The Daily Star
BEIRUT: Gov. Riad Salameh Wednesday reiterated the Central Bank’s strong commitment to complying with the highest international standards in the fight against corruption, money laundering and terrorism funding, and in the adherence to the international exchange of tax information.
Speaking at the opening of Banque du Liban’s compliance day at the Phoenicia Hotel, the governor said the 2005 guidelines by the Basel Committee on Banking Supervision called for banks to implement effective compliance policies and procedures, and directed senior management to take appropriate corrective actions where compliance failures are identified.
“In Lebanon, the main driver that led us, as a Central Bank, to mandate, in 2013, the establishment of a compliance governance structure within banks and financial institutions, was to mitigate and potentially eliminate any risk of noncompliance with local and international laws and regulations.
“We made sure through our mandatory regulations, namely BDL Basic Circular 128, that the Compliance Department, which by its pure nature should be independent, has a direct reporting line to the executive management,” he said.
Salameh said BDL’s aim is to facilitate the implementation of internal controls to protect the organization from risks; monitor the effectiveness of such control measures and report gaps; submit recommendations to comply with the latest regulatory developments and international best practices; and provide advice to ensure the ethical behavior of the bank and its staff. “We are convinced that senior management in banks should empower compliance staff by setting the ‘tone at the top.’ This empowerment is being translated by a clear organizational positioning of the Compliance Function within our banks, the strong interaction of the Compliance Department with other control functions, and a well-defined mandate for the chief compliance officer,” he added.
Salameh said that in 2016 BDL, created an independent Compliance Function that reports directly to him. “Its core mandate is to ensure that Banque du Liban and its clients, particularly banks and financial institutions, comply with applicable laws, regulations and international best practices in addition to instilling the compliance culture. This is being continuously achieved and Banque du Liban compliance has been successful in applying the internationally accepted three lines of defense,” he said.
Salameh also underlined the importance of upgrading cybersecurity in banks and financial institutions. “Failures in cybersecurity have the potential to negatively impact the core operations and the reputation of a bank. It could even lead to undermine the public’s confidence in the safety and resilience of the financial sector. BDL realizes the importance of protecting the security and confidentiality of customer information and records within the sector and is determined to support the latter in its endeavors to avoid cybersecurity breaches.
“In this regard, Banque du Liban issued Circular 144 on Cybercrime Prevention,” he said.
Salameh encouraged banks and financial institutions to closely monitor international developments and regulations that could impact their activities.
