In its recent meeting, the group kept Lebanon among countries under “enhanced monitoring”, while removing Algeria and Namibia from the grey list and adding Iraq and Bosnia and Herzegovina to it.

This classification means that the country concerned has “strategic deficiencies” in its anti–money laundering and counter–terrorist financing systems, although it has committed to an action plan to address these gaps within a specified timeframe and under strict supervision.

10 Necessary institutional and systemic measures

Lebanon still has 10 essential conditions to fulfill, including updating risk assessments, strengthening mechanisms of mutual legal assistance and extradition, and improving asset recovery.

It also includes raising the compliance level of non-financial professions and businesses, updating beneficial ownership information in companies, and increasing investigations, prosecutions, and convictions in money laundering cases, alongside stricter implementation of targeted financial sanctions and monitoring of high-risk non-profit organizations.

These conditions indicate that the issue is no longer limited to the banking sector alone, but extends to a wider network of sectors and institutions, from the judiciary and commercial registry to free professions and gold and gemstone traders, reaching border crossings and non-profit charities and organizations. Compliance, therefore, is no longer merely a technical banking matter but a test of the effectiveness of the state itself.

Financial sources indicate that “the main issue is no longer the absence of laws or circulars, but proving that these measures have produced actual results, whether in terms of investigations, prosecutions, or information exchange abroad, which is precisely what FATF is currently assessing in Lebanon’s case.”

In this context, the category of “designated non-financial businesses and professions” emerges as one of the key follow-up areas. The group does not limit risks to banks and financial institutions but also includes lawyers, notaries, accountants, and traders of precious metals and gemstones.

Therefore, it emphasized the need to enhance these categories’ understanding of non-compliance risks and to impose effective and proportionate sanctions when obligations related to combating money laundering and terrorist financing are violated.

It is worth noting that among the local steps taken in this regard, the Ministry of Justice issued a circular directed at notaries, imposing additional procedures related to verifying the source of funds and specifying the payment method in transactions, as well as inquiring about the presence of intermediaries or brokers and verifying their identities.

Additionally, the Special Investigation Commission issued a circular requiring traders in gold, gemstones, and precious metals to take measures to verify customers’ identities, understand the source of funds, identify the true beneficiary of operations when applicable, and monitor and report unusual or suspicious transactions.

The Lebanese judiciary under close examination

The Lebanese judiciary remains under close examination. The group calls on Lebanon to demonstrate a sustained increase in investigations, prosecutions, and judicial sentences related to money laundering crimes, as well as broader use of information provided by the Financial Intelligence Unit, and improved mechanisms for executing mutual legal assistance requests, extradition, and asset recovery.

Sources say that “what is required from Lebanon is no longer merely updating systems but shifting toward demonstrating the effectiveness of the judiciary and specialized bodies. The group wants to see files being processed, rulings issued, and cooperation mechanisms functioning within appropriate timeframes, as texts alone are not enough to exit the grey list.”

Lebanon on the grey list... and then the black? - LIMS

Lebanon's cash economy remains a hurdle

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