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BEIRUT — As Lebanon struggles to overcome a suffocating economic crisis, the domestic and international judicial actions against the country’s central bank governor Riad Salameh are proceeding at full throttle with a second arrest warrant from Germany.
Reuters reported on Thursday that Germany’s public prosecutor has verbally informed the Lebanese judiciary of an arrest warrant against Riad Salameh, who is being probed both at home and abroad over a series of financial crimes.
A senior judicial source told the news agency that the charges against Salameh include corruption, forgery, money laundering and embezzlement.
Berlin's move comes a week after France issued a similar arrest warrant against the embattled governor, after he failed to show up at a hearing in Paris, where French prosecutors were planning to present fraud and money laundering charges against him.
Salameh is being investigated by six European countries — France, Germany, Switzerland, Belgium, the United Kingdom and Luxembourg — over his alleged involvement in the embezzlement of $330 million from the central bank in money transfers to an obscure offshore company between 2002 and 2015.
Last Friday, Lebanon received an Interpol red notice against the governor. The notice is a nonbinding request for law enforcement authorities worldwide to locate and provisionally arrest a fugitive wanted for prosecution. Lebanon adopts a policy of not extraditing its nationals, instead trying them in local courts.
Judicial officials confirmed to local media that Salameh will not be handed over to the French judiciary, adding that state prosecutor Ghassan Oueidat will request his files from France so that the case can be overseen in Lebanon. Oueidat on Monday summoned Salameh for questioning at a hearing session scheduled later this week to take the necessary measures against him.
Salameh, who has denied any wrongdoing, is expected to file an appeal against the Interpol notice on Tuesday, his lawyer told the local LBCI TV channel.
Meanwhile, the French prosecution has summoned Salameh’s brother, Raja Salameh, and assistant, Marianne Hoayek, for a hearing in Paris on May 31 and June 13, respectively, according to sources close to the matter who spoke to Reuters on Monday.
Following the French judiciary’s move last week, Salameh has been facing growing calls to resign ahead of his term expiry in July. The 72-year-old governor, who has headed the central bank since 1993, had said earlier this year that he does not seek a new term.
Last Thursday, Deputy Prime Minister Saadeh al-Shami called on Salameh to step down given the seriousness of the crimes he is accused of. Caretaker Justice Minister Henry Khoury also called for his resignation.
“It would be good if the central bank governor submitted his resignation because the proceedings against him in France could have repercussions on the monetary situation,” he told LBCI on Monday.
But despite the calls, the government has refrained from dismissing Salameh. A statement issued at the end of a Cabinet meeting on Monday said that Salameh will remain in his post until the end of his term, awaiting a judicial decision.
Once a pillar of stability, now a fugitive
Salameh was once regarded as a pillar of Lebanon’s financial stability despite recurrent crises and political turmoil. But many have blamed him and his financial policies for the country’s economic collapse in October 2019. The local pound has lost more than 98% of its value, while millions of Lebanese have been locked out of their deposits as commercial banks have been imposing informal capital controls and limiting cash withdrawals. As a result, prices of goods have skyrocketed and poverty rates significantly rose, while the ruling political elite is dragging its feet concerning the implementation of reforms required to unlock any international aid.
Sources revealed to Reuters on Tuesday that Lebanon is likely to be added to the grey list of a global money laundering and terrorist financing watchdog.
Three sources familiar with the matter said the Middle East and North Africa section of the Financial Action Task Force (FATF) has completed its preliminary evaluation of Lebanon's economy, putting it “one mark over the threshold to be grey-listed.” The country scored as only partially compliant in several categories, including anti-money laundering measures and mutual legal assistance in asset freezing and confiscation, the sources added.
MENA FATF is planning to submit the report during a meeting in Bahrain this week, as per the same sources. Lebanon is reportedly working to change the scoring, to avoid being grey-listed. Such a move would damage a country’s financial reputation, and in Lebanon’s case will further strain its ailing sector. The listing could disrupt capital flows into the country, push banks to terminate relationships with customers based in the high-risk country and hinder global finance packages.
