Lebanon extends deadline to submit data for forensic audit, says finmin

Lebanon's caretaker Finance Minister Ghazi Wazni announced on Thursday a three-month extension of a deadline to provide all data required for a forensic audit of the central bank after it declined to submit some information, citing bank secrecy laws. The caretaker prime minister and three sources familiar with the matter have said that Banque du Liban (BDL) was withholding information needed by restructuring consultancy Alvarez & Marsal to begin the audit, which is a key demand for foreign financial assistance to help Lebanon tackle a financial meltdown.

Lebanon's caretaker Finance Minister Ghazi Wazni announced on Thursday a three-month extension of a deadline to provide all data required for a forensic audit of the central bank after it declined to submit some information, citing bank secrecy laws.

The caretaker prime minister and three sources familiar with the matter have said that Banque du Liban (BDL) was withholding information needed by restructuring consultancy Alvarez & Marsal to begin the audit, which is a key demand for foreign financial assistance to help Lebanon tackle a financial meltdown. "In these three months, the Lebanese government will try to secure the documents that will allow the company to carry out the (audit) contract," Wazni said in a televised news briefing following a meeting with Lebanon's president, the central bank governor and an Alvarez & Marsal official.

Prime Minister-designate Saad al-Hariri, named last month, has been trying to navigate Lebanon's sectarian politics to form a cabinet to bring in reforms needed to tackle the country's worst crisis since its 1975-1990 civil war, including banking paralysis, a currency crash and spreading poverty. BDL said in a statement on Wednesday that it had provided its own accounts for the audit, but that it should be the government that submits full state accounts to the turnaround specialist hired by Lebanon this year to "spare the central bank from violating legally binding bank secrecy laws".

The BDL statement had referenced a letter sent to the bank by Wazni that included an opinion from the justice ministry's legislation committee stating that bank secrecy did not apply to government or central bank accounts. President Michel Aoun on Thursday stressed the need for the government to commit to the audit, the presidency tweeted.

One source told Reuters that parliament may need to amend the bank secrecy law or temporarily suspend it. Deputy parliament speaker Elie Ferzli said in remarks carried on state news agency NNA on Wednesday that he opposed lifting the bank secrecy law for the audit.

The International Monetary Fund (IMF) and donors including France have pressed for the audit to tackle endemic waste and corruption for Lebanon to unlock financial aid. Lebanon's plight worsened after it defaulted on its huge foreign currency debt in March following years of financial engineering by the central bank to help fund the government.

The caretaker government failed to make progress in talks with the IMF for a bailout due to inaction on reforms and a domestic dispute over the size of financial losses.