Answer ... Financial crimes are governed in Lebanon by various provisions, as follows:

• Money laundering is governed by the Law on Fighting Money Laundering and Terrorist Financing and various BDL circulars and decisions, such as:
• • Basic Circular 83/2001 on the Regulations on the Control of Financial and Banking Operations for Fighting Money Laundering and Terrorist Financing;
  • Basic Circular 126/2012 on the Relationship of Banks and Financial Institutions with their Correspondents;
  • Basic Circular 1/2018 on Fighting Money Laundering and Terrorist Financing in Financial Intermediary Institutions and in Collective Investment Schemes; and
  • Special Investigation Commission Circular 25/2019 on National Money Laundering and Terrorist Financing Risk Assessment.
• Theft, breach of trust, embezzlement, bribery and fraud are regulated under the Penal Code.
• Market manipulation is an offence under Article 685 of the Penal Code and is sanctioned under CMA Series 4000.
• Insider trading offences are governed by the Law on the Prohibition of Exploitation of Inside Non-public Information when Trading in the Capital Markets and CMA Series 4000, which prohibit an insider from making a trade, directly or indirectly, in a traded security or a related security while in possession of inside non-public information relating to the traded security, and from using inside non-public information to acquire, attempt to acquire, dispose or attempt to dispose, directly or indirectly, of a traded security to which such information relates.
• Tax evasion is governed primarily by the Tax Procedures Law. Additionally, Minister of Finance Decision 2487/2019 reiterates that necessary legal measures will be taken, including increasing banking secrecy, to strictly combat tax evasion; the Exchange of Tax Information Law sets out the basis for the exchange of tax information.
• Corruption is criminalized under the Law on Illicit Enrichment.

Fintechs that conduct a regulated activity – such as banks, financial institutions, leasing companies, institutions that issue and promote credit or charge cards, institutions that perform money transfers electronically, exchange institutions, financial intermediation institutions, collective investments schemes and any other institution that requires a licence or is supervised by the BDL – must comply with certain obligations, including the following:

• Implement customer due diligence measures.
• Determine the identity of the beneficial owner and take the steps needed to verify this identity on the basis of reliable documents or information or data.
• Retain copies of related documents of all operations, and retain information or data or copies of the customers’ identification documents, for at least five years after performing the operations or ending the business relationship, whichever is longer.
• Continuously monitor and review the business relationship with the client.

Fintech companies which require a licence or are supervised by the BDL will be also subject to the Law on Fighting Money Laundering and Terrorist Financing and the various laws and regulations which require, among other things, the establishment of an anti-money laundering/counter-terrorist financing (AML/CFT) Board Committee and an AML/CFT Compliance Unit.

The main challenge for fintechs that specifically provide payment services is to ensure compliance with applicable financial laws and regulations, given the money laundering, terrorist financing and tax evasion risks associated with online payments and money transfers.