Lebanese clients parked more money in Switzerland than ever last year. This comes against the backdrop of French as well as Swiss investigations into potential irregularities at Lebanon's central bank.
Balz Bruppacher, guest author
The country's crisis has sparked a capital flight to Switzerland, data published recently by the Swiss National Bank indicates. Funds held in Switzerland on behalf of Lebanese clients in 2020 surged on the year by nearly two-thirds – or 2.5 billion Swiss francs ($2.7 billion) – to 6.46 billion francs. This represents the highest sum since the SNB began releasing the data, in 1996.
The data about Lebanon, which has been without a government for nearly one year now, is intriguing because the country's lenders have severely restricted foreign exchange transactions amid the economic woes. The other, less tangible reason are persistent rumors that members of the political elite and policymakers have also moved considerable sums offshore.
Policy Veteran In Focus
Riad Salameh, the 70-year-old who has overseen Lebanon's central bank since 1993, has come into focus in European probes. Switzerland's attorney general is investigating both him and his brother Raja over suspected money laundering in connection with fraud at the central bank, according to Swiss daily «Le Temps» (behind paywall, in French), citing a Swiss request for legal assistance from Lebanon that it had seen.
The investigation reportedly centers around $300 million in a network of offshore Swiss banks. The Swiss attorney general has thus far declined to comment on Salameh or his brother, and repeated its 2020 statement which makes no mention of names, number of suspects, or the sum allegedly involved when asked by finews.com. The attorney general also didn't comment on whether it had frozen any Swiss accounts as a result of the probe.
Politically Tiptoeing
Salameh has denied any wrong-doing and said he believes he is the victim of a witch-hunt. The central banker has argued that his wealth stems from his previous employment, as a Merrill Lynch Banker.
The probe came up when Switzerland's foreign minister Ignazio Cassis visited Lebanon in April, with the Swiss politician pledged continuing support to the crisis-stricken nation, in the form of mutual cooperation of legal investigations. A spokeswoman for the foreign ministry said no information was exchanged at the April meeting, as Swiss justice officials were not present.
The issue is dicey for Switzerland, which has a patchy history with dictator loot. The Swiss government earlier this year said the Lebanon case doesn't yet fulfill the requirements for freezing money, in response to a parliamentary question (in German).
