Reliable sources have confirmed that Lebanon’s inclusion on the “grey list” of the Financial Action Task Force (FATF) is imminent, with an official decision expected next week, Annahar reported on Friday. 

The grey list, which signals deficiencies in a country’s efforts to combat money laundering and terrorism financing, will mark a significant blow to Lebanon’s already fragile financial and economic stability. Denying or attempting to delay the consequences of this development is no longer viable.

According to the report, concerns are mounting over the potential influence of the Israeli lobby, particularly in Washington, which is pushing for Lebanon’s classification to be upgraded from grey to black. A shift to the blacklist would effectively isolate Lebanon financially, economically, and internationally. Such a move could lead to its exclusion from global financial systems and relationships, with devastating consequences for an already struggling nation.

The specter of the blacklist hangs over Lebanon, as the positions of FATF member states—some of which are close European allies of Lebanon—remain unclear.

Lebanon’s Acting Central Bank Governor is currently in Washington, seeking to mitigate the impact of the grey listing. His efforts focus on preventing the escalation of sanctions that could plunge the country into financial chaos, and he is working to counter the Israeli lobby’s efforts to drive Lebanon onto the blacklist. If that were to happen, Lebanon could be cut off from the global financial market, lose all correspondent banking relationships, face the suspension of international money transfers, and find itself unable to open letters of credit for imports. In addition, asset freezes may be implemented.

Lebanon has made several attempts to avoid inclusion on the grey list, or at least to postpone its implications, which threaten to further damage the country’s financial system and economy. The Central Bank of Lebanon has taken substantial steps to address these concerns, previously securing two postponements that granted Lebanon more time to reform its financial and banking systems. These efforts allowed the country to avoid immediate sanctions while attempting to salvage what remains of its fragile economy.

However, the Lebanese government has failed to take any meaningful steps toward financial reform. The State has shown complete incompetence in restructuring its collapsing banking system, reforming its tax and financial structures, and strengthening its regulatory and legislative bodies to meet international anti-money laundering and counter-terrorism financing standards. The FATF’s 40 member states have set these benchmarks, but Lebanon has failed to meet them.

The risks associated with Lebanon’s inclusion on the grey list are significant. Professor Pierre Khoury, an academic and economic expert, warned via Annahar that “banks and financial institutions worldwide will become more cautious in dealing with Lebanese individuals and companies.” This will likely result in global banks imposing additional measures on financial transactions with Lebanon, making it increasingly difficult for the country to access international financial markets.

Amid the ongoing war with Israel and growing international pressure, Khoury noted that Lebanon’s weakened position could have broader consequences.

“The Lebanese government may find itself in a weaker position when negotiating with international bodies for financial aid or support, particularly in the aftermath of the war. Lebanon will require significant international assistance to rebuild what has been destroyed, but being on the grey list will complicate efforts to secure the necessary funding from international institutions or donor countries.”

Khoury also highlighted the potential damage to Lebanon’s political legitimacy.

“Inclusion on the grey list could further damage the reputation of Lebanon’s political elite, who have been criticized for failing to implement essential reforms. In light of the current situation, this could weaken Lebanon’s already precarious standing in international forums at a time when it is needed most.”