Lebanon’s central bank has launched preparations for a comprehensive international forensic audit targeting public spending tied to the country’s controversial subsidy programs and financial transfers made after the onset of its financial collapse, amid growing suspicions of waste, political interference, and misappropriation of funds.

Central Bank Governor Karim Souaid announced that, following full coordination with Finance Minister Yassine Jaber and Justice Minister Adel Nassar, the bank will begin drafting the terms of reference for an external financial and forensic audit covering all beneficiaries of the government’s commodity subsidy program since October 17, 2019. The project, conducted in partnership with both ministries, aims to launch a tender in line with Law 244/2021.

Souaid said the cooperation between the central bank and the government forms “a cornerstone of Lebanon’s efforts to restore public trust in its banking system,” underscoring the institution’s commitment to transparency, disclosure, and close coordination on key financial issues from investigating suspicious transactions to facilitating the recovery and repayment of deposits.

According to a circular obtained by Asharq Al-Awsat, the audit will assign a specialized external firm to conduct both financial and forensic reviews covering government subsidy programs and money transfers made abroad by local banks. It will also examine payments made on behalf of the State between 2019 and 2023, identifying and recovering any unlawful transactions, misuse of public funds, or abuse of authority.

Speaking to Asharq Al-Awsat, a senior financial official described the initiative as a decisive step toward uncovering the channels of exploitation, waste, and illegal profits tied to the subsidy system established under former President Michel Aoun and Prime Minister Hassan Diab. The wide-reaching program, he noted, consumed no less than $11 billion in foreign currency reserves from the central bank to subsidize hundreds of consumer goods, fuel, and pharmaceuticals.

According to the official, the audit is expected to expose corruption in the way subsidized items were selected, including luxury or non-essential goods such as premium cheeses, meats, nuts, and medical supplies. Video evidence and images have already surfaced showing subsidized Lebanese products sold in Arab, African, and European markets, along with footage of fuel tankers crossing into Syria.

Preliminary estimates suggest that as much as half of the total funds disbursed were wasted through political favoritism, clientelist networks, and commercial profiteering. The official added that the misuse of public resources was exacerbated by pressure campaigns on the central bank to fund imports under populist pretexts, while ordinary Lebanese citizens faced daily hardship.

The upcoming audit is also expected to examine financial transfers made by some banks to senior executives and select clients, with total amounts estimated to exceed $3 billion. Governor Souaid recently revealed one such case involving a $280 million transfer executed by a Lebanese bank to a non-Lebanese, non-resident client.

Although these transfers were not strictly illegal, as Lebanon had no law restricting foreign transfers at the time, financial experts note that they represent serious ethical and procedural violations, given the deliberate favoritism among clients. Most commercial banks, they pointed out, have long refused to release funds beyond what the central bank’s circulars allow (currently capped between $500 and $800 per month). Withdrawals remain limited at an exchange rate of 15,000 Lebanese pounds per dollar, compared to the current market rate of 89,500 pounds.

Procedurally, the central bank’s dedicated team will coordinate closely with the Finance and Justice Ministries to ensure the audit’s terms of reference comprehensively cover all relevant financial, legal, and operational aspects.

Participation in the tender will be open to all qualified international auditing firms through the Public Procurement Authority’s online platform, provided they demonstrate the necessary experience and capacity to conduct forensic audits for governments, central banks, and public institutions.