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Central Bank Asks Banks to Apply FACTA

In its monthly meeting with the Association of Banks in Lebanon (ABL), Central Bank Governor Riad Salamé indicated that the banking sector needs to face the challenges related to the sanctions imposed on some countries in the region,and urged banks to abide by the sanctions in order to maintain relations with correspondent banks in the United States and Europe, as reported by Lebanon This Week, Byblos Bank Economic publication.

 

He encouraged Lebanese banks to cooperate as closely as possible with the Banking Control Commission to conduct a new stress test following information about pay- ment problems that some Syrian borrowers are facing, which would result in an increase in provisions. The governor also urged banks to follow a conservative policy and to limit dividend distribution to 25% of profits, so they can use the balance of 75% to strengthen their capital and to meet the Basel III targets by the end of 2015.

 

In parallel, Governor Salamé considered that Lebanese banks need to apply the United States' Foreign Account Tax Compliance Act (FACTA). He stressed on the need to reach an agreement similar to the one reached between European countries and the U.S. Department of the Treasury. He considered that the Central Bank will have to play the role of agent on behalf of the Lebanese bank- ing sector, rather than having each bank reach a separate agreement with the U.S. Internal Revenue Service. FACTA seeks to identi- fy U.S. taxpayers who have accounts at non-U.S. financial institutions, and aims to enforce reporting of those accounts through with- holding.

 

It requires non-U.S. financial institutions to enter into compliance agreements with the U.S. Treasury by June 30, 2013 and to identify and report U.S. accounts annually.

 

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  • A fundraising event, entitled Think Green, will be held by Zero Waste ACT for all its business members on September, 10,2013, at WHITE, Dora.
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  • A green initiative launched by Ashrafieh 2020 project aims to transform Ashrafieh into a tranquil and unpolluted area.Green spaces allow residents to walk and ride bicycles.

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