In a Letter to Embassies and Diplomatic Missions in Lebanon, the Depositors Union (DU) called on countries “to take all necessary measures and steps to impose sanctions on the shareholders, ultimate owners and members of boards in commercial banks, as well as on officials at the Banque du Liban (BDL)”. The letter emphasised the mismanagement of BDL’s Central Council of bodies and the oversight of the Governor and Vice Governors.
It stated: “We hereby formally request that you act in good conscience to impose sanctions on persons and entities, whether domiciled in Lebanon, in your home country or abroad because they illegally and illegitimately seize and accumulate wealth at the expense of a whole nation”. The action aims to protect Small and Medium Depositors and restore their rights to freely access bank accounts. “In making this request we ask for nothing less than our rights under international law and justice for Lebanese and foreign depositors who have been robbed of their money, their livelihoods and their dignity” added the Letter.
The Depositors Union cited the UN Universal Declaration of Human Rights, the International Covenant on Economic, Social, and Cultural Rights, the International Covenant on Civil and Political Rights, the Constitution of Lebanon, Lebanon’s Code of Money and Credit, the Code of Commerce, and the Law of Obligations and Contracts, adding that the Association of Banks in Lebanon (ABL) “ unilaterally, arbitrarily, and consistently collude with the Banque du Liban, depriving depositors of legal rights, as well true value of their savings in foreign currency”.
The former has inflicted arbitrary and illegal exchange rates to withdraw foreign currency from personal accounts. Moreover, the BDL has issued several circulars that run contrary to the Constitution and the Code of Obligations and Contracts. While the restrictions apply to almost everyone, persons with close connections are permitted by commercial banks to withdraw foreign currency at their true value and/or transfer their funds outside the country!
The DU also referred to the Parliament’s refusal of passing a formal capital control law, which enabled influential entities to smuggle money out of Lebanon, amounting to $7 billion, adding “the BDL & commercial banks jointly with political elites, scuttled the government’s Financial Recovery Plan, while illegal measures eluded oversight and audit, preventing a fair, inclusive, transparent and accountable plan to resolve the crisis.” Informal haircut on depositors’ accounts, between October 2019 and March 2021, has diluted liabilities by $31.4 billion, of which an estimated $13.7 billion were in foreign currency deposits, paid out at illegal exchange rates!
The DU Letter highlighted the plight of Lebanese people, who are denied basic lawful rights and plunged into poverty: “The day-to-day life of ordinary Lebanese is one of utter humiliation, with an inability to access hard-earned savings, either to pay for groceries, rent, tuition, or basic needs”, it said.
Sadly, people have been forced to sell their assets to pay hospital bills, even the victims of the Beirut Blast borrowed money to fix their damaged homes and businesses because money is stuck illegally in banks.
While the overwhelming majority of the population suffers from the consequences of the ongoing crisis, bank executives, major shareholders, and BDL members continue to travel freely and enjoy lavish lifestyles inside and outside of Lebanon!
According to DU, the Lebanese judiciary has blatantly disregarded the Lebanese Constitution by declining to prosecute cases against commercial banks, brought forward by the DU, while the legislature failed to pass laws to institute formal capital controls or alter the official exchange rate to reflect the true market value.
The Depositors’ Union (DU), established in November 2019, is made up of a group of activists, journalists, economists, and lawyers defending the rights of depositors in Lebanese banks. The DU has consistently called for a just, transparent and comprehensive financial rescue plan coupled with a forensic audit of the BDL. Such a plan will fairly distribute losses and hold accountable persons and entities responsible for one of the largest economic collapses in recent history, while at the same time restructure the public debt and the banking sector.
Through engagement in multiple non-violent forms of protest and action against the conduct of Lebanon’s commercial banks, the BDL, and concerned public figures, DU has brought forward legal cases both in Lebanon and abroad against commercial banks and government officials, engaged in public protests, met with Members of Parliament who attempted to scuttle the FRP and capital control law, and will continue to run advocacy campaigns to lobby for inalienable rights.