A Camet
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Beirut, Lebanon – Last week, Maliha Badr Raydan received an unexpected call from the manager of her Bank Audi branch in Lebanon, informing her that her account had been closed.
“He said they [Bank Audi] had left a check for my account balance with a notary,” the Lebanese-British national told Al Jazeera. Accepting the check would make it difficult for Raydan to take legal action against the bank.
The alternative provided by the bank involves a form, obtained by Al Jazeera, which, if signed, waives customers’ rights to transfer their funds overseas in foreign currencies, or would take legal action to force the bank to do so.
Raydan is one of dozens of dual Lebanese-British nationals living outside Lebanon who have received similar calls from Bank Audi, one of the cash-strapped country’s biggest banks.
“In the last four days, we have received 35 or 37 cases,” Dina Abou Zor, a lawyer and co-founder of the Union of Depositors, a volunteer group providing legal assistance to people with disabilities, told Al Jazeera. the money trapped in the banks.
To make matters worse, the checks sent by the bank cannot be cashed anywhere, as insolvent Lebanese banks refrain from opening new accounts until they are supplied with hard currency, often locally referred to as “dollars”. costs “.
According to Abou Zor, this means that depositors have lost access to money deposited in their bank accounts.
“This check is just a paper signed by Bank Audi with no financial or legal value,” she said.
The funds apparently blocked in the accounts are US dollars that were deposited before October 17, 2019, when mass protests swept Lebanon against the country’s ruling parties and banks. Frustration with banks had stemmed from the withholding of foreign currency due to liquidity shortages. Lebanese banks have since blocked depositors from accessing those dollars, as the economy continues to collapse, pushing more than three-quarters of the population into poverty.
Unofficial capital controls
The Lebanese government has no formal capital controls in place, which would legally limit the transfer of foreign currency out of the country. However, the banks have implemented their own withdrawal limits, making life extremely difficult for millions of Lebanese plagued by rampant inflation and rampant unemployment.
Limits imposed by banks only allow customers to withdraw their US dollars after exchanging them for Lebanese pounds. However, the exchange rate is unfavorable and means that the retreatant loses a significant percentage of the real value of the dollars.
Raydan, a mother of two young teenagers, lost her husband to a heart attack in 2019. Her bank account contains funds her former employer provided to pay for her children’s school fees until graduation. of their degree.
“I asked why this was happening. She said it’s because I have a UK passport,” Raydan said.
Bank Audi’s demands came shortly after a court case in the UK, where Lebanese-British businessman Vatche Manoukian secured an order on February 28 for Bank Audi and another major Lebanese bank, Société Générale De Banque Au Liban (SGBL), to transfer $4 million of frozen savings to Manoukian. The court stipulated that the funds should be released without any restrictions imposed by the banks.
The two banks agreed to transfer the funds, according to Bryan Cave Leighton Paisner LLP, the law firm representing Manoukian.
Lebanese banks, including Bank Audi, now appear to be restricting withdrawals for people with British nationality to avoid cases like Manoukian’s in the future.
“We have been approached to act for other filers and will consider acting where appropriate,” a company spokesperson told Al Jazeera.
Another affiant who received a call from Bank Audi, an Iraqi-British national who wished to remain anonymous for fear of legal reprisals, believes the bank’s requests respond to the Manoukian case.
“I received the call the day before the case was published in the media,” they told Al Jazeera, adding that they refused to sign the form.
“Nobody in the whole world would accept these terms, in which they would lose all their rights. The money is clean and I presented my papers to the bank to show where it came from.
A British Embassy spokesman told Al Jazeera the situation is “symptomatic of Lebanon’s failing economy” and urged the government to implement structural reforms.
“We sympathize with depositors who have lost access to their accounts or funds,” the spokesperson said. “We recommend that issues are best addressed through relevant legal channels.”
The Lebanese government has failed to implement economic reforms that would lead to greater transparency and accountability, while power cuts and high inflation continue to cripple public life. Discussions on an International Monetary Fund-approved program are reportedly far from over, despite intermittent meetings since May 2020.
Abou Zor and other lawyers from the Union of Depositors are now taking legal action in Lebanon against Bank Audi.
“We will sue on behalf of filers who are willing to go through this process [legal action] in order to reopen their bank accounts and refuse to claim the checks that the banks leave with the notary,” she explained.
While all the cases being prepared involve Bank Audi, Abou Zor says other major Lebanese banks have recently issued similar appeals to depositors and that the country’s justice system must act.
“Our own justice system must act, because what is happening is the theft of the century.”
