Rear View – Lebanon in review (21 November 2021)

Rear View – Lebanon in review (21 November 2021)

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16 November: Luxembourg investigates Riad Salameh

Luxembourg has joined Switzerland, France and Germany in commencing a judicial investigation into Riad Salameh, his companies and assets over allegations of misuse of public funds, illicit enrichment, money laundering, and tax evasion. Salameh is the Governor of the Lebanese Central Bank.

The Swiss investigation centres on Salameh’s alleged aggravated money laundering at the Central Bank, involving $300 million in profits, through his brother’s business, Forry Associates Ltd. Similar claims are being investigated in France. Lebanese critics accuse Salameh of corruption and enrichment while Lebanon’s economy collapses.

17 November: FPM appeals diaspora voting amendments

Gebran Bassil, representing the Strong Lebanon bloc of the Free Patriotic Movement (FPM), filed an appeal in the Constitutional Council challenging amendments allowing the Lebanese diaspora to vote for all 128 MPs in next year’s elections. 

On March 27th, the general parliamentary elections will take place and FPM claims that Lebanese embassies abroad and the Ministries of Foreign Affairs and the Interior will not be prepared. Furthermore, the weather in Lebanon supposedly  makes holding elections very difficult. The appeal requests that only six new seats be allocated to the diaspora. 

In a calculated move, the FPM waited until the last possible day to appeal, hoping to postpone the elections from March 27th to May. If the Constitutional Council accepts their appeal, the elections will be put off until then.

Gebran Bassil

17 November: Lebanon seeks new trading partners after Saudi embargo

To counteract the projected $250m loss in trade revenue after Saudi Arabia’s import ban on Lebanon, Lebanon is seeking new trading partners.

Bekaa Farmers Association reports that tons of fruits and vegetables are exported to Saudi Arabia every year, making it a major and crucial market for Lebanon’s agriculture and food producers. Iraq, Jordan and Egypt have been identified as the best foreign markets to shift Lebanese exports to. 

This is not a perfect solution, however. Shipping costs to Iraq are high due to a prohibition on Lebanese trucks entering Iraqi territory meaning Lebanese exports must go through Syria. Jordan only imports, at best, 2.5% of the number of apples that Saudi Arabia typically imports from Lebanon

Gulf countries are crucial trading partners for Lebanon. According to the Observatory of Economic Complexity (OEC), in 2019 Saudi Arabia accounted for 6.92% of Lebanon’s exports, the UAE for 15.2% and Kuwait for 5.74%. If the latter countries decide to follow Saudi Arabia’s example and impose similar embargoes on Lebanon, the economic situation in Lebanon could become even more desperate than it currently is.

18 November: Kuwait imprisons 18 for Hezbollah financing

A Kuwaiti prosecutor has imprisoned 18 people for alleged financing of Hezbollah, a designated terrorist organisation in the Gulf state. Among the charges are “membership in a prohibited party, money laundering, and spying.”

For 21 days, the accused have been held in a central prison pending investigation. They are expected to appear in court before the remand judge, depending on the legal period for which they are detained, and which requires their submission to the renewal judge.

The prosecution is reportedly still investigating the case and it is expected that it will soon be referred to the Criminal Court. 

Kuwait has expelled Lebanon’s ambassador, suspended tourist visas for Lebanese citizens and frozen all charitable donations to Lebanon’s NGOs as the Lebanon-Gulf crisis has escalated in recent weeks.

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Raid salameh

18 November: Salameh tries to exonerate self via unnamed auditor

Riad Salameh, the Governor of Lebanon’s Central Bank (BDL), has called allegations of embezzlement and money laundering ‘campaigns against him’ and announced an anonymous auditing firm will review his accounts. 

So far, charges have been brought against Salameh in Lebanon, Switzerland, France, Germany and Luxembourg, amongst other countries.

According to the findings of the unnamed auditing company, Forry Associates Ltd – a company that Salameh’s brother Raja is the ‘only effective beneficiary’ of – did not directly receive money from BDL, but rather received funds from third parties who deposited money in BDL bank accounts that was eventually transferred to Forry Associates Ltd. 

Forry Associates is based in the British Virgin Islands, according to the Swiss prosecution. 

To date, the judiciary in Lebanon, as in Switzerland, is prevented from obtaining much information about Salameh or his brother Raja, under the pretext of banking secrecy.

Despite his claims of innocence, Salameh continues to avoid a judicial investigation of his bank accounts on the grounds that they are being handled by the Special Investigation Commission, which he heads himself.

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