of the artnetwork architecture and revamped the SIC website to make itmore user-friendly.

Throughout the year, the SIC continued efforts of promoting aware-ness in the business community and in Lebanon at large. The seminarsorganized by Banque du Liban and the SIC, the revamping of the SICwebsite, and the presentations made by the Secretary were effectivetools in spreading the necessary awareness. Compliance examinationof reporting entities contributed significantly to this process.

The number and quality of cases received in the year 2002 confirmthat the above steps have paid off handsomely. The number of casesincreased several folds over last year and closed at 138 cases comparedto 29 received in 2001.

Continuing the practice of international cooperation, the SIC passed onresults of investigations of foreign cases to the inquiring authorities.MOUs with several FIUs were signed and several others are expected tobe signed during year 2003. The Secretary paid visits to many FIUs andother foreign competent authorities engaged in the combating ofmoney laundering for the purpose of establishing face-to-face contacts.Believing in the importance of joining forces, the SIC applied to jointhe Egmont Group of FIUs and as such received a delegation from

d IT and Security Unit

&

TRACFIN (SIC sponsor) for the purpose of assessing its operationsfollowing a practice concerning prospective members. The SIC looksforward to becoming a full member in July 2003.

Training of staff progressed aggressively during the year with allprofessional staff attending seminars, undergoing on-job training withwell-recognized foreign institutions and visiting foreign FIUs. The visitsincluded: FinCEN, the U.S. Federal Reserve, TRACFIN, NCIS, CTIF-CFI,MOT and BKA in addition to attending the October Egmont seminarthat took place in Oaxaca Mexico. Arrangements are made withseveral FIUs to receive our staff for seminars and on-job training inyear 2003.

In order to meet the increasing challenges, nine professional staff wererecruited and allocated to the SIC Units. The new staff are universitygraduates; some have experience in fields such as accounting, finance,legal and information technology. They all join the training programsthat are in place, both locally and abroad.

Embezzlement of Private Funds

In May 2002, the SIC received through the General Prosecutor's Officea letter from a foreign competent authority requesting assistance in anon-going investigation involving a number of individuals and entitiesthat committed offenses and conspired to defraud, obtain moneytransfers by deceptive methods and launder money. Funds weretransferred to an account maintained with a Lebanese bank.

After investigating the case, the SIC decided in June2002 thefollowing:

1 Lift banking secrecy on the concerned accounts.

2 Transmit a certified copy of the decision to the:

General Prosecutor

Concerned Banks

Concerned party, including the foreign authority.

The SIC forwarded copies of the investigation report to the GeneralProsecutor and foreign authority.

4. International Cooperation4. International Cooperation

3. Creating Awareness

3 . A C T I V I T I E S O F T H E S I C3 . A C T I V I T I E S O F T H E S I C

6. Selection of Typologies6. Selection of Typologies

3938

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

5. Staff Training5. Staff Training

3. Creating Awareness

advancing the work at the SIC, as it aims at assessing the adequacyof systems of internal controls with respect to AML proceduresadopted at banks, financial institutions and other reporting entities.In doing so, on-site compliance examinations based on samplingtechniques in line with ML warning signs are carried out in order toassess awareness levels of management and to ensure complianceof reporting entities with AML regulations.

In this regard, it is worth mentioning that the SIC, based oncompliance examination results, has required certain correctivemeasures to be adopted by non-compliant reporting entities.Moreover, the Compliance Unit has taken a proactive stance andthus been able to generate several STRs.

The IT Security Unit finalized the SIC “Disaster Recovery Plan”,upgraded the application system “SIERS”, built state of the artnetwork architecture and revamped the SIC website to make itmore user-friendly.

Throughout the year, the SIC continued efforts of promoting aware-ness in the business community and in Lebanon at large. The seminarsorganized by Banque du Liban and the SIC, the revamping of the SICwebsite, and the presentations made by the Secretary were effectivetools in spreading the necessary awareness. Compliance examinationof reporting entities contributed significantly to this process.

The number and quality of cases received in the year 2002 confirmthat the above steps have paid off handsomely. The number of casesincreased several folds over last year and closed at 138 cases comparedto 29 received in 2001.

Continuing the practice of international cooperation, the SIC passed onresults of investigations of foreign cases to the inquiring authorities.MOUs with several FIUs were signed and several others are expected tobe signed during year 2003. The Secretary paid visits to many FIUs andother foreign competent authorities engaged in the combating ofmoney laundering for the purpose of establishing face-to-face contacts.Believing in the importance of joining forces, the SIC applied to jointhe Egmont Group of FIUs and as such received a delegation from

d IT and Security Unit

&

TRACFIN (SIC sponsor) for the purpose of assessing its operationsfollowing a practice concerning prospective members. The SIC looksforward to becoming a full member in July 2003.

Training of staff progressed aggressively during the year with allprofessional staff attending seminars, undergoing on-job training withwell-recognized foreign institutions and visiting foreign FIUs. The visitsincluded: FinCEN, the U.S. Federal Reserve, TRACFIN, NCIS, CTIF-CFI,MOT and BKA in addition to attending the October Egmont seminarthat took place in Oaxaca Mexico. Arrangements are made withseveral FIUs to receive our staff for seminars and on-job training inyear 2003.

In order to meet the increasing challenges, nine professional staff wererecruited and allocated to the SIC Units. The new staff are universitygraduates; some have experience in fields such as accounting, finance,legal and information technology. They all join the training programsthat are in place, both locally and abroad.

Embezzlement of Private Funds

In May 2002, the SIC received through the General Prosecutor's Officea letter from a foreign competent authority requesting assistance in anon-going investigation involving a number of individuals and entitiesthat committed offenses and conspired to defraud, obtain moneytransfers by deceptive methods and launder money. Funds weretransferred to an account maintained with a Lebanese bank.

After investigating the case, the SIC decided in June2002 thefollowing:

1 Lift banking secrecy on the concerned accounts.

2 Transmit a certified copy of the decision to the:

General Prosecutor

Concerned Banks

Concerned party, including the foreign authority.

The SIC forwarded copies of the investigation report to the GeneralProsecutor and foreign authority.

4. International Cooperation4. International Cooperation

3. Creating Awareness

3 . A C T I V I T I E S O F T H E S I C3 . A C T I V I T I E S O F T H E S I C

6. Selection of Typologies6. Selection of Typologies

Organized Crime

Embezzlement of Public Funds

Drug Trafficking

In August 2002, the SIC received a request for assistance from aforeign judicial authority regarding individuals suspected oflaundering money into Lebanon in connection with illegal armstrafficking linked to diamond smuggling (Blood Diamond).

After investigating the case, the SIC decided in October 2002 thefollowing:

1 Lift banking secrecy on the related account.

2 Transmit a certified copy of the decision to the:

General Prosecutor

Concerned Bank

Concerned party, including the foreign judicialauthority.

The SIC forwarded copies of the investigation report to the GeneralProsecutor and foreign judicial authority.

In April 2002, a foreign government-owned bank requested theassistance of the SIC in a matter involving the embezzlement offunds and fraudulent activities committed by a previous managerwhere funds were transferred to accounts maintained at Lebanesebanks.

In July 2002, the SIC forwarded copies of the investigation report tothe General Prosecutor and the Embassy of the concerned Govern-ment after it decided in June 2002 the following:

1 Lift banking secrecy on related accounts

2 Transmit a certified copy of the decision to the:

General Prosecutor

Concerned Banks

Concerned party, including the requesting bank.

In February 2002, the General Prosecutor forwarded a request tothe SIC received from an Embassy in Lebanon for assistance in amoney laundering related case that involves the transfer of proceedsrelating to drug trafficking into accounts maintained at three banksin Lebanon, followed by transfers to foreign bank accounts.

40

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

41

Upon finalizing its investigations, the SIC decided in May 2002 thefollowing:

1 Lift banking secrecy on all related accounts.

2 Transmit a certified copy of the decision to the:

General Prosecutor

Concerned Banks

Concerned party, including the concerned Embassy.

The SIC forwarded copies of the investigation report to the GeneralProsecutor and the concerned Embassy.

On December 30, 2002 the General Prosecutor decided to forwardthis case to the Lebanese Criminal Court whereby the suspectswould be tried under Law 318.

In May 2002, the SIC received a suspicious transaction report from alocal bank informing it of a series of suspicious transfers receivedthrough a correspondent bank to the order of a client. Suspicion arosewhen the correspondent bank requested the return of three transferson the basis of unjust enrichment.

Upon the completion of its investigation, the SIC decided in Sep-tember 2002 the following:

1 Lift banking secrecy on the concerned accounts and to freezethem.

2 To transmit a certified copy of the decision to the:

General Prosecutor

Concerned Bank

Concerned party.

The SIC forwarded a copy of the investigation report to the GeneralProsecutor.

In February 2002, the SIC received a letter from an Embassy inLebanon enclosing a list that contains names of 21 terrorists, in whichit seeks the assistance of the SIC to identify and freeze the bankaccounts of the said terrorists.

The SIC asked the Secretary to investigate with all banks and financialinstitutions operating in Lebanon the existence of any accountbelonging directly or indirectly to the names contained in the list, so

Embezzlement of Private Funds

Terrorism

3 . A C T I V I T I E S O F T H E S I C3 . A C T I V I T I E S O F T H E S I C

Organized Crime

Embezzlement of Public Funds

Drug Trafficking

In August 2002, the SIC received a request for assistance from aforeign judicial authority regarding individuals suspected oflaundering money into Lebanon in connection with illegal armstrafficking linked to diamond smuggling (Blood Diamond).

After investigating the case, the SIC decided in October 2002 thefollowing:

1 Lift banking secrecy on the related account.

2 Transmit a certified copy of the decision to the:

General Prosecutor

Concerned Bank

Concerned party, including the foreign judicialauthority.

The SIC forwarded copies of the investigation report to the GeneralProsecutor and foreign judicial authority.

In April 2002, a foreign government-owned bank requested theassistance of the SIC in a matter involving the embezzlement offunds and fraudulent activities committed by a previous managerwhere funds were transferred to accounts maintained at Lebanesebanks.

In July 2002, the SIC forwarded copies of the investigation report tothe General Prosecutor and the Embassy of the concerned Govern-ment after it decided in June 2002 the following:

1 Lift banking secrecy on related accounts

2 Transmit a certified copy of the decision to the:

General Prosecutor

Concerned Banks

Concerned party, including the requesting bank.

In February 2002, the General Prosecutor forwarded a request tothe SIC received from an Embassy in Lebanon for assistance in amoney laundering related case that involves the transfer of proceedsrelating to drug trafficking into accounts maintained at three banksin Lebanon, followed by transfers to foreign bank accounts.

40

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

41

Upon finalizing its investigations, the SIC decided in May 2002 thefollowing:

1 Lift banking secrecy on all related accounts.

2 Transmit a certified copy of the decision to the:

General Prosecutor

Concerned Banks

Concerned party, including the concerned Embassy.

The SIC forwarded copies of the investigation report to the GeneralProsecutor and the concerned Embassy.

On December 30, 2002 the General Prosecutor decided to forwardthis case to the Lebanese Criminal Court whereby the suspectswould be tried under Law 318.

In May 2002, the SIC received a suspicious transaction report from alocal bank informing it of a series of suspicious transfers receivedthrough a correspondent bank to the order of a client. Suspicion arosewhen the correspondent bank requested the return of three transferson the basis of unjust enrichment.

Upon the completion of its investigation, the SIC decided in Sep-tember 2002 the following:

1 Lift banking secrecy on the concerned accounts and to freezethem.

2 To transmit a certified copy of the decision to the:

General Prosecutor

Concerned Bank

Concerned party.

The SIC forwarded a copy of the investigation report to the GeneralProsecutor.

In February 2002, the SIC received a letter from an Embassy inLebanon enclosing a list that contains names of 21 terrorists, in whichit seeks the assistance of the SIC to identify and freeze the bankaccounts of the said terrorists.

The SIC asked the Secretary to investigate with all banks and financialinstitutions operating in Lebanon the existence of any accountbelonging directly or indirectly to the names contained in the list, so

Embezzlement of Private Funds

Terrorism

3 . A C T I V I T I E S O F T H E S I C3 . A C T I V I T I E S O F T H E S I C

42

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

as to enable the Commission to take the appropriate decision in thisrespect.

In March 2002, the SIC communicated its findings to the concernedEmbassy stating that all banks and financial institutions operating inLebanon reported the non-existence of any account relating to thelist.

In April 2002, the SIC received a report from the Lebanese InternalSecurity Forces informing it of the arrest of individuals charged withcounterfeiting money.

The SIC asked the Secretary to investigate with all banks and financialinstitutions operating in Lebanon the existence of any accountsbelonging directly or indirectly to the suspects, so as to enable theCommission to take the appropriate decision in this respect.

After investigating the case, the SIC informed the General Prosecutorin June 2002 that all banks and financial institutions reported thenon-existence of any account relating to the concerned individuals.

Counterfeiting Money

Chapter Four

Statistical Data

Chapter Four

Statistical Data

42

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

as to enable the Commission to take the appropriate decision in thisrespect.

In March 2002, the SIC communicated its findings to the concernedEmbassy stating that all banks and financial institutions operating inLebanon reported the non-existence of any account relating to thelist.

In April 2002, the SIC received a report from the Lebanese InternalSecurity Forces informing it of the arrest of individuals charged withcounterfeiting money.

The SIC asked the Secretary to investigate with all banks and financialinstitutions operating in Lebanon the existence of any accountsbelonging directly or indirectly to the suspects, so as to enable theCommission to take the appropriate decision in this respect.

After investigating the case, the SIC informed the General Prosecutorin June 2002 that all banks and financial institutions reported thenon-existence of any account relating to the concerned individuals.

Counterfeiting Money

Chapter Four

Statistical Data

Chapter Four

Statistical Data

Foreign Cases 46% Local Cases 54%

1 . Cases Reported to the SIC1 . Cases Reported to the SIC

4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A

45

4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A

45

Local cases

Foreign cases

Total

24

0

100

0

No. of casesnot passed

on **

24

55

No. of casespassed on *

30

70

% oftotal

No. of casespending

27

8

77

23

24 10079 100 35 100

% oftotal

% oftotal

TotalNo. of

reportedcases

75

63

138 100

54

46

% oftotal

Pendingcases

Passed on

Pending cases

Not passed on

Passed on

** Cases decided not to fall within the framework of Law 318.

* Cases forwarded to the General Prosecutor or to reporting sources.

46

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N 4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A

47

4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A

2 . Cases where Banking Secrecy was Lifted2 . Cases where Banking Secrecy was Lifted 3 . Cases by Type of Reporting Source3 . Cases by Type of Reporting Source

Co

mm

erci

alb

anks

Fore

ign

gove

rnm

ents

(Em

bas

sies

)

FIU

s

Polic

e

Ind

ivid

ual

san

din

stit

uti

on

s

Jud

icia

lau

tho

riti

es

Reg

ula

tory

and

sup

ervi

sory

auth

ori

ties

Un

ited

Nat

ion

s/

Secu

rity

Co

un

cil

Mo

ney

dea

lers

Eu

rop

ean

Un

ion

Jew

eler

s0

5

15

25

35

45

55

10

20

30

40

50

60

Nu

mb

ero

fca

ses

Type of reporting sourceReported cases

Total

Number

50

23

23

19

6

5

3

4

2

2

1

138

2.17

% total

36.23

16.67

16.67

13.77

4.35

3.62

2.90

1.45

1.45

0.72

100

Jewelers

Money dealers

European Union

Individuals and institutions

Police

FIUs

Foreign governments (Embassies)Commercial banks

Regulatory and supervisory authorities

United Nations / Security Council

Judicial authorities

Banking Secrecy Lifted

Foreign Cases 53% Local Cases 47%

Banking Secrecy Not Lifted

Local

Foreign

Total

Reporting source

* Exclude 35 pending cases.

% bysource

reporting

50

100

77

% of total

47

53

100

Cases where bankingsecrecy was lifted

Number

103

48

55

Cases investigated*

24

55

79

Number

46

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N 4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A

47

4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A

2 . Cases where Banking Secrecy was Lifted2 . Cases where Banking Secrecy was Lifted 3 . Cases by Type of Reporting Source3 . Cases by Type of Reporting Source

Co

mm

erci

alb

anks

Fore

ign

gove

rnm

ents

(Em

bas

sies

)

FIU

s

Polic

e

Ind

ivid

ual

san

din

stit

uti

on

s

Jud

icia

lau

tho

riti

es

Reg

ula

tory

and

sup

ervi

sory

auth

ori

ties

Un

ited

Nat

ion

s/

Secu

rity

Co

un

cil

Mo

ney

dea

lers

Eu

rop

ean

Un

ion

Jew

eler

s0

5

15

25

35

45

55

10

20

30

40

50

60

Nu

mb

ero

fca

ses

Type of reporting sourceReported cases

Total

Number

50

23

23

19

6

5

3

4

2

2

1

138

2.17

% total

36.23

16.67

16.67

13.77

4.35

3.62

2.90

1.45

1.45

0.72

100

Jewelers

Money dealers

European Union

Individuals and institutions

Police

FIUs

Foreign governments (Embassies)Commercial banks

Regulatory and supervisory authorities

United Nations / Security Council

Judicial authorities

Banking Secrecy Lifted

Foreign Cases 53% Local Cases 47%

Banking Secrecy Not Lifted

Local

Foreign

Total

Reporting source

* Exclude 35 pending cases.

% bysource

reporting

50

100

77

% of total

47

53

100

Cases where bankingsecrecy was lifted

Number

103

48

55

Cases investigated*

24

55

79

Number

4

95

14

75

0 10 20 30 50 60

European Union

Local Sources

U.S. Embassy

United Nations /Security Council

40 70 80 90 100

5 . Cases Related to Terrorism5 . Cases Related to Terrorism

Embezzlement of public

funds

Embezzlement of private

Drugs

Terrorism

fundsCounterfeiting and forgery

Not classified

Organized crime

Illegal arms trade

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N 4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T AS P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N 4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A

4948

4 . Cases by Nature of Crime4 . Cases by Nature of Crime

Nature of crime

Drugs

Reported cases

Terrorism

Embezzlement of public funds

Embezzlement of private funds

Counterfeiting and forgery

Illegal arms trade

Not classified*

Total

% total

9

17

4

20

15

1

1

33

100

Organized crime

Number

13

24

6

28

20

1

1

138

45

No. of passed on No. of pendingTotal No. of receivedcases

4

15

3

2

24

names*

14

95

75

4

188

cases

3

13

3

1

20

names

12

89

75

1

177

cases

1

2

…

1

4

names

2

6

…

3

11

Source

United Nations /Security Council

US Embassy

European Union

Local

Total

* Some names are repeated in more than one case.

* Requested information or suspicion are not correlated to a specific crime.

Number of names

4

95

14

75

0 10 20 30 50 60

European Union

Local Sources

U.S. Embassy

United Nations /Security Council

40 70 80 90 100

5 . Cases Related to Terrorism5 . Cases Related to Terrorism

Embezzlement of public

funds

Embezzlement of private

Drugs

Terrorism

fundsCounterfeiting and forgery

Not classified

Organized crime

Illegal arms trade

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N 4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T AS P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N 4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A

4948

4 . Cases by Nature of Crime4 . Cases by Nature of Crime

Nature of crime

Drugs

Reported cases

Terrorism

Embezzlement of public funds

Embezzlement of private funds

Counterfeiting and forgery

Illegal arms trade

Not classified*

Total

% total

9

17

4

20

15

1

1

33

100

Organized crime

Number

13

24

6

28

20

1

1

138

45

No. of passed on No. of pendingTotal No. of receivedcases

4

15

3

2

24

names*

14

95

75

4

188

cases

3

13

3

1

20

names

12

89

75

1

177

cases

1

2

…

1

4

names

2

6

…

3

11

Source

United Nations /Security Council

US Embassy

European Union

Local

Total

* Some names are repeated in more than one case.

* Requested information or suspicion are not correlated to a specific crime.

Number of names

6 . Cases by Reporting Country*6 . Cases by Reporting Country* 7. Geographical Distribution of Local Cases7. Geographical Distribution of Local Cases

District

Beirut

Mount-Lebanon

North-Lebanon

South-Lebanon

Bekaa

Total

Number

54

3

5

9

4

75

% total

72

4

7

12

5

100

Reported cases

50

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N 4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A

51

Beirut

North-Lebanon

South-Lebanon

Bekaa

Mount-Lebanon

European Union

France

UAE

United Kingdom

United Nations

Australia

Belarus

Belgium

Brazil

Canada

Croatia

Mexico

Portugal

Switzerland

Reported casesCountry

United States

Total

Number

3

1

10

1

1

1

1

2

11

1

1

1

3

2

4

20

63

% total

4

2

16

2

2

2

2

3

17

2

2

2

4

3

6

31

100

Bulgaria

Portugal

Belarus

Belgium

BrazilBulgariaCanadaCroatia

European Union

FranceUAE

United Kingdom

United Nations

United States

Switzerland Mexico

Australia

* Foreign cases

6 . Cases by Reporting Country*6 . Cases by Reporting Country* 7. Geographical Distribution of Local Cases7. Geographical Distribution of Local Cases

District

Beirut

Mount-Lebanon

North-Lebanon

South-Lebanon

Bekaa

Total

Number

54

3

5

9

4

75

% total

72

4

7

12

5

100

Reported cases

50

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N 4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A

51

Beirut

North-Lebanon

South-Lebanon

Bekaa

Mount-Lebanon

European Union

France

UAE

United Kingdom

United Nations

Australia

Belarus

Belgium

Brazil

Canada

Croatia

Mexico

Portugal

Switzerland

Reported casesCountry

United States

Total

Number

3

1

10

1

1

1

1

2

11

1

1

1

3

2

4

20

63

% total

4

2

16

2

2

2

2

3

17

2

2

2

4

3

6

31

100

Bulgaria

Portugal

Belarus

Belgium

BrazilBulgariaCanadaCroatia

European Union

FranceUAE

United Kingdom

United Nations

United States

Switzerland Mexico

Australia

* Foreign cases

8 . STRs Received Monthly8 . STRs Received Monthly

52

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N 4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T AN

um

ber

of

STR

s

6 64 6

8 8

19 1918

2622

8

0

5

10

15

20

25

30

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Not coveredCovered (48 banks)

26%74%

Covered ( )44 companies Not covered

31%69%

Not coveredCovered (12 institutions)

9 . AML Compliance Examination Coverage9 . AML Compliance Examination Coverage

Banks

Insurance Companies

Financial Institutions

56%44%

53

8 . STRs Received Monthly8 . STRs Received Monthly

52

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N 4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A4 . S T A T I S T I C A L D A T A

Nu

mb

ero

fST

Rs

6 64 6

8 8

19 1918

2622

8

0

5

10

15

20

25

30

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Not coveredCovered (48 banks)

26%74%

Covered ( )44 companies Not covered

31%69%

Not coveredCovered (12 institutions)

9 . AML Compliance Examination Coverage9 . AML Compliance Examination Coverage

Banks

Insurance Companies

Financial Institutions

56%44%

53

54

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

Jewelers

20% 80%

Covered (76 jewelers) Not covered

Money Dealers

Covered (88 money dealers)* Not covered

76%24%

* Represents 75% of the market share. Annexes

Training & Seminars

Annexes

Training & Seminars

Annexes

Training & Seminars

Annexes

Training & Seminars

Annexes

Training & Seminars

Annexes

Training & Seminars

54

S P E C I A L I N V E S T I G A T I O N C O M M I S S I O NS P E C I A L I N V E S T I G A T I O N C O M M I S S I O N

Jewelers

20% 80%

Covered (76 jewelers) Not covered

Money Dealers

Covered (88 money dealers)* Not covered

76%24%

* Represents 75% of the market share. Annexes

Training & Seminars

Annexes

Training & Seminars

Annexes

Training & Seminars

Annexes

Training & Seminars

Annexes

Training & Seminars

Annexes

Training & Seminars

Members of the Syndicate of Insurance Companies,SIC Staff

Lebanese and Arab Bankers,

SIC Staff

Syndicate of Insurance Co. Money Laundering concerning Insurance Companies

Union of Arab Banks Warning Signs of Money Laundering and Lebanese Regulations withrespect to combating Money Laundering

Jan, 2002

March, 2002 BDL and Basle Committee onBanking Supervision

Operational Risk Management Bankers,SIC Staff

Banque du Liban Anti- Money Laundering Financial Institutions,

Financial Leasing companies,

Financial Crime Unit of the Lebanese Internal

Security Forces

July, 2002 Union of Arab Banks Banking and Economic Issues concerning Arab Banks Lebanese and Arab bankers,

(UAB) - Beirut Government and Central banks officials,

SIC Staff

Lebanon’s Banking ControlCommission in coordinationwith the BIS Financial StabilityInstitute

“Seminar on International Supervisory Development and Practice” Banking supervisors from Lebanon and theMiddle East region,

SIC Staff

Institute of Financial Affairsof the Ministry of Finance

- Lebanese Initiatives concerning the Combating of MoneyLaundering

Staff and officers of the various sections ofthe Ministry of Finance and Lebanese customs,

- Other related matters including steps taken by the SIC that led tothe de-listing of Lebanon from the NCCT list

SIC Staff

August, 2002 Discussion of recent AML procedures Syndicate Board members,

SIC Staff

October, 2002 Kaslik University (USEK) Alerting Students to Money Laundering Issues Students,SIC Staff

Association of Banks in Lebanon Money Laundering: Investigation, Compliance and Indicators Banks Compliance Officers,SIC Staff

November,2002

Lebanese InternalSecurity Forces

Spreading Awareness on Money Laundering Relating Issues LISF Officers,SIC Staff

June, 2002

Syndicate of MoneyDealers

Feb, 2002 Lebanese AmericanUniversity

Introducing the SIC and Lebanese Regulations

December,2002

U.S. Secret Service Combating Counterfeiting, Credit Card Fraud, Computer Fraudand Financial Institution Fraud

SIC Staff

Date Seminar/ Organizers Topic Participants

200 Students,SIC Staff

Date Seminar/ Organizers Topic Participants

ANNEX 1

LocalLocal

Training & SeminarsTraining & Seminars

57

Members of the Syndicate of Insurance Companies,SIC Staff

Lebanese and Arab Bankers,

SIC Staff

Syndicate of Insurance Co. Money Laundering concerning Insurance Companies

Union of Arab Banks Warning Signs of Money Laundering and Lebanese Regulations withrespect to combating Money Laundering

Jan, 2002

March, 2002 BDL and Basle Committee onBanking Supervision

Operational Risk Management Bankers,SIC Staff

Banque du Liban Anti- Money Laundering Financial Institutions,

Financial Leasing companies,

Financial Crime Unit of the Lebanese Internal

Security Forces

July, 2002 Union of Arab Banks Banking and Economic Issues concerning Arab Banks Lebanese and Arab bankers,

(UAB) - Beirut Government and Central banks officials,

SIC Staff

Lebanon’s Banking ControlCommission in coordinationwith the BIS Financial StabilityInstitute

“Seminar on International Supervisory Development and Practice” Banking supervisors from Lebanon and theMiddle East region,

SIC Staff

Institute of Financial Affairsof the Ministry of Finance

- Lebanese Initiatives concerning the Combating of MoneyLaundering

Staff and officers of the various sections ofthe Ministry of Finance and Lebanese customs,

- Other related matters including steps taken by the SIC that led tothe de-listing of Lebanon from the NCCT list

SIC Staff

August, 2002 Discussion of recent AML procedures Syndicate Board members,

SIC Staff

October, 2002 Kaslik University (USEK) Alerting Students to Money Laundering Issues Students,SIC Staff

Association of Banks in Lebanon Money Laundering: Investigation, Compliance and Indicators Banks Compliance Officers,SIC Staff

November,2002

Lebanese InternalSecurity Forces

Spreading Awareness on Money Laundering Relating Issues LISF Officers,SIC Staff

June, 2002

Syndicate of MoneyDealers

Feb, 2002 Lebanese AmericanUniversity

Introducing the SIC and Lebanese Regulations

December,2002

U.S. Secret Service Combating Counterfeiting, Credit Card Fraud, Computer Fraudand Financial Institution Fraud

SIC Staff

Date Seminar/ Organizers Topic Participants

200 Students,SIC Staff

Date Seminar/ Organizers Topic Participants

ANNEX 1

LocalLocal

Training & SeminarsTraining & Seminars

57

InternationalInternational

Training & SeminarsTraining & Seminars

59

ANNEX 2

BIBF (Bahrain Institute of Financial Issues in the Post September 11th Era FIAU Unit Head

Banking and Finance)

Feb, 2002 Federal Reserve Bank of Atlanta BSA Examination SIC Staff

FFIEC "Financial Crimes Seminar" SIC Staff

FinCEN One-day visit for the purpose of learning about FinCEN's operations SIC Staff

Mar, 2002 Arab Monetary Fund (AMF) andFinancial Stability Institute (FSI)

Fighting Money Laundering, Regional Experience KYC ControlFeatures and Examination Procedures

Banking Supervisors from Arab Countries,SIC Staff

TRACFIN System and Methods that employs in the Course ofTRACFIN Head of FIAU and IT Security Unit&Head of

Conducting its Operations

Federal Financial Institution Workshop on Advanced anti-Money Laundering SIC Staff

Examination Council

FinCEN One-day visit for the purpose of learning about FinCEN's operations SIC Staff

Federal Reserve Bank of Virginia BSA Examination SIC Staff

April, 2002 Union of Arab Banks (UAB) Compliance of Arab Banks with International Standards on Arab Bankers,

(Qatar) Combating Money Laundering and the Suppression of Financing Arab Government Officials,

of Terrorism SIC Secretary and AIU Head of Unit

Central Bank of Oman and "Focused Seminar on Supervisory Developments and Practices" KYC SIC Staff,

Financial Stability Institute and Procedures and Lebanon’s Experience in Combating Banking Supervisors from Arab Countries

GCC Committee of BankingSupervision

Money Laundering

International Information Systems Certified Information Systems Security Professional (CISSP) SIC StaffSecurity Certification Consortiom(ISC)

Jan, 2002

May, 2002 Central Bank of Syria Fighting Money Laundering Lebanese and Syrian Bankers,

SIC Staff

Central Bank of the United ArabEmirates in Abu-Dhabi

Hawala Representatives of international and regionalbodies, regulatory, law enforcement agencies,bankers and money dealers,

SIC Staff

June, 2002 FFIEC "Financial Crimes Seminar" SIC Staff

FinCEN One-day visit for the purpose of learning about FinCEN's operations SIC Staff

Federal Reserve Board The Bank Secrecy Act, Examination Process and Procedures SIC Staff

August, 2002 FFIEC "Financial Crimes Seminar" SIC Staff

FinCEN One-day visit for the purpose of learning about FinCEN's operations SIC Staff

Federal Reserve Board The Bank Secrecy Act, Examination Process and Procedures SIC Staff

October, 2002 TRACFINCommission Bancaire (France)Egmont Group of FIU's and GPMLMarcus EvansNCIS-ECU

Learning about its structure and operationsBank Policies and Procedures Concerning the KYC SubjectChallenges and issues on Money Laundering (training seminar)“Money Laundering and Financial Crime Prevention Strategies”Learning about its structure and operations

Head of AIU and Staff membersHead of AIU and Staff membersSIC SecretaryHead of FIAUHead of FIAU

November, TRACFIN Learning about its structure and operationsBank Policies and Procedures Concerning the KYC Subject

SIC staffSIC staff2002 Commission Bancaire (France)

Date Seminar/ Organizers Topic Participants

Date Seminar/ Organizers Topic Participants

InternationalInternational

Training & SeminarsTraining & Seminars

59

ANNEX 2

BIBF (Bahrain Institute of Financial Issues in the Post September 11th Era FIAU Unit Head

Banking and Finance)

Feb, 2002 Federal Reserve Bank of Atlanta BSA Examination SIC Staff

FFIEC "Financial Crimes Seminar" SIC Staff

FinCEN One-day visit for the purpose of learning about FinCEN's operations SIC Staff

Mar, 2002 Arab Monetary Fund (AMF) andFinancial Stability Institute (FSI)

Fighting Money Laundering, Regional Experience KYC ControlFeatures and Examination Procedures

Banking Supervisors from Arab Countries,SIC Staff

TRACFIN System and Methods that employs in the Course ofTRACFIN Head of FIAU and IT Security Unit&Head of

Conducting its Operations

Federal Financial Institution Workshop on Advanced anti-Money Laundering SIC Staff

Examination Council

FinCEN One-day visit for the purpose of learning about FinCEN's operations SIC Staff

Federal Reserve Bank of Virginia BSA Examination SIC Staff

April, 2002 Union of Arab Banks (UAB) Compliance of Arab Banks with International Standards on Arab Bankers,

(Qatar) Combating Money Laundering and the Suppression of Financing Arab Government Officials,

of Terrorism SIC Secretary and AIU Head of Unit

Central Bank of Oman and "Focused Seminar on Supervisory Developments and Practices" KYC SIC Staff,

Financial Stability Institute and Procedures and Lebanon’s Experience in Combating Banking Supervisors from Arab Countries

GCC Committee of BankingSupervision

Money Laundering

International Information Systems Certified Information Systems Security Professional (CISSP) SIC StaffSecurity Certification Consortiom(ISC)

Jan, 2002

May, 2002 Central Bank of Syria Fighting Money Laundering Lebanese and Syrian Bankers,

SIC Staff

Central Bank of the United ArabEmirates in Abu-Dhabi

Hawala Representatives of international and regionalbodies, regulatory, law enforcement agencies,bankers and money dealers,

SIC Staff

June, 2002 FFIEC "Financial Crimes Seminar" SIC Staff

FinCEN One-day visit for the purpose of learning about FinCEN's operations SIC Staff

Federal Reserve Board The Bank Secrecy Act, Examination Process and Procedures SIC Staff

August, 2002 FFIEC "Financial Crimes Seminar" SIC Staff

FinCEN One-day visit for the purpose of learning about FinCEN's operations SIC Staff

Federal Reserve Board The Bank Secrecy Act, Examination Process and Procedures SIC Staff

October, 2002 TRACFINCommission Bancaire (France)Egmont Group of FIU's and GPMLMarcus EvansNCIS-ECU

Learning about its structure and operationsBank Policies and Procedures Concerning the KYC SubjectChallenges and issues on Money Laundering (training seminar)“Money Laundering and Financial Crime Prevention Strategies”Learning about its structure and operations

Head of AIU and Staff membersHead of AIU and Staff membersSIC SecretaryHead of FIAUHead of FIAU

November, TRACFIN Learning about its structure and operationsBank Policies and Procedures Concerning the KYC Subject

SIC staffSIC staff2002 Commission Bancaire (France)

Date Seminar/ Organizers Topic Participants

Date Seminar/ Organizers Topic Participants

Secretary's PresentationsSecretary's Presentations

Union of Arab Banks Warning Signs of Money Laundering and Lebanese Lebanese and Arab Bankers,Regulations with respect to combating Money Laundering SIC Staff

Feb, 2002 Lebanese American University Introducing the SIC and Lebanese Regulations 200 Students,SIC Staff

March, 2002 BDL and Basle Committee on Operational Risk Management Bankers,Banking Supervision SIC Staff

April, 2002 Union of Arab Banks (UAB) Compliance of Arab Banks with International Standards on Arab Bankers,(Qatar) Combating Money Laundering and the Suppression of Arab Government Officials,

Financing of Terrorism SIC Secretary and AIUHead of

Central Bank of Oman and "Focused Seminar on Supervisory Developments and SIC Staff,Financial Stability Institute and Practices" KYC Procedures and Lebanon’s Banking Supervisors from Arab CountriesGCC Committee of Banking Experience in Combating Money LaunderingSupervision

May, 2002 Central Bank of Syria Fighting Money Laundering Lebanese and Syrian Bankers,SIC Staff

June, 2002 Banque du Liban Anti- Money Laundering Financial Institutions,Financial Leasing compagnies,Financial Crime Unit of the LebaneseInternal Security Forces

July, 2002 Union of Arab Banks (UAB)(Beirut)

Banking and economic issues concerning Arab banks Lebanese and Arab bankers,Government and Central banks officials,SIC Staff

Banque du Liban Anti- Money Laundering Money dealers

Lebanon’s Banking Control Com-mission in coordination with theBIS Financial Stability Institute

“Seminar on international supervisory development and Banking supervisors from Lebanon andpractice” the Middle East region,

SIC Staff

Banque du Liban Principles, issues and concerns concerning the fight of Two hundred internsMoney Laundering

Institute of Financial Affairs - Lebanese initiatives concerning the combating of money Staff and officers of the various sectionsof theof the Ministry of Finance - Other related matters including steps taken by the SIC of Finance and Lebanese customs,

that led to the de-listing of Lebanon from the NCCT list SIC Staff

August, 2002 Banque du Liban Principles, issues and concerns concerning the fight of InternsMoney Laundering

Syndicate of Money Dealers Discussion of recent AML procedures Syndicate Board members,SIC Staff

September,2002

Banque du Liban Principles, issues and concerns concerning the fight of InternsMoney Laundering

Association of financial institutions AML topics Senior Staff

October, 2002 Kaslik University (USEK) Alerting Students to Money Laundering Issues Students,

SIC Staff

Association of Banks in Lebanon Money Laundering: Investigation, Compliance and Banks Compliance Officers,

Indicators SIC Staff

November, Lebanese Internal SecurityForces

Spreading Awareness on Money Laundering LISF Officers,

Jan, 2002 Syndicate of InsuranceCompanies

Money Laundering concerning Insurance Companies Members of the Syndicate of InsuranceCompanies,SIC Staff

Date Seminar/ Organizers Topic Participants

2002 Relating Issues SIC Staff

Date Topic ParticipantsSeminar/ Organizers

ANNEX 3

61

Secretary's PresentationsSecretary's Presentations

Union of Arab Banks Warning Signs of Money Laundering and Lebanese Lebanese and Arab Bankers,Regulations with respect to combating Money Laundering SIC Staff

Feb, 2002 Lebanese American University Introducing the SIC and Lebanese Regulations 200 Students,SIC Staff

March, 2002 BDL and Basle Committee on Operational Risk Management Bankers,Banking Supervision SIC Staff

April, 2002 Union of Arab Banks (UAB) Compliance of Arab Banks with International Standards on Arab Bankers,(Qatar) Combating Money Laundering and the Suppression of Arab Government Officials,

Financing of Terrorism SIC Secretary and AIUHead of

Central Bank of Oman and "Focused Seminar on Supervisory Developments and SIC Staff,Financial Stability Institute and Practices" KYC Procedures and Lebanon’s Banking Supervisors from Arab CountriesGCC Committee of Banking Experience in Combating Money LaunderingSupervision

May, 2002 Central Bank of Syria Fighting Money Laundering Lebanese and Syrian Bankers,SIC Staff

June, 2002 Banque du Liban Anti- Money Laundering Financial Institutions,Financial Leasing compagnies,Financial Crime Unit of the LebaneseInternal Security Forces

July, 2002 Union of Arab Banks (UAB)(Beirut)

Banking and economic issues concerning Arab banks Lebanese and Arab bankers,Government and Central banks officials,SIC Staff

Banque du Liban Anti- Money Laundering Money dealers

Lebanon’s Banking Control Com-mission in coordination with theBIS Financial Stability Institute

“Seminar on international supervisory development and Banking supervisors from Lebanon andpractice” the Middle East region,

SIC Staff

Banque du Liban Principles, issues and concerns concerning the fight of Two hundred internsMoney Laundering

Institute of Financial Affairs - Lebanese initiatives concerning the combating of money Staff and officers of the various sectionsof theof the Ministry of Finance - Other related matters including steps taken by the SIC of Finance and Lebanese customs,

that led to the de-listing of Lebanon from the NCCT list SIC Staff

August, 2002 Banque du Liban Principles, issues and concerns concerning the fight of InternsMoney Laundering

Syndicate of Money Dealers Discussion of recent AML procedures Syndicate Board members,SIC Staff

September,2002

Banque du Liban Principles, issues and concerns concerning the fight of InternsMoney Laundering

Association of financial institutions AML topics Senior Staff

October, 2002 Kaslik University (USEK) Alerting Students to Money Laundering Issues Students,

SIC Staff

Association of Banks in Lebanon Money Laundering: Investigation, Compliance and Banks Compliance Officers,

Indicators SIC Staff

November, Lebanese Internal SecurityForces

Spreading Awareness on Money Laundering LISF Officers,

Jan, 2002 Syndicate of InsuranceCompanies

Money Laundering concerning Insurance Companies Members of the Syndicate of InsuranceCompanies,SIC Staff

Date Seminar/ Organizers Topic Participants

2002 Relating Issues SIC Staff

Date Topic ParticipantsSeminar/ Organizers

ANNEX 3

61

Special Investigation CommissionZahrat al-Ihsan Street Achrafieh P.O. Box: 16-5553, Beirut, Lebanon

Tel: +961 1 209 211 Fax: +961 1 209 210http: //www.sic.gov.lb e-mail: secretary@sic.gov.lb

� �

�

�

Address as of June 1, 2003

Current Address

Banque Du Liban Special Investigation Commission�

�

�

Masraf Loubnan Street P.O. Box: 11-5544 Beirut, LebanonTel: +961 1 750 000

http: //www.sic.gov.lb e-mail: secretary@sic.gov.lb