The primary goal of our compliance program is to ensure that the Bank is in full compliance with relevant laws and regulations which apply to a range of matters from standards of market conduct, managing conflicts of interest, treating customers fairly, to the prevention of money laundering and terrorist financing. LSB maintains full compliance with Law No. 318 on money laundering and terrorist financing, as well as BDL circular 83 on regulations on the Control of Financial and Banking Operation for Fighting Money Laundering &CFT.
LSB’s compliance program also ensures that we maintain full compliance with the American Foreign Account Tax Compliance Act (“FATCA”), as well as the Common Reporting Standards (“CRS”) promulgated by most of the major industrial nations under the framework of the Organization for Economic Cooperation and Development (“OECD”).
LSB seeks to undertake all efforts to prevent the use of the banking system for the legalization of revenue from criminal activity and for terrorist financing. Our firm stance against money laundering and terrorist financing ensures that the Bank’s reputation is protected and that LSB maintains full access to the international financial markets.
This policy is implemented through various procedures and means, which are in accordance with the domestic legislative and regulatory framework. The program relies heavily on the use of information systems to ensure the maintenance of the smooth operation of the bank and the minimization of any disturbances of our clients’ businesses.
LSB believes that sound KYC policies and procedures are critical in protecting the safety and soundness of the bank and the integrity of the banking system. Therefore, it is the bank’s policy to adopt clear procedures for the opening of accounts and applying Customer Due Diligence including verifying the identity of the customers (permanent and transient, residents and non-resident) and beneficial ownership before or during the course of establishing a business relationship.
The 2010 Foreign Account Tax Compliance Act (“FATCA”) is an American law whose implementation is overseen by Internal Revenue Service, the American tax authority. LSB maintains compliance with this law because under US-law, tax liability is bound to citizenship not residency as in many other countries and therefore US persons (defined as a US citizen or resident) who bank with us may be liable to pay taxes independent of their residency status.
FATCA obliges non-American financial institutions who wish to use American financial markets to initiate a relationship with the IRS to report accountholders who are U.S persons. LSB has become a Participating Foreign Financial Institution(“PFFI”) and complies with the terms set out in FATCA.
For more details, please visit the FATCA section on the IRS website. Further, our staff is always willing to take you through the details of our FATCA policy.
CRS are standards for the automatic exchange of financial account information developed by the OECD. The CRS regime represents the OECD’s efforts to prevent taxpayers who hold financial assets in financial institutions outside of their country of tax residency from avoiding their local tax obligations. The CRS have been designed by the OECD and G20 countries as a single, global standard to promote tax transparency and effectively tackle cross border tax.
The intent behind the law is for financial institutions to identify and report persons who may be tax liable. This will typically occur when an individual or an entity is tax resident in a CRS reportable jurisdiction other than the one in which she seeks to open a financial account. This information will be reported to the local tax authorities who will subsequently forward the relevant information to the respective jurisdictional tax authority.
In Lebanon, Law # 55 titled “Automatic exchange of information” enacted on 27/10/2016 provides for Lebanon for the standards set out in the CRS regime. As a Lebanese bank, subject to the regulations of the Lebanese legislator and BDL, we maintain compliance with CRS. For this reason, from 2018 onwards, all persons wishing to open a new account will be obliged to sign a self-certification stating their CRS status, and LSB may seek to independently verify disclosures.
To see a list of participating countries and for further details, please visit the CRS section on the OECD’s website. Further, our staff is always willing to take you through the details of our CRS policy.