Justice and security

Dirty money in the banking sector

Leiden University

The purpose of this study is to analyze the Lebanese anti-money laundering (AML) paradigm in light of banking secrecy law. The phenomenon of money laundering that was first associated with the crime of drug trafficking developed a lot since the early 1900s to become a major threat to the world’s economy today. The fight against this ever-growing crime, with multiple sources and origins, has been the centre of attention of the biggest countries in the world. Thus, the need for international AML standards was required, by which countries must abide, to ensure an effective fight against this crime. The issue of banking secrecy regulations was important to study along with the AML framework as the principles of the first totally contradict those of the latter. The question of “How to balance the confidentiality of the Lebanese banking sector with the interest of the international community in the fight against money laundering?” was interesting to study, as it turned out that the existence of such professional secrecy does not affect the effective implementation of the AML guidelines by banks and other financial institutions. This can only happen when there is a special judicial organ to which banking secrecy is not opposable at any time, and which is the sole organ entrusted with lifting off this professional secrecy and allowing the disclosure of information to the competent authorities. Thus, the Lebanese banking system can ensure total compliance with the AML framework while still adopting banking secrecy regulations. The choice of Lebanon was compelling because of the special level of protection its banking secrecy law offers.

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