Lebanon remains
on FATF's 'Grey List'

Progress reported but not enough

The Financial Action Task Force (FATF) has decided to keep Lebanon on its grey list of countries under enhanced monitoring for anti-money laundering and counter-terrorism financing shortcomings. The decision was announced in a report issued on October 30, 2026.

Positive steps
Lebanon first entered the grey list on October 25, 2024, during a period defined by severe economic instability and regional conflict. The global watchdog acknowledged positive steps taken by Lebanese authorities such as issuing targeted financial sanction directives and providing training for financial institutions, it noted that ten fundamental strategic deficiencies still need to be addressed.

More to achieve
The required reforms span multiple areas of the financial and judicial sectors. Key demands include increasing investigations and prosecutions for money laundering offenses, enhancing asset recovery mechanisms, and improving the tracking of illicit cross-border movements of cash and precious metals. Furthermore, authorities must ensure that beneficial ownership information for legal entities remains up to date and strengthen the oversight of non-profit organizations and designated non-financial businesses.

Implications
Although grey list status does not trigger automatic international financial sanctions, it often prompts foreign banks to exercise heightened caution. Increased compliance costs and stricter scrutiny of cross-border transactions could further complicate Lebanon's integration into the global financial system. This poses additional challenges for a banking sector already recovering from a prolonged domestic crisis and heavily reliant on diaspora remittances.

Countries exiting the list
The decision contrasts with the recent removal of other nations from the monitoring list. Countries like Ivory Coast, which joined the list at the same time as Lebanon in October 2024, successfully exited the grey list after two years. This disparity has drawn attention to the broader implications for Lebanon's fragile economy.

Specific conditions
FATF has identified that Lebanon should continue working on implementing its action plan to address its strategic deficiencies by:
(1) Conducting assessments of specific terrorist financing and money laundering risks identified in the Mutual Evaluation Report (MER) and ensuring that policies and measures are in place to mitigate these risks
(2) Enhancing mechanisms to ensure the timely and effective execution of requests for mutual legal assistance, extradition and asset recovery
(3) Enhancing designated non-financial businesses and professions (DNFBP) risk understanding and applying effective, proportionate and dissuasive sanctions for breaches of AML/CFT obligations
(4) Ensuring beneficial ownership information is up-to-date and that there are adequate sanctions and risk-mitigating in place for legal persons
(5) Enhancing competent authorities’ use of products of the Financial Intelligence Unit (FIU) and financial intelligence
(6) Demonstrating a sustained increase in investigations, prosecutions and court rulings for types of money laundering (ML) in line with the risk
(7) Improving its approach to asset recovery and identifying and seizing illicit cross-border movements of currency and precious metals and stones
(8) Pursuing terrorist financing (TF) investigations and sharing information with foreign partners related to investigations of TF as called for in the MER
(9) Enhancing the implementation of targeted financial sanctions without delay, particularly at DNFBPs and certain non-banking financial institutions; institutions
(10) Undertaking targeted and risk-based monitoring of high-risk non-profit organizations (NPO), without disrupting or discouraging legitimate non-profit organization NPO activities.