Cases Received

A total of 284 cases of suspicious financial irregularities were delivered to the SIC last year- 185 from local sources and 99 from foreign ones- among which 116 were either referred to the Public Prosecution or forwarded to the requesting authorities. 93 cases are still pending while 75 cases were not passed on. Of the investigated cases, financial information was provided for 92 cases while secrecy was lifted on the remaining 24.

Nature of the Offence

The number of Customs Cross Border Cash cases ranked first (30 cases) among the offences followed by forgery as illustrated in the following Table 1.

Source: 2012 SIC Report

Source of Requests

With 387 requests filed to the Special Investigation Committee, the Lebanese banks are considered the top source suspecting money-laundering activities and seeking assistance. The Financial Intelligence Units rank second as illustrated in the following Table 2.

Source: 2012 SIC Report

Requests of Assistance by Country

Numerous foreign countries and authorities approached the Special Investigation Committee demanding assistance. The UN presented the largest number of requests (23), followed by France (10) and the US (8) respectively. The following Table 3 shows the source of foreign requests for assistance.

Source: 2012 SIC Report

Selected Cases

The following are examples of the numerous cases investigated by the Special Investigation Committee and drafted in the report:

• A company owned by a foreign national opened an account by proxy at a local bank. The substantial wire transfers made to this account were regarded with suspicion and urged the bank to ask the company’s representative for documents that validated the transferred funds. As the latter failed to present supporting evidence that substantiated the transactions, the SIC realized that the profitability of the company was not commensurate with the incoming transfers and viewed that nothing justifies the reason the company should maintain its account in BDL. The findings of the SIC investigation also revealed the company’s general manager was suspected of engaging in fraud, mismanagement and money-laundering activities. The SIC decided to freeze the funds and refer the case to the General Prosecutor.
• A public employee of a modest financial status opened an account in one of Lebanon’s banks in 2012. A few months later, the account received multiple cash deposits not exceeding USD 10 000 each, to clearly avoid filling the cash transaction slip. When asked about the source of funds, the account holder provided contradicting answers (withdrawals from other bank accounts, real estate commission fees). Suspecting illicit funds, the SIC probed into the matter and found that the customer’s occupation was too modest to justify the significant deposits amounting to USD 260 000. The findings pointed towards possible acts of corruption and led the SIC to lift the banking secrecy on the account in question, freeze the funds and forward the case to the Public Prosecutor.
• A foreign citizen not residing in Lebanon opened 3 bank accounts for 3 offshore companies registered in Asia and Latin America in one of Lebanon’s local banks, citing the high interest rates offered in Lebanon as the incentive that encouraged him to bank in Lebanon. Transfers from two foreign banks, whereby the ordering customer was one of the companies, were sent to the three accounts, only to be transferred out again from the said accounts to another local bank, and from Lebanon to overseas afterwards. Being that no economic justification existed for the transfers, the SIC suspected potential layering in the transaction and decided to lift the banking secrecy on the accounts in question, freeze the funds and forward the case to the Public Prosecutor.
• A local bank opened two trading accounts for two high-net-worth individuals and a third corporate one for a company belonging to one of the two customers. A special trader was tasked with handling the accounts but the bank suspected the trader of making unusual transactions. The SIC investigations revealed collusion between the trader and other customers to split illicit profits and it was decided to lift the banking secrecy, freeze the funds and forward the case to the Public Prosecutor.