The Lebanese Parliament has removed the major obstacle preventing a forensic audit of the country’s central bank, a week after international firm Alvarez & Marsal terminated its contract.
Parliament passed a recommendation on Friday that the Banking Secrecy Law should be waived for a future forensic audit that should be carried out not just for the central bank but for all state institutions.
President Michel Aoun sent a letter to Parliament stressing the importance of the forensic audit to prevent Lebanon from being viewed as a “rogue or failed” country by the international community.
“Forensic audit is necessary so that Lebanon does not become a rogue or failed country in the eyes of the international community. A forensic audit is a prerequisite for the state’s negotiation with the International Monetary Fund,” Aoun said.
A&M declined to comment on the decision when contacted by Arabian Business but a financial expert familiar with the forensic audit negotiations said he expects that Lebanon will contact Alvarez & Marsal to resume its forensic audit mission.
The same financial expert told Arabian Business on condition of anonymity that even if Alvarez & Marsal refused to resume its mandate, Lebanon would start looking for another international auditing firm.
The source added that A&M’s resumption of its mandate would be better than Lebanon having to contract a new company.
A key step in unlocking billions of dollars in aid, A&M’s resignation was is a blow to Lebanon’s attempts to extricate itself from its financial turmoil, which has been rooted in endemic waste and corruption for years.
The central bank had claimed that banking secrecy laws dating from the 1950s prevented it from handing over all the information sought by the auditors and delivered less than half of the documents that A&M had requested.
Restructuring consultancy A&M left the door open for the possibility of resuming its mandate when it said last week that it remained “available should the government consider re-engaging it under circumstances more conducive to a successful completion of the mandate”.
Caretaker Prime Minister Hassan Diab and Justice Minister Marie-Claude Najm have criticised the central bank for using bank secrecy to justify withholding information.
French President Emmanuel Macron said in a message to Aoun on Thursday that “the demands of the Lebanese people in their uprising about a year ago are still achievable”.
His message coincides with France’s announcement that it will host a video conference with international partners on December 2 to discuss humanitarian aid for crisis-stricken Lebanon.
Nearly four months after the Beirut Port explosion forced the Lebanese government’s resignation, leaders are still struggling to form a new government amid ongoing political disagreements.
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