Lebanon Added to FATF 'Grey List'

The Financial Action Task Force (FATF), the body overseeing financial crimes, announced on Friday, October 26, that Lebanon has been placed on the 'grey list' of countries under 'special monitoring' by the group. This regulatory body, which sets global standards for combating money laundering and terrorism financing, stated that Lebanon has made progress on several recommended actions and will continue to implement reforms. Elissa De Anda Madrazo, the head of FATF, emphasized that she is aware of the dire situation Lebanon is currently facing and stated that the country's inclusion on the grey list should not hinder humanitarian and relief efforts. Lebanon has been in a financial crisis since 2019 and is now grappling with the repercussions of Israel's military operations against Hezbollah. Being on the 'grey list' leads to a decrease in international investment and may affect the connections of some Lebanese banks with the global financial system. Inclusion on such a list also carries the risk of damaging reputation, downgrading credit ratings, difficulties in accessing global financial resources, and higher transaction costs. Hezbollah, linked to the Islamic Republic of Iran, has been accused of illegal trades and money laundering over the years. Daniel Hagari, a spokesperson for the Israeli army, announced on October 22 that at least half a billion dollars in cash and gold provided by the Iranian government to Hezbollah was stored in one of Hassan Nasrallah's shelters under the 'Al-Sahil' hospital in the heart of Beirut. The Israeli army spokesperson stated that the Iranian government supports this group financially through oil and money transfers by the Quds Force to Syria, direct money transfers by plane to Lebanon, and backing Hezbollah's economic projects, including gas exports and establishing factories in some regional countries. The FATF announced in July of this year that the Islamic Republic of Iran, North Korea, and Myanmar would remain on its blacklist. The FATF noted Iran's refusal to ratify the United Nations Convention against Transnational Organized Crime (Palermo Convention) and the Convention on Terrorism Financing in line with its standards, lifted the suspension it had imposed for countries' actions regarding non-compliance with this commitment, and urged member countries to take effective deterrent measures against the Islamic Republic. The FATF's 'high-risk' countries list, or blacklist, currently consists of three governments: the Islamic Republic of Iran, North Korea, and Myanmar, which have major governance deficiencies in combating money laundering, terrorism financing, and financing the proliferation of weapons of mass destruction. The efforts of the government of Medicalian to normalize the Islamic Republic's case in the FATF. The government's treasury balance is $170 million; the financial crisis has arrived. A member of the Chamber of Commerce stated that the key to developing trade with Iraq is to exit the FATF blacklist. The Financial Action Task Force; Iran remains on the 'blacklist' while the UAE has been removed from the 'grey list.'