The bill on capital control will be debated in the Lebanese parliament
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Roshan Amiri
- . March 28, 2022
- . Update: March 29, 2022 2:42 pm
Lebanon–Two legislators said a draft Lebanese capital control bill will be reviewed by parliamentary committees on Monday and put to a vote on Tuesday if the language is agreed upon, a new attempt to approve the long-stalled measure amid a deadlock between banks and some judges.
Meetings with the IMF this week, according to Deputy Prime Minister Saade Chami’s office, were largely focused on gaining the Fund’s perspective and comments on the proposed capital control bill. On Monday, the proposal was forwarded to parliamentary committees for consideration, and it was on the agenda for Tuesday’s parliamentary session, according to the statement. The IMF’s comments have been incorporated into the draft, Chami told Reuters.
Since 2019, when Lebanon slid into a financial crisis that paralyzed the banking sector and locked depositors out of US dollar accounts, ruling parties have failed to adopt a capital control law. The IMF has recommended formal capital controls as a policy suggestion from which Lebanon wants to get help. Seven banks have had their assets blocked by judicial rulings this month in three different proceedings, and the current proposal returns to parliament amid intensifying tussles between certain judges and banks.
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Banks have slammed what they call the government’s “arbitrary and illegitimate actions” against them, reiterating their demand for a capital control law. Judges in Lebanon recently decided in favor of at least two depositors who had sought to force the payment of their deposits in cash. A London court in February found in favor of a saver seeking $4 million deposited with Bank Audi and its rival SGBL in a high-profile case from outside.
The last time the document was addressed was a few weeks ago. “The latest draft will be considered by parliamentary committees on Monday, and it will be voted on Tuesday, depending on the outcome of the Monday talks to change it, and if an agreement is achieved,” Alain Aoun, a prominent legislator with the Free Patriotic Movement, told Reuters.
The Amal Movement’s MP Yassine Jaber said parliamentarians had raised qualms about several aspects of the measures, but that if accepted, they will be put to a vote on Tuesday. “We all agree, in principle, that we need a legislation,” he told Reuters. As more depositors seek to sue banks, attorneys representing depositors claim that banks have been terminating accounts and issuing cheques for the amount without consulting customers. The British embassy in Lebanon expressed “grave concern” on Friday over Lebanese banks cancelling accounts belonging to British nationals or residents.
