Governor of Central Bank of Lebanon under European investigations for ‘money laundering crimes’

Riad Salameh, Governor of the Central Bank of Lebanon (BDL), along with 18 other bank and financial officials and his brother Raja, are to come under investigation in the next month over accusations of money laundering and embezzlement, European investigators told AFP.

European investigators have started their work in the economically collapsed Lebanon to probe accusations of corruption and money laundering, estimated at more than $300 million. The investigators from France, Germany and Luxembourg listened to the testimonies given by former governor deputies and other officials in Lebanon, the Lebanese National News Agency (NNA) reported on January 16. 

The investigations occurred at the headquarters of the Court of Cassation with a number of financial employees from the BDL, including the bank’s former deputy governor, Saad Andari, and a former employee at the Banking Control Commission, Khalil Kassaf.

On March 28, 2022, the European Judicial Cooperation Unit (Eurojust) announced that France, Germany and Luxembourg had frozen €120 million of Lebanese assets following an investigation targeting Salameh and four of his close associates on charges of money laundering and “embezzlement of public funds in Lebanon that are worth more than $330 million and €5 million, respectively, between 2002 and 2021,” according to AFP.

European investigators are probing into transfers of more than $330 million allegedly misappropriated from the Banque du Liban through a contract awarded to Forry Associates, a company owned by Raja Salameh, the National reported.

According to European investigators, Forry, which is registered in the US Virgin Islands in the Caribbean, appears to be a shell company. However, both Salameh and his brother rejected the accusations.

The European Observatory for Integrity in Lebanon (OEIL) revealed in a statement that “suspicious practices have surfaced on the part of the Supreme Judicial Council, which has been resorting to harassment practices against Lebanese judges while carrying out their required duties,” NNA reported.

Lebanon’s economic and financial crisis was ranked by the World Bank as one of the most severe economic crises worldwide since the mid-1800s. Depositors in Lebanon, which announced its bankruptcy in April 2022 despite Salameh’s denial, cannot withdraw their own money, to the extent that some of them had stormed some banks nationwide to get their own money needed for medical treatment. 

In a statement released on November 23, 2022, the World Bank called for “a more equitable distribution of financial losses to help put Lebanon on a recovery path.” The WB stated that the big dilemma facing a comprehensive reform plan is the “discord” among the main stakeholders to distribute the financial losses.