An update to our last post about Lebanon. The American invasion is a hot topic in the Middle East today. Tim just posted some news about Israel. Now, a Lebanese newspaper has come out with a new article: “FATCA, la loi américaine qui bouleverse le secteur bancaire libanais” (FATCA, the American law which is turning the Lebanese banking sector upside-down). I’ve translated two interesting quotes below. (I’ve also included the original text, since most people here speak much better French than me).

Le problème est que la FATCA entre en conflit avec d’autres lois nationales, comme la loi sur le secret bancaire datée du 3 septembre 1956, relative au secret bancaire au Liban. Elle oblige toutes les institutions financières étrangères (IFE) à fournir les détails des comptes de leurs clients américains. « Dans une tout autre circonstance, un pays ignorerait complètement la loi américaine, car les lois nationales sont hiérarchiquement supérieures », explique l’avocat spécialisé en finance internationale, Ghassan Souaiby. « Dans le cas de la FATCA, c’est beaucoup plus difficile, vu qu’elle a été dotée de moyens de coercition efficaces qui ne laissent pas beaucoup de choix aux IFE », ajoute-t-il. Et par IFE, la loi comprend les banques commerciales, les banques d’investissement, les fonds d’investissement, les sociétés d’assurances et les sociétés de change.

Translation: The problem is that FATCA conflicts with other national laws, such as the banking secrecy law of September 3, 1956, on banking secrecy in Lebanon. It requires all foreign financial institutions (FFIs) to provide details of the accounts of U.S. customers. “In any other circumstance, a country completely ignores U.S. law, because national laws are above them in the hierarchy”, explains Ghassan Souaiby, a lawyer specialising in international finance. “In the case of FATCA, this is much more difficult, since it has effective means of coercion that do not leave much choice for FFIs”, he added. And the law defines FFIs to mean commercial banks, investment banks, investment funds, insurance companies and exchange companies.

This is an excellent description of FATCA: a “means of coercion” to get banks to violate the laws and standards of their own societies and to turn the hierarchy of international law upside down. Another banker goes on to say something interesting; maybe I’m reading too much into his words, but he seems to be wondering if Lebanon can preserve its privacy laws even in the face of FATCA, instead of shredding those laws the way the Europeans have done:

Les banques libanaises se trouvent ainsi confrontées à une situation inédite. « Pour le moment aucune décision finale n’a été prise, mais tout est mis en œuvre pour préparer notre banque à appliquer la FATCA », confie Antoine Dagher, responsable de la conformité du groupe Byblos Bank. « Toutes les banques libanaises attendent aujourd’hui des directives du gouverneur de la Banque du Liban (BDL) à ce sujet, pour agir de manière cohérente au niveau national. La BDL doit trouver un mécanisme pour que nous puissions appliquer la FATCA sans pour autant entraver la loi sur le secret bancaire », ajoute M. Dagher.

Translation: Lebanese banks are thus faced with an unprecedented situation. “At the moment no final decision has been taken, but we are doing everything in our power to prepare our bank to apply the FATCA”, said Antoine Dagher, head of group compliance at Byblos Bank. “All Lebanese banks are now awaiting directives from the Governor of the Bank of Lebanon (BDL) on this subject, to act in a coherent manner at the national level. The BDL must find a mechanism so that we can apply FATCA without impeding the law on bank secrecy”, says Dagher.

Israel and Lebanon both face a dangerous outside invader. Would it be too much to ask that a spirit of peace and brotherhood prevailed in the Middle East so that the two sides could join forces and fight off the imperialists who are coming to steal their people’s wealth?