FATF Places Lebanon on Grey List

Fri Oct 25 2024
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BEIRUT: Lebanon has been placed on the “grey list” of countries under special scrutiny by the Financial Action Task Force (FATF), the organization announced on Friday.

“We recognize the extremely grave situation Lebanon is currently facing,” said Elisa de Anda Madrazo, the FATF president, during a press conference. “Lebanon’s status on the grey list should not impede relief efforts. We are working to ensure that channels for humanitarian aid remain open.”

Since 2019, Lebanon has been grappling with a financial crisis exacerbated by a lack of effective governance and is now experiencing additional strain from Israeli airstrikes and ground operations targeting Hezbollah.

Madrazo noted that Lebanon has been granted some flexibility regarding deadlines outlined in its action plan, though she did not elaborate further during the briefing. A source informed Reuters that, due to the ongoing conflict, the FATF has extended the deadline for Lebanon to address the issues leading to its grey-listing until 2026, instead of 2025. These concerns include terrorism financing and the lack of judicial independence.

This grey-listing is likely to further deter investment in Lebanon and could impact the relationships between some Lebanese banks and the global financial system.

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