Query

Please provide an overview of corruption and anti-corruption in Lebanon, with a focus on the anti-corruption bodies responsible for countering illicit financial flows (IFFs) and for asset recovery.

Introduction

Lebanon is undergoing one of the worst economic crises in modern history, and corruption has played a key role in leading the country down the path of political instability and social unrest (World Bank 2022). Corruption permeates all levels and branches of government, as selection for public offices is based on ethnic and party loyalties and clientelism, leading to a bloated, inefficient and corrupt civil service.

Mounting corruption scandals at the highest levels of public administration have reduced public confidence in political institutions. Access to public services, such as courts, schools and clinics, depends on bribe payments or personal connections. International organisations, such as the International Monetary Fund (IMF), have conditioned financial assistance to Lebanon on implementing anti-corruption reforms.

Despite the recent approval of numerous laws designed to improve the country’s legal framework, implementation for several of them remains inadequate. For example, despite the approval of the Right to Access Information Law, transparency levels remain low. Other laws, such as the one that created the National Anti-Corruption Commission, have produced limited results due to insufficient political will.

Structural problems, such as the lack of an independent judiciary and prosecution service as well as immunity for high-level officials, have not been addressed as they ensure impunity for the corrupt.

Considering the profound economic crisis Lebanon is undergoing, it has become even more important to prevent the flow of illicit funds out of the country and to recover assets that have been stolen by corrupt public officials. These assets could be used to strengthen the national budget and to ensure the provision of basic public services. Past experience, however, is not encouraging as the country has enjoyed no success in asset recovery efforts.

Background

Lebanon is ruled according to a confessional power-sharing agreement. Eighteen religious denominations are part of a sophisticated mechanism, which seeks to ensure balance and proportional representation in government. This system permeates all levels of the public administration. Quotas determine who occupies public administration positions, meaning each political, ethnic and religious group is allotted a certain number of posts (and the power that comes with them). It is not a merit-based system. Selection for public offices is, thus, based on party loyalties and clientelism, leading to a bloated, inefficient and corrupt civil service (Shoeberlein 2019 p.8). This applies even to the highest positions: the religion-based power-sharing agreement requires the president of the republic to be Christian Maronite, the prime minister to be Sunni Muslim, and the speaker of the house to be Shia Muslim. It also impacts the composition of parliament, the cabinet and the judiciary (Bahout 2016).

While this agreement has been responsible for safeguarding the power balance between the different sects, it is repeatedly abused by political leaders, producing a system of governance with low transparency and accountability. Citizens are discouraged from participating in policy debates and political deadlocks have been frequent (OECD 2020 p. 13).

The justification for consensus in post-war Lebanon has been stability and legitimacy by the inclusion of all communities. The results, however, have been inefficiency, corruption and state capture. According to Charles Adwan (2016 p. 17) “stability has actually been maintained by corruption, which has reached such a magnitude, that it seems to be too high a price to pay for such fragile stability and legitimacy”.

Recent developments

Lebanon is currently living “in the midst of three mega-crises”, accordingly to the World Bank (2020). The first is an economic crisis. The second is the COVID-19 pandemic. Lastly, the repercussions associated with the harbour explosion at the Port of Beirut in August 2020.8181715e37f6 This explosion demonstrates the profound impacts of corruption in Lebanon. The port’s management structure was designed according to a power-sharing arrangement between local elites. According to Human Rights Watch (2020), this “maximized opacity, and allowed corruption and mismanagement to flourish”.

Smuggling, theft, under-invoicing and bribes are commonplace at the port. The connections between shipping line companies and politicians ensure that private interests override public concerns. Limited oversight also increases the risks of disasters (Reuters 2020). Investigations into the blast have also demonstrated many of the issues which generally ensure impunity for corrupt officials, including the lack of independence from the judiciary and the prosecutor’s office, and immunity for high-level officials (Human Rights Watch 2021).

The combination of these crises led the World Bank to estimate that the country’s gross domestic product (GDP) declined 10.5% in 2021, after a 21.4% contraction in 2020. Since 2019, the Lebanese economy shrank more than 58%, the highest contraction in the world (World Bank 2022).

Corruption is seen as the grease of this crisis-generating engine. For example, the IMF stated that Lebanon’s “high level of corruption” has severely impacted governance — and was seen as a key impediment to economic viability. A 2019 IMF report indicated that “concrete steps should be urgently taken to reduce corruption” (IMF 2019).

Similarly, the World Bank coined the expression “deliberate depression” to describe the current state of the Lebanese economy. It stated that the current depression “is orchestrated by the country’s elite that has long captured the state and lived off its economic rents”. It noted, with extreme concern, that the current crisis threatens Lebanon’s long-term stability and social peace (World Bank 2022).

The immediate result of these crises is an unprecedented increase in poverty rates, which now affect up to 82% of the population. Crumbling public services and the absence of social protection mechanisms have left most of the Lebanese people in an extremely precarious situation. Children, in particular, are suffering from a lack of educational opportunities and hunger, leading the UN Special Rapporteur on Extreme Poverty and Human Rights to assert that an entire generation is being sacrificed (De Schutter 2022).

Lebanese reacted by taking their demands and demonstrations to the streets. The year of 2019, especially, was marked by several civil demonstrations with an estimated 2 million citizens demanding the complete removal of corrupt politicians from power. Participants accused the political elites of exploiting the country’s resources for their benefits rather than serving the interests of the people and demanded new elections (Guechati & Chami 2022 p.280-284). The 2022 elections also signalled a move away from the major sectarian political parties with 13 independent candidates capturing seats in the country’s parliament. Though they remain in the minority in the 128-seat legislative body, this is a remarkable growth from 2018 when only independent candidate was elected (The Conversation 2022).

According to the OECD (2020), these compounding crises represent an opportunity and a strong incentive to restore public trust through open government reform. The call for reforms became, in the case of the IMF, a condition for the provision of financial assistance to Lebanon. The government promised an ambitious national anti-corruption strategy and included anti-corruption legislation in its reform plan as it sought to convince the IMF of its intentions. This is partly the explanation for the recent torrent of anti-corruption legislation (Chehayeb 2020).

Overview of corruption

Extent of corruption

Corruption remains widespread in Lebanon, permeating all levels and branches of government and the private sector. In 2021, the country scored its worst result in the Corruption Perception Index, with 24 points (out of a possible 100). Its score has been continuously declining since 2012, when it scored 30 points. In 2021, Lebanon ranked 154 out of 180 countries and jurisdictions.

Lebanon’s score in the latest Index of Public Integrity is 4.4 (out of 10) and its Transparency Index was 5.5 (out of 20). On both accounts, the country is behind the regional average, especially due to the absence of fiscal transparency and the scarcity of public resources needed to invest in e‑government solutions and administrative reforms.

Similarly, the World Bank’s World Governance Index pointed to worsening conditions both for the control of corruption and for the rule of law. In 2020, Lebanon reached the lowest percentile ranks on both accounts: 12% and 19%, respectively.

Lebanon scored 5.48 (out of 10) in the 2021 Basel AML Index, ranked 106 out of 203 countries and jurisdictions surveyed on the implementation of anti-money laundering regulations. According to the Tax Justice Network’s Financial Secrecy Index, Lebanon is ranked 77 out of 141 countries and jurisdictions, with a secrecy score of 65 (out of 100). The country scored particularly poorly in indicators pertaining to international cooperation. A recent study investigating the “shadow economy” in Lebanon estimated its percentual representation at 36.61% of the country’s GDP in 2018 (Kareh 2020).

According to the 2019 Global Corruption Barometer (GCB), bribery rates paid by the Lebanese people to access basic public services have increased exponentially in recent years. The overall bribery rate stood at 41%, the highest rate in the six countries surveyed in the Middle East and North Africa. A significant portion of citizens (36%) paid bribes when using public services such as utilities and the police.

Mounting corruption scandals in the highest levels of public administration have reduced public confidence in political institutions. According to the GCB, 79% of individuals surveyed thought that Lebanese government officials and members of parliament were corrupt. The level of corruption was thought to have increased by 68%, and a resounding 87% of Lebanese believed that the government was doing a bad job of fighting corruption (Transparency International 2019).

Forms of corruption

Petty bribery

Patronage and clientelism are a fixture in the relationship between government and citizens in Lebanon. Accessing basic public services frequently requires bribe payments, as the 2019 GCB shows. One in four Lebanese citizens had to pay a bribe to access either public schools and clinics, or to obtain IDs and utilities or to use the police or court system (Transparency International 2019).

The GCB also points to the widespread use of personal connections – otherwise known as wasta – to gain access to basic public services. A majority of Lebanese citizens surveyed (54%) used wasta to access these services in the previous 12 months. Accessing the courts, in particular, required the use of personal connections for 65% of Lebanese citizens (Transparency International 2019).

The private sector is not spared of bribe requests. The 2019 World Bank’s Enterprise Survey demonstrated that 21.8% of firms experienced at least one bribe payment request in Lebanon.

Grand corruption

Ongoing investigations have pointed to the involvement of high-level officials in recent corruption schemes in the country. The head of the central bank, Riad Salameh, was involved in a major scandal concerning a Ponzi scheme in October 2019. Swiss and French prosecutors stated that Salameh was involved in several corruption schemes, moved over US$300 million of public funds from the central bank to his brother’s company between 2002 and 2015, and laundered millions in Europe after purchasing luxury real estate (Alkoutami 2022). He also played a role in widespread capital flight and, possibly, tax evasion in instructing private banks connected to political elites to diminish the ability of the Lebanese government to access their savings, leading to losses of over US$69 billion (Balian 2022).

In November 2020, the former Minister of Foreign Affairs, Gebran Bassil, was the target of US sanctions due to his involvement in corruption, embezzlement of public funds and obstruction of reforms (Cortés & Kéchichian 2020: 120-124). In October 2021, the Pandora Papers revealed that top Lebanese officials used offshore tax havens, such as the current prime minister of Lebanon, Najib Mikati, possibly to hide and/or launder illicit funds (The Conversation 2021).

Political corruption

As Ahmad and Maghlouth (2016) argue, “entitlement for power is earned on sectarian grounds and permitted by political opportunity”, which increases the risk of corruption and mismanagement of public funds.

The power-sharing agreement between Lebanese groups also impacts efforts to hold public officials accountable for wrongdoings. Since public officials hold office, in part, due to belonging to a particular group, allegations of misconduct against them are often perceived as attempts to exclude the community represented by that official from the public administration and, hence, from participating in decision-making processes. (Ahmad & Maghlouth 2016, p.7)

Vote buying is also a significant issue, as the GCB demonstrates that nearly half of Lebanese citizens have been offered bribes in exchange for votes (Transparency International 2019). The 2022 parliamentary election was no different. The European Union Election Observation Mission to Lebanon (2022) concluded that widespread vote buying and clientelism distorted the level playing field and seriously affected the election. Inadequate campaign finance regulation leads to low levels of transparency and accountability.

Overview of anti-corruption

Legal framework

Lebanon’s anti-corruption legal framework has undergone substantial changes since 2017. The adoption of legislation on access to information, whistleblower protections and illicit enrichment laws have signalled a commitment to reform. Implementation of these laws, however, remains inadequate.

International conventions

Lebanon ratified the United Nations Convention against Corruption in 2009 and the United Nations Convention on Organized Crime in 2005. The country has not signed the Arab Anti-Corruption Convention, unlike most of its neighbours.

Access to information

Lebanon adopted its Right to Access Information Law in 2017. However, it is considered “relatively weak overall” by the Global Right to Information Rating. Despite its wide scope, encompassing all levels of the public administration, “there are limited obligations to assist [information] requesters, no obligation to transfer requests which arrive at the wrong public authority or to respond as soon as possible, and strict limitation on the re-use of the requested information” (Global Right to Information Rating 2017).

The law also provides for several exceptions which have been deemed illegitimate and have not been harm-tested. In addition, there is no public interest override procedure, and a number of secrecy laws were preserved. Another concern is that the system of appeals hinges on the National Anti-Corruption Commission, which has not yet been fully set up. As a consequence, the Lebanese legislation scored 70 (out of a possible 150 points) in the Global Right to Information Rating, placing Lebanon at 102 among 136 countries and jurisdictions assessed (Global Right to Information Rating 2017).

There are other issues with the implementation process. As it relates to active transparency, most municipalities, as well as entities at other levels of government, do not publish information online as the law requires. On the passive transparency front, the 15-day deadline to respond to freedom of information (FOI) requests is often disrespected, and most public bodies have not designated an employee to be responsible for receiving these requests (Transparency International & The Lebanese Transparency Association 2018, p.6).

Recent studies conducted by the Gherbal Initiative demonstrated the challenges in implementing this law. In 2020, FOI requests for annual financial statements were submitted to 200 public entities, but only 47 provided adequate responses. Over 100 entities simply did not respond, including the Lebanese parliament, while 17 provided only partial responses. The reasons for refusing were varied, but they all signal a lack of political will for transparency (Merhej 2020, p.16).

To address these issues, the Ministerial Anti-Corruption Committee, with the assistance of the OECD and the UNDP, adopted the National Action Plan to Implement the Right to Access to Information Law in 2020. The plan seeks to map out the main obstacles to implementing the law and it details action plans to overcome them, identifying the parties responsible for carrying out said plans and setting deadlines for completion.

Another relevant piece of legislation concerning transparency is the 2018 Law Enhancing Transparency in the Petroleum Sector. It seeks to establish transparency requirements to petroleum related activities and, in doing so, to prevent the gains of this promising economic sector from being captured by the country’s elites (Merhej 2021, pp.23-24).

Whistleblowers protection

In 2018, parliament approved Law n. 83 on Protecting Whistleblowers. It asserted that the act of reporting suspicions of corruption does not constitute a violation of professional confidentiality in Lebanon. The law covers all individuals holding public office and it defines corruption as the official exploitation of power. This means that the legislation is wholly inapplicable to the private sector (Saddy 2019).

The law protects whistleblowers from all forms of retaliation by employers and any personal harm, including threats and violence against them and their families. It stipulates a fine of up to US$1,000 for anyone who retaliates against a whistleblower (Saddy 2019).

Much like the Right to Access Information Law, this legislation’s full implementation also depends on a functioning National Anti-Corruption Commission (NAAC), something that has not yet materialised. According to the law, the NACC is responsible for ensuring that whistleblowers are protected from retaliation and for rewarding them in case their disclosure leads to the recovery of funds or the prevention of financial loss for a governmental entity (Saddy 2019).

Despite these advances, there are questions over whether Lebanon’s archaic defamation laws could still be used to target whistleblowers. Considering the increased hostility from both official security forces and militias towards journalists and activists, there are also doubts over whether this legislation will be sufficient to protect those who expose the wrongdoings of powerful individuals (Chehayeb 2020).

Beneficial ownership transparency

Lebanon does not possess one single law regulating transparency as it pertains to beneficial ownership, but rather a collection of laws and regulations. A 2001 Central Bank Circular introduced, for the first time, the definition of beneficial ownership, which has gone through many changes since then. In 2015, legislation began requiring banks and financial institutions, as well as some designated non-financial business professionals, to identify the beneficial owners of their clients and to verify their documentation. The Lebanese Commercial Law also requires companies to identify their beneficial owners upon registration (Tohme et al. 2022).

More recently, parliament enacted Law n. 106/2018 to counter tax evasion. It defines a beneficial owner as “any natural person who actually or ultimately owns or controls, directly or indirectly, any activity implemented by any natural person or legal entity on the Lebanon territory, regardless of his place of residence”. It also introduced penalties for those that fail to provide or provide false information regarding beneficial ownership (Tohme et al. 2022).

While there are a number of sources for information on beneficial ownership, including private sector entities and the commercial registry, there is no general, public and easily available beneficial ownership registry in Lebanon (Tohme et al. 2022, p.11).

This issue has garnered more attention with efforts to identify the parties responsible for the explosion at the Port of Beirut (Transparency International 2021), but both the public and the private sector have little interest and knowledge about the impact of beneficial ownership transparency on anti-corruption and tax collection efforts, for example (LTA 2022).

Anti-money laundering

Lebanon has been a part of the Middle East and North Africa FATF-style body (MENAFAT) since its foundation. Following its 2009 mutual evaluation report, the country was placed under a regular follow-up procedure until 2017, when its 9th follow-up report was approved by the FATF’s plenary.

This was due, in large part, to the approval, in 2015, of Law n. 44 on Fighting Money Laundering and Terrorist Financing. This legislation expanded the list of predicate offences to money laundering, including corruption. It also subjected financial institutions to stricter AML/CFT controls by requiring them to not open anonymous or shell accounts, to identify and assess risks related to business relationships and to apply costumer due diligence measures on both permanent and transient customers. Finally, the law also improved provisions related to suspicious transaction reports (MENAFATF 2017).

In March 2022, Lebanon updated its money laundering and terrorist financing national risk assessment. It concluded that “higher-risk money laundering crimes remain associated with corruption, tax evasion, and illicit drug trafficking”. Corruption associated money laundering is thought to employ more developed and complex methods, including the misuse of legal persons and the exploitation of the financial system.

The assessment also recognised the impacts of the financial and economic crisis in reducing the government’s capacity to exert control and reduce money laundering risks. It noted the crisis’ impact on shrinking the banking and financial sector in Lebanon and in increasing its dependence on cash transactions.

In July 2022, parliament approved an amendment to the bank secrecy law that allowed for the lifting of bank secrecy by the central bank, tax and judicial authorities and the Banking Control Commission in investigations of money laundering, terrorism financing and illicit enrichment. The president, however, declined to sign this bill into law and returned it to parliament, arguing that it needed further improvements (Reuters 2022). Approval of such legislation was one of the conditions for a loan provided by the IMF to ease the economic crisis in Lebanon (Vazquez 2022).

Previous versions of the law, however, envisioned a wider scope, allowing authorities to lift bank secrecy to investigate all financial crimes. There were also other changes that risk contradicting the IMF’s condition. Banks that fail to provide the information required by investigators will receive a reduced penalty and the law does not provide for retroactive effects, meaning that banking information from before the approval of the law will not be subject to these restrictions (Al Hasan 2022).

Asset recovery

Asset recovery has received increased attention from the Lebanese public in the context of the recent economic crisis. Since 2019, banks have imposed controls on the withdrawal and transfer of funds, but this has not prevented US$6 billion from being illegally transferred out of the country (Financial Times 2020). There are allegations, however, that the political elite has made a concerted effort to thwart all efforts to recover these funds (Zoghaib 2020).

According to the Stolen Asset Recovery Initiative’s (StAR) Asset Recovery Watch Database, Lebanon has not initiated a single case to recover assets stolen by corrupt officials since 1990 (Messick 2020).10e641086680 This is the result of a combination of factors, such as a lack of political will to implement the necessary legal and institutional reforms, as well as to invest the resources needed for asset recovery efforts to be successful.

Other issues include the lack of an independent judiciary, the absence of an effective national strategy for asset recovery and the constitutional immunities afforded to high-ranking officials, such as the president and ministers (Tohme 2020). The absence of a specialised unit dedicated to asset recovery has been pointed to as one of the major impediments to more effective asset recovery efforts (Messick 2020).

Swiss authorities declined a request made by Lebanese authorities to freeze assets that had allegedly been illegally transferred to Switzerland. In denying this request, the Swiss Foreign Ministry noted that there was insufficient information to demonstrate the unlawful origin of the assets and their placement (Business News Lebanon 2020). Elsewhere, in Luxembourg and France, Lebanese civil society organisations have filed suits to obtain the restitution of assets acquired by Lebanese officials under suspicious conditions (Sherpa 2021).

Recently, some legal reforms have been enacted, and they may contribute to strengthening asset recovery efforts. For example, in September 2020, parliament adopted Law n. 189, the Financial Disclosure and the Punishment of Illicit Enrichment Law. It established a comprehensive system for asset and interest declarations that applies to most of the public sector. Public officials are required to present declarations upon appointment, when exiting public office and, in an innovation brought on by this law, every three years (UNDP 2020). Declarations became extremely detailed, requiring officials to provide justification for revenue streams and assets owned or acquired, including moveable and immoveable assets in Lebanon and abroad, such as bank accounts, cars, real estate and luxury goods (Merhej 2020).

There are also improved provisions on sanctions applicable to those that fail to present their asset and interest declaration, such as a salary freeze, for example. For those that present false information, penalties range from substantial fines to up to a year in prison (Merhej 2020).

The offence of “illicit enrichment” has been brought into line with the provisions of the UNCAC, defined as a significant increase in assets that cannot be reasonably explained by legitimate sources of income. Penalties include three to seven years in prison, fines of up to 200 times the perpetrator’s official wage and confiscation of the assets acquired illegally, to the benefit of either the state or its rightful owners (Merhej 2020). There are, however, doubts about whether this law applies to the president, prime minister, ministers, and members of parliament. The decision about this may fall to the judiciary, which suffers from a lack of independence and constant political interferences (Merhej 2021, p.38).

Another concern is that the National Anti-Corruption Commission, which has not yet been fully established, has been charged with receiving these declarations and ensuring their compliance with the law (Merhej 2020).

As part of the efforts to facilitate international cooperation, Lebanon published an Asset Recovery Guide (available only in Arabic), which details the process for submitting requests for information and presents some of the databases available in the country. The guide also lays out the possibility of requesting not only information but also the freezing and forfeiture of bank accounts and other moveable or immoveable assets (Republic of Lebanon 2020a). It also adopted the Law n. 214, relating to the recovery of assets resulting from corruption, which sets up a national fund to which recovered assets will be diverted to. This fund, when fully operational, will support asset recovery efforts, and it will be used to compensate victims and protect whistleblowers (Tohme 2020).

Institutional framework

A number of institutions play relevant roles in efforts to prevent and combat corruption in Lebanon. Some of these institutions are decades-old, while others have only been recently created and are not yet fully set up.

Ministerial Anti-Corruption Committee

Created in 2011 by Decision of the Prime Minister n. 156, the committee is composed of the minister of state for administrative reform, the minister of finance, the minister of justice and the minister of the interior and municipalities, and is headed by the prime minister.e0d0c67f9077

The Ministerial Anti-Corruption Committee is supported by a technical committee, which is headed by the minister for administrative reform and representatives of several entities, such as the Prime Minister’s Office, the ministries of justice and of the interior, the civil service board and the central bank.

It constituted a “formal mechanism for the government to address the issue of corruption in a scientific, comprehensive, impartial and coordinated manner, in a way that involves the judicial, oversight and banking authorities, with the participation of civil society, the media, the private sector, and regional and international partners” (Republic of Lebanon 2020b).

The committee was ultimately responsible for the development of The National Anti-Corruption Strategy 2020-2025, which was considered by the OECD (2020, p. 23) a “significant step forward” in the country’s anti-corruption efforts, building on the existing framework and the international agreements to which Lebanon is a party. In the opposite direction, some experts note that, in the past, Lebanese elites also signalled a commitment to reforms to obtain foreign aid, only to fail to implement them (Merhej 2021, p. 13). As mentioned, the IMF, during recent loan negotiations, insisted that any financial assistance be tied to structural reforms and anti-corruption measures (Merhej 2021, p.14).

This strategy is the result of a long process of development that started in 2009, resulting in the country’s first document of its kind. It presents a diagnosis of the major factors that contribute to Lebanon’s severe corruption crisis. In summary, the strategy lays out three wide-ranging objectives that will be sought by all parties involved in its implementation: (i) enhancing transparency; (ii) activating accountability; and (iii) ending impunity. Its implementation, however, suffered a blow with the resignation, in August 2020, of the government of Prime Minister Hassan Diab which had championed the strategy (Merhej 2021 p.43).

Judicial system

The Lebanese judicial system is composed of: (i) ordinary courts; (ii) administrative courts; and (iii) religious courts.101008bf4f0f Only the first two will be discussed in this answer. The separation between the judicial system and the administrative justice system is inspired by the French model, which also distinguishes between the two functions.

The administrative justice system allows citizens to challenge administrative acts and decisions, and it holds public officials accountable for breaches of the law. It is made up exclusively of the State Council, which is responsible for both advisory and adjudicative roles within that system. Meanwhile, ordinary courts have jurisdiction over civil and criminal cases. The judicial system is composed of first-level courts, the court of appeal, and the court of cassation (Mansour & Daoud 2010, p.13-14).

Although the Lebanese constitution guarantees the separation of powers and determines that judges are independent, in practice, the country’s judicial system is deeply flawed and subject to political interference and corruption. According to the International Commission of Jurists (ICJ 2017), the Lebanese judiciary’s legal framework does not guarantee judicial independence in either the institutional and financial spheres or at the individual level for judges.

The minister of justice sets the budget for the judiciary as a whole. In general, it amounts to around 0.7% of the country’s entire budget. The executive branch is also responsible for the administration of the courts, leaving the justice system vulnerable to political pressure in the form of strained resources (LTA & TI 2018, p.16). For example, in 2019, the government suggested cutting resources meant for the Judges’ Cooperation Fund, which provides health guarantees and education grants for judges’ children, by 40%. This had already happened in the past, and it fits a pattern of threatening judges in order to subject them to the executive’s authority (The Legal Agenda 2019).

Political pressure may also be exerted over judicial judges through the High Judicial Council (HJC).5a4b1c8dedbc The HJC is responsible for conducting disciplinary proceedings against judges, and it also controls part of the selection and appointment process for them. This means that it plays a key role in the functioning of the judicial system. However, the HJC is also extremely vulnerable to political influence since the Council of Ministers, on the recommendation of the minister of justice, is responsible for appointing eight of its ten members (ICJ 2017a; ICJ 2017b).

The political nature of the appointment of most members of the HJC does not only subject it to political interference but also to paralysis. Recently, when seven of its ten members’ terms of office expired, the council’s work was interrupted due to a dispute among the country’s elites about their substitutes. As in other areas of government, the lack of objective and merit-based criteria for appointments to the High Judicial Council gives way to sectarian infighting between the different groups within Lebanese society (Assaf 2021).

Many of these issues can be found in the administrative justice system, where the State Council Bureau, which plays a similar role to that of the HJC for the judicial justice system, is mostly comprised of non-judges appointed by the minister of justice (ICJ 2018a, p.4).

Religious interference is also present in the HJC. The most important positions at the council are allocated on a sectarian basis,5e670ba52a6e and this institutionalisation of religious affiliation leads political leaders to take advantage of efforts to ensure balance between different communities to interfere in the appointment of judges (LTA & TI 2018, p.16).

Additionally, the system for evaluating and promoting judges was found to be opaque and vulnerable to cronyism, with political actors and, especially the executive branch, able to exercise undue influence over these proceedings, which should be, according to international standards, objective and impartial. In particular, the minister of justice plays a significant role in the selection and appointment of judges, and he is also empowered to initiate disciplinary proceedings against them, referring matters to the disciplinary council. Pending a final decision, the minister of justice can suspend judges from official duty (ICJ 2017a, pp.11-14).

On the other hand, judges are very rarely, if ever, prosecuted for corruption or other acts of malfeasance. This is the consequence of a severely deficient framework for judicial accountability. There are very few provisions on the standards of conduct for judges, and the basic principles of judicial ethics is not an enforceable piece of legislation. As a result, infractions are unclearly defined, as are the accompanying sanctions (ICJ 2017a, pp.3-4).

This has a direct impact on the judges’ abilities to curb corruption. They are subject to tremendous pressure and numerous forms of retaliation if they proceed with investigations against members of the government. In summary, “the lack of an independent judiciary is a major impediment for the implementation of anti-corruption laws” (Merhej 2021 p. 18). A draft law on the independence and transparency of the judiciary has recently been submitted to parliament, but its approval remains distant.

Prosecutor’s office

The structure of the Office of the Public Prosecutor (OPP) is set out in the Lebanese Code of Criminal Procedure and in Decree-Law n. 150/83. The OPP’s main function is to initiate public action in criminal matters, bringing and prosecuting criminal charges. Prosecutors are also granted investigative powers, meaning they can undertake any investigative measure deemed necessary to gather information about the offence in question (ICJ 2018b, p.3).

Prosecutors in Lebanon also have the power to make decisions of a judicial nature, including supervising the custody of suspects, as well as holding and interrogating anyone they feel may be involved in the commission of the crime. This has given rise to concerns about potential abuse and disregard for basic guarantees and due process rights (ICJ 2018b, p. 4).

In Lebanon, prosecutors are magistrates, and they are integrated into the judiciary – their selection and appointment procedures are the same as for judges. Individuals that complete their training at the Institute of Judicial Studies can be appointed either as judges or prosecutors, pending an agreement between the High Judicial Council and the minister of justice. The head of the OPP is appointed by cabinet decree, based on a recommendation by the minister of justice. While there is no international consensus on the best method to appoint individuals for this type of office, the lack of a transparent process, with objective and merit-based criteria, raises concerns about political interference in the prosecution services (ICJ 2018b, p. 13).

Individual prosecutors also lack independence, according to the International Commission of Jurists (2018b, p.15). They are bound to the head of the OPP’s authority, who may give oral or written instructions for the conduct of a prosecution. The lack of transparency and accountability in this command structure may lead to abuses of power, conflicts of interest and human rights violations. There are substantial risks of undue or improper interference emanating from the OPP, which is appointed by the executive branch. In turn, Decree-Law n. 150/83 also provides that prosecutors are subject “to the authority of the minister of justice”. The lack of clarity over how this authority may be exercised presents a considerable risk of external and political interference.

The High Judicial Council is responsible for overseeing the careers of prosecutors, though only one of its ten members is a prosecutor – the head of the OPP, the public prosecutor at the court of cassation. This contradicts international recommendations that recruitment and supervisory bodies be composed of a majority of members from within that professional field, in order to avoid political or other external interference (ICJ 2018b, p.8).

Lastly, there are indications that the OPP has insufficient human and financial resources to handle its cases. It does not have financial independence as the minister of justice is exclusively responsible for setting the OPP’s budget (ICJ 2018b, p.19).

National Anti-corruption Commission

The Lebanese National Anti-Corruption Commission (NACC) was originally mentioned in the 2017 Right to Access Information Law. Its responsibilities included receiving complaints pertaining to the application of the law and investigating them. It has the power of issuing binding decisions on the disclosure of documents requested by citizens.

The NACC can also provide advice to the relevant authorities on the implementation of this law, and it should help educate citizens, raising awareness to the importance of exercising the right to access information.

Subsequent legislation also entrusted other functions to the NACC. The 2018 Law on the Protection of Whistleblowers determined that reports on corruption and other irregularities should be presented to the commission, which had the responsibility of carrying out investigations and providing all the necessary legal and physical protections to whistleblowers as well as determining the appropriate compensation for them (Merhej 2021, p. 19).

In 2020, the Lebanese parliament adopted the Law on Combating Corruption in the Public Sector and Establishing the National Anti-Corruption Commission (Law n. 175). It establishes that the NACC is also responsible for: monitoring corruption costs, statuses, causes and efforts to prevent and counter corruption; for implementing relevant international conventions to which Lebanon is a party; and for conducting studies and research in the areas of transparency, integrity and anti-corruption. NACC was also entrusted with the authority to submit for prosecution any violation committed by public officials and to impose restrictions on them, such as travel bans and lifting financial privacy (Saddy 2019).

The commission is made up of six members, with six-year non-renewable terms: two retired judges, elected by all administrative and judicial judges on the invite of the High Judicial Council; one lawyer, one accountant, one expert on banking or economics and one expert on governance, public budgeting or anti-corruption, each to be chosen by the Council of Ministers from a list of three possible candidates picked, respectively, by the Bar Association, the Lebanese Association of Certified Public Accountants, the Banking Control Commission and the minister of state for administrative reform (Moghabat 2021).

This selection process has been criticised as undemocratic and subject to sectarian disputes (Chehayeb 2020). The potential for political interference in the appointments of NACC members is clear, either from the direct role played by the Council of Ministers and the minister for state reform, or from the executive branch’s indirect control over the HJC and the Banking Control Commission (Merhej 2021, p.32).

Although the legislation established a three-month deadline for the selection of the members of the commission, it was not until January 2022 that all of its members were appointed. However, they still have not adopted their by-laws, in accordance with the law, which leaves the NACC dysfunctional, despite its substantial responsibilities.

Court of accounts

The court of accounts was established in 1983 by Legislative Decree n. 82. It is the Lebanese supreme audit institution, responsible for monitoring public funds and their spending. The court determines the validity and legality of transactions and accounts, ensures that the use of public funds is in line with existing regulations and prosecutes those that violate the laws. Most public entities are subject to its jurisdiction, including states and municipalities.

Institutionally, the court of accounts is not independent, as it is linked to the Office of the Prime Minister. Its president is appointed by the Council of Ministers, on the recommendation of the prime minister. In the past, the position of president has been left vacant for a number of years, paralysing the institution (Wickberg 2012). In recent years, there have been multiple cases of political interference in cases handled by the court (LTA & TI 2018, p. 30).

There are a number of other issues that hinder the development of the court of accounts’ work. There are severe limitations to both its financial and human resources. Lack of staff and insufficient budget have been mentioned as impediments to the fulfilment of the court’s mission. The court cannot appoint its own staff, depending on the Prime Minister’s Office, which exposes it to political interference (LTA & TI 2018, p. 32).

Civil society organisations have also criticised the lack of transparency and integrity in the court of accounts. There is no specific code of ethics or code of conducts applicable to the court’s staff. Many of its more relevant documents, including annual reports, are not easily available in the court’s website, and even basic details about its mission, strategy and regulation are difficult to find. This lack of transparency hinders society’s engagement with the court, especially in its potential for political or technical support, or in reporting cases of corruption and wrongdoing for investigation (Moghabat 2022a, p.6)

Ministry of the Interior and Municipalities

Both the Internal Security Forces (ISF) and the General Security are found within the Ministry of the Interior and Municipalities. They are Lebanon’s two law enforcement agencies, subject to the authority of the executive branch. As in other sectors of the government, the sectarian power-sharing system is present in the police forces, risking their autonomy from political interference, especially in cases of corruption, and increasing the potential for conflicts of interest (LTA & TI 2018, p.34).

The directorate-general of the ISF includes the Special Criminal Investigations Division, which is made up of a series of smaller specialised units, including the Financial Crimes and Money Laundering Repression Bureau (MENAFATF 2009, p. 29). The ISF, like other governmental entities, suffers from a lack of resources necessary to fulfil its duties in the whole of the Lebanese territory (LTA & TI 2018, p.34).

The Office for the Prevention of Financial Crimes and Money Laundering in the Judicial Police Unit of the ISF may receive requests for information, including on stolen assets, from member states of INTERPOL through the National Central Office, or from the Liaison Division of the Council of Arab Ministers of the Interior through the Beirut Liaison Division of the Directorate-General of the ISF (Republic of Lebanon 2020a).

Accredited liaison officers at embassies can also cooperate and request information from the directorate-general of the ISF. Such requests, however, are subject to the approval of the Office of the Public Prosecutor (Republic of Lebanon 2020a).

Ministry of Justice

As noted, the minister of justice plays an important role in appointing judges and other high-level officials within the judicial system, including the Office of the Public Prosecutor. The minister is also empowered to initiate disciplinary proceedings against judges. Thus, it can serve as a tool for political interference in cases and investigations of corruption across the country.

The Ministry of Justice is the central authority responsible for receiving requests for mutual legal assistance, including those related to the recovery of funds derived from corruption or transnational organised crime. The requests are initially submitted to the Ministry of Foreign Affairs, which then sends them to the Ministry of Justice. Depending on the case, the requests will be processed by the Office of the Public Prosecutor or by ordinary courts (Republic of Lebanon 2020a).

Office of the Minister for Administrative Reform

The Office of the Minister for Administrative Reform (OSMAR) was created in 1993 (Ahmad & Al Maghlouth 2016). Since then, it has been the focal point for public management reforms, transparency and digitalisation initiatives, and anti-corruption efforts. It developed the National Action Plan to Implement the Right to Access Information Law, and it played a key role in the development of the national anti-corruption strategy. OSMAR has worked on issues ranging from public procurement to human resources management and capacity building.

Additionally, OSMAR handles efforts to increase public accountability and to increase dialogue between civil society organisations and the public sector. It coordinates the open government agenda with the goal of joining the Open Government Partnership (OGP). Since 2017, with the launch of the Digital Transformation Initiative, it also became responsible for digital transformation efforts, which have an impact on preventing corruption and, potentially, improving public services. In this capacity, OSMAR developed the Lebanon Digital Transformation Strategies to Action 2020-2030.

Critics, however, have called OSMAR a “donor-funded think tank”, unable to implement real reforms and e-government procedures because it never garnered political and bureaucratic support from the Lebanese political establishment (El-Zein & Sims 2004, p.286). There are also structural issues: since it is an office headed by a minister of state, it is not entitled to make executive decisions or impose changes on other public institutions; it plays a purely consultative role (Merhej 2021, p.50).

Ministry of Finance

The Ministry of Finance is responsible for setting the budget for the entire public administration and controlling public expenditures (Kareh 2020, p.116). The adequate funding of the country’s anti-corruption institutions depends on the Ministry of Finance’s determinations. This has become a more difficult task as the economic and financial crisis severely impacted tax revenues in Lebanon.

Collecting taxes and other forms of state revenues is also within the purview of the Ministry of Finance and, in this capacity, it is responsible for reducing or eliminating tax evasion. Significant efforts have been made in recent years by Lebanon to strengthen international cooperation tools designed to curb tax fraud and evasion, and related money laundering, including the adherence to the Global Forum on Transparency and Exchange of Information for Tax Purposes, in 2016, and the signing of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, in 2017 (OECD 2016). After adopting a host of internal regulations, Lebanon commenced exchanges under the Automatic Exchange of Information framework in 2018 (OECD 2021).

It has also published norms relating to beneficial ownership transparency. Legal persons must provide information on any changes relating to their beneficial owners to the tax department, which is located within the structure of the Ministry (Tohme et al. 2022, pp.11-12).

Special Investigation Commission

The Special Investigation Commission (SIC) was established by the 2001 AML legislation (Law n. 318). It is a part of the Central Bank of Lebanon and serves as the country's multifunction financial intelligence unit (FIU).

The SIC is made up of four members: (i) the governor of the Central Bank; (ii) the president of the Banking Control Commission; (iii) a judge appointed to the Higher Banking Commission; and (iv) an individual appointed by the Council of Ministers. The secretariat of the SIC plays an important role, leading the financial investigation administrative unit, the audit & investigation unit, the compliance unit, and the information technology & security unit (MENAFATF 2009 p. 28).

It has the power to investigate the application of AML procedures and to ensure that institutions, in both the financial and non-financial sectors, comply with regulations. The SIC is also responsible for exchanging information with equivalent foreign FIUs, contributing to efforts to curb illicit financial flows (MENAFATF 2009, p. 28).

Lebanon’s FIU receives suspicious transaction reports from obliged entities, and it investigates operations suspected of money laundering, corruption and terrorism financing. These operations may be referred to competent law enforcement authorities. Among its powers, the SIC can decide to lift the banking secrecy of an individual or of a legal person, if it suspects their bank accounts are being used to launder money, in favour of judicial authorities or of the Higher Banking Commission (MENAFATF 2009 p.43). The SIC is regarded as an independent entity with judicial status and, more recently, became empowered to decide on freezing of accounts and operations and on the attachment of burdens to moveable or immoveable assets when they are targets of investigations (MENAFATF 2017, p.19).

A relevant forum for discussing measures to curb IFFs is the National Committee for Coordinating AML Policies. Formed in 2002, it is comprised of the Central Bank’s Vice-Governor, the SIC Secretary General, representatives of the OPP, the Banking Control Commission, the Customs Directorate and the ISF. The committee assesses ML risks, keeps track of evolving international standards and recommends how these standards can be integrated into the Lebanese legal framework (SIC 2021, p.63).

Central Inspection Bureau

The Central Inspection Bureau (CIB) was established by Legislative Decree n. 115, in 1959. It enjoys jurisdiction over much of the country’s public sector, and counters corruption through periodic inspections and by investigating complaints received. For the purposes of art. 36 of the UNCAC, which focuses on specialised anti-corruption authorities, the CIB has been listed as one of the institutions responsible for countering corruption (UNODC 2016).

In essence, the CIB is an internal control institution, aimed at preventing and detecting corruption within public administration, especially by public officials. It is located within the structure of the presidency of the Council of Ministers and organised in layers, with the president at the top followed by a board and, below, by inspectors and general inspectors (Moghabat 2022b, p.13).

Inspections take place both regularly, according to an annual plan, and on an extraordinary basis, upon request or in case a complaint is received – the CIB’s website allows for the submission of reports on corruption by citizens. Inspectors are empowered to impose administrative sanctions on public officials responsible for irregularities. These sanctions range from reprimands and suspension to demotion and dismissal. The CIB may also provide solicited or unsolicited advice to administrative authorities, coordinate joint actions between different institutions and undertake studies and inquiries. (Moghabat 2022b, pp.7-8).

Role of other stakeholders

Civil society

The Lebanese constitution guarantees freedom of assembly and association, and, according to the Bertelsmann Foundation (2022), “Lebanon’s civil society is the most vibrant in the Arab world”. Widespread corruption in post-war Lebanon sparked a growth in civil society movements, including the formation of the Lebanese Transparency Association in 1999. Business associations began acting against corruption, which hampered investments and reduced their competitiveness. International organisations and western development agencies began supporting integrity related projects (Adwan 2016, p.13).

More recently, civil society organisations, along with scholars, public officials, and like-minded parliamentarians, played a key role in the approval of anti-corruption legislation that sought to align the country with requirements set forth by the UNCAC (El-Seblani 2020).

Civil society has also played a major role in promoting the implementation of the Right to Access Information Law. The Gherbal Initiative has made efforts to produce visualisation tools for the data collected from FOI requests and it has built websites for some municipalities to publish their information. Alongside Human Rights Watch, it has also evaluated the implementation of this law by public entities (Chehayeb 2020). Other organisations, such as Nahnoo, ShinMimLam and Open Data Lebanon have worked to fill the gaps left by public administration in ensuring the right of access to information to all Lebanese people (Merhej & Thebian 2020).

The right to protest has been repeatedly violated by Lebanese authorities, which have reacted with violence to protesters. For example, families of the individuals killed in the Port of Beirut blast have been repeatedly attacked by security forces during demonstrations (Houri 2021). Structural reform, anti-corruption measures and an independent judiciary have been some of the demands made by protesters since 2020 (The New Arab 2020).

Media

Freedom of the press has been in decline in Lebanon over the past few years. According to Reporters without Borders’ Press Freedom Index, Lebanon’s score has fallen from 65 points to 46 points (out of a possible 100), between 2021 and 2022. The country now ranks 130 among the 180 countries surveyed by the organisation.

Lebanese media is controlled by a handful of individuals belonging to local dynasties or belonging to political parties that control press vehicles and use them as weapons in political disputes. According to the Media Monitor Ownership, 78% of the Lebanese press is politically affiliated, generating a media landscape shaped by partisan and instrumentalised journalism. Since the 2019 protests, though, alternative media outlets have grown, giving voice to marginalised groups, investigating critical issues in Lebanese society, and promoting anti-establishment candidates (Gibon 2021).

These independent journalists and media outlets, however, suffer from the weaponisation of the justice system to prosecute them. They are frequently ordered to pay fines or are sentenced to prison terms in absentia. This has a chilling effect on the press (Reporters without Borders 2022a).

More recently, the Lebanese Minister of Information, George Kordahi, signalled plans to establish a committee to supervise what is broadcast and published in the media. This comes on top of increased repression of journalists in the country (El Houri 2021). Reporters without Borders (2021) has kept a tally on the number of journalists that have been victims of harassment and threats since the Port of Beirut explosion in 2020 – 27 journalists – not to mention the murder of political commentator Lokman Slim in 2021, and photographer Joseph Bejjani in 2020. In total, freedom of the press was violated more than 140 times between October 2020 and February 2022. (Reporters without Borders 2022b).

Finally, the financial crisis affecting Lebanon, coupled with the effects of the explosion at the Port of Beirut, has led media outlets to make substantial budget cuts, affecting their ability to adequately cover the government and to produce investigative pieces (Reporters without Borders 2022a).