Lebanese banks suspend strike at PM’s request; pound regains some value

Lebanese banks suspend strike at PM’s request; pound regains some value
Lebanon’s struggling banks have decided to suspend their weekslong strike on Feb. 24, 2023 for one week following a request by caretaker PM Najib Mikati. (AP/File)
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Updated 24 February 2023

Lebanese banks suspend strike at PM’s request; pound regains some value

Lebanese banks suspend strike at PM’s request; pound regains some value
  • The decision comes as many Lebanese, including civil servants, are expecting to get their monthly pay
  • The Association of Banks in Lebanon did not give further details about the suspension

BEIRUT: Lebanon’s struggling banks on Friday decided to suspend their strike, which started earlier this month, for one week at the request of caretaker Prime Minister Najib Mikati.

The decision comes as many Lebanese, including civil servants, wait to receive their monthly pay.

Salaries are typically paid toward the end of the month, through bank accounts.

The Association of Banks in Lebanon also said that it realizes the gravity of the economic crisis and the need to secure banking services for citizens at the end of the month. 

The announcement came as the Lebanese pound regained some value on the black market, trading at 79,000 pounds to the US dollar. It traded at 81,000 LBP/USD on Thursday.

An economic analyst expected the local currency to regain more value over the weekend.

However, any rise is likely to be temporary since it is not the result of monetary policy, the observer said.

The banks launched the strike on Feb. 7, objecting to judicial prosecutions — led by Mount Lebanon Public Prosecutor Judge Ghada Aoun — against a number of banks on charges of money laundering.

The association demanded an end to the prosecutions and the passing of the Capital Control Law as conditions for reopening.

The analyst indicated that the Public Prosecution Office of the Court of Cassation was in the process of drafting a judicial circular to define a specific mechanism for bank prosecutions.

The circular, which is expected in the coming days, will being an end to the controversy, the analyst said.

The decision to reopen banks came a day after Mikati told Interior Minister Bassam Mawlawi to instruct the security services to ignore Judge Aoun’s judicial orders and avoid making arrests.

This step aroused discontent within the judicial body, which believes that the principle of separation of powers has been violated.

It also alleged that the political authority was interfering with the judicial authority in sensitive cases such as the probe into the Beirut port explosion and the prosecution of banks.

Pro-bank politicians argued that Judge Aoun was making random accusations, based on political motives, which could end up destroying the banking sector in Lebanon.

With the approval of six judges and the objection of one, the Supreme Judicial Council Issued a statement, addressed to Mikati and Mawlawi.

The council said: “Pursuant to the principles of separation of powers and the independence of the judiciary, which are enshrined in the constitution and the law, we call on you to reverse the decision that violates these two principles.”

Also on Friday, political observers believed that the prosecution of Central Bank Gov. Banque Riad Salameh, and the referral of the investigation to the first investigating judge in Beirut, Charbel Abu Samra, might freeze the investigations of European judges into cases related to Salameh.

They believed that the move was coordinated to localize the investigation and protect Salameh from external allegations.

On Thursday, Beirut Public Prosecutor Judge Raja Hamoush charged Salameh, his brother Raja Salameh, and his assistant Marianne Howayek with forgery, embezzlement of public funds, violation of tax law, money laundering and illegal enrichment.

Judge Hamoush referred the case to Judge Abu Samra, asking him to interrogate the defendants and issue the necessary judicial warrants against them.

A judicial source told Arab News: “When Judge Abu Samra receives the case, the European judicial delegation would have to deal with him and no longer with the Public Prosecution Office.

“The Lebanese investigation may conflict with the European investigation, especially if the same crime is being investigated in Lebanon and abroad.

“The Lebanese judge can reject any request of the European delegation and the Public Prosecution Office would have to ask the European judicial delegation to postpone its visit to Beirut.”

A judicial delegation from Germany, France and Luxembourg in January began its investigations in Beirut in cases related to corruption, forgery, embezzlement, money laundering and transferring money to banks abroad.

During its stay in the Palace of Justice in Beirut for about a week, the delegation listened to 12 banking figures as witnesses, including former Finance Minister Raya Al-Hassan and former MP Marwan Khair El-Din, along with Salameh’s former deputies.

The judicial delegation was scheduled to return to Beirut for a second round of investigations to hear Salameh and several of his relatives.

The source stressed that Lebanon was committed to the UN Convention against Corruption, and is cooperating with the European delegation.

“However, the international agreement gave the Lebanese judiciary the full right to request the postponement of the international investigation in the event that Lebanon initiates an independent internal investigation into the same case.

“This legal outlet would postpone the return of the European judicial delegation to Beirut.”