Editing Economy of Lebanon (section)

== FATF analysis of Lebanon ==
In October 2024, the [[Financial Action Task Force]] (FATF) placed Lebanon on its "grey list," designating it as a jurisdiction under increased monitoring due to strategic deficiencies in countering money laundering and terrorist financing.<ref name=":8">{{Cite news |date=2024-10-25 |title=Lebanon placed on global money-laundering ‘grey list’ |url=https://www.ft.com/content/9b721d62-cef4-42b0-b80e-50b1683a68a6?utm_source=chatgpt.com |access-date=2025-03-30 |work=Financial Times}}</ref><ref>{{Cite web |last=john.crowley@ft.com |last2=Mitchell |first2=Jason |date=2024-11-28 |title=Lebanon at risk of FATF blacklisting |url=https://www.bankingriskandregulation.com/lebanon-at-risk-of-fatf-blacklisting/?utm_source=chatgpt.com |access-date=2025-03-30 |website=Banking Risk and Regulation |language=en-GB}}</ref><ref>{{Cite web |title=Lebanon added to money laundering ‘grey list’ |url=https://www.aljazeera.com/news/2024/10/25/lebanon-added-to-money-laundering-grey-list?utm_source=chatgpt.com |access-date=2025-03-30 |website=Al Jazeera |language=en}}</ref>

=== Background ===
Lebanon has faced a severe economic crisis since 2019, characterized by a collapsing financial system, sovereign default, and escalating public debt. The situation was exacerbated by the COVID-19 pandemic and the 2020 Beirut port explosion, leading to widespread poverty and infrastructure damage. In March 2025, the World Bank estimated that Lebanon's recovery and reconstruction needs amount to approximately $11 billion.

=== FATF Grey Listing ===
The FATF's decision to grey-list Lebanon was influenced by several factors:<ref>{{Cite news |date=2024 |title=Watchdog FATF places Lebanon on financial crime watchlist |url=https://www.reuters.com/world/middle-east/lebanon-grey-listed-by-financial-watchdog-fatf-two-sources-say-2024-10-25/?utm_source=chatgpt.com}}</ref><ref name=":8" />

* '''Ineffective Judiciary''': Concerns over the independence and efficiency of Lebanon's judicial system in prosecuting financial crimes.
* '''Cash-Based Economy''': Following the collapse of its banking sector in 2019, Lebanon's increased reliance on cash transactions raised alarms about illicit financial flows.<ref name=":8" />
* '''Terrorist Financing Risks''': The FATF highlighted that Lebanese authorities did not adequately address risks stemming from the activities of local paramilitary organizations.<ref name=":8" />

=== Implications ===
Being on the grey list subjects Lebanon to enhanced monitoring and may deter foreign investment, complicate remittances, and increase compliance costs for its financial institutions. The designation underscores the urgent need for comprehensive reforms to strengthen Lebanon's anti-money laundering and counter-terrorist financing (AML/CFT) framework.<ref>{{Cite web |title=Mutual Evaluation of Lebanon |url=https://www.fatf-gafi.org/en/publications/Mutualevaluations/Mutualevaluationoflebanon.html?utm_source=chatgpt.com |access-date=2025-03-30 |website=www.fatf-gafi.org}}</ref><ref name=":8" />

=== Government Response ===
In response to the grey listing, Lebanese authorities have committed to implementing a detailed two-year action plan, concluding at the end of 2026, to address the identified deficiencies and facilitate reassessment of Lebanon's status by the FATF.<ref>{{Cite web |last=Monitor |first=Euro-Med Human Rights |title=Negligence: One of the Causes that led to Lebanon being placed on the list of "Jurisdictions under Increased Monitoring – Grey List" by the Financial Action Task Force (FATF) |url=https://euromedmonitor.org/en/article/6604/Negligence:-One-of-the-Causes-that-led-to-Lebanon-being-placed-on-the-list-of-%E2%80%9CJurisdictions-under-Increased-Monitoring-%E2%80%93-Grey-List%E2%80%9D-by-the-Financial-Action-Task-Force-(FATF)?utm_source=chatgpt.com |access-date=2025-03-30 |website=Euro-Med Human Rights Monitor |language=en-US}}</ref>