The Money Changers Syndicate’s plan to return the sector from a “charge” to a “profession”!

Imad Al-Chidiac wrote on the “Asas Media” website: “Exchanging dollars at the money changer will not be a random act in the future, as the money changers’ union promises all Lebanese to regulate this sector after the crisis that caused the union to lose its role and turned every legitimate money changer into a “charge project.” As for the promised organization, it will include the largest number of money changers under the banner of the union and oblige them, through encouragement and perhaps sometimes intimidation, to take customers’ data and declare the source of the foreign currencies disbursed to them, especially when the amount is greater than 10 thousand dollars… Will you succeed in this? What are the new additional measures?

Al-Shidyaq continued,

The effects of the visit of the US Treasury delegation to Lebanon last month have not yet ended. Its tails are still interacting by injecting the “spirit of work” that has been missing for 4 years to this day among the parties in the financial and banking sectors… The goal of all of this is to make more efforts to combat the “cash economy” that the American Treasury is wary of and which any financial system in any country rejects. A self-respecting country that aspires to “the straight financial and monetary path.”

The last of these movements were the measures that the Money Changers Syndicate began to take in order to control, legalize and reorganize this sector, and Asas learned about them. This is after this sector was destroyed during the four years of the crisis. The Money Changers Syndicate recently opened a workshop, and its main motivation was two things:

1. The Syndicate of Money Changers, in coordination and at the request of the Bank of Lebanon, sought to spare Lebanon from being included on the “gray list” of the Financial Action Task Force (FATF), which requires countries to adhere to 40 standards to combat money laundering and terrorist financing. Lebanon has shown its weakness in a number of them. One of them is the “cash economy” point among money changers, which is a loophole that must be closed in order to avoid including Lebanon on that list.
2. Reinstilling confidence in the money changer sector, after the profession turned during the past four years of the economic crisis into a “charge” and not a “profession.”

In an interview with “Asas,” Dr. Majd Al-Masry, head of the Money Exchange Syndicate, denied that the action plan was motivated by the visit that the US Treasury delegation made to Lebanon weeks ago. He says that the plan “was in place about 7 months ago,” that is, since he assumed the duties of captain.

He added, “Our plan aims to “urge unaffiliated cashiers to join the union, join its ranks, and adhere to its instructions.” This is because the Money Changers Syndicate was “absent from the picture over the past four years, so its role was eliminated.” During those years, she turned into “a broken stick that no one spoke for or defended.” Rather, the Money Changers Syndicate has become a “terrorist” for the security services, as a result of accusations being attached to the money changers, especially the legitimate ones, “mixing us with speculators and brokers.” This led to us being accused of withdrawing dollars from the market or manipulating the exchange rate.” Recalling at the same time that the cashier is “merely an intermediary,” he cannot transcend the role assigned to him by the Bank of Lebanon as the primary controller and monopolist of the market and its prices, whether up or down. Therefore, it is the Bank of Lebanon that “bears responsibility for everything that happens in the market, not the money changers.”

According to Al-Masry, the goal behind these measures is “to rebuild trust again between money changers and the Bank of Lebanon.” This is done by adhering to its circulars first, and adhering to compliance requirements second.

The new procedures, which the Money Changers Syndicate intends to oblige members to, are:

1. Membership: The Money Changers Syndicate seeks to include all legitimate money exchangers in its ranks. There are quite a few legitimate money changers who are not affiliated with the union. The Captain confirms that this joining is optional and not yet mandatory. This is despite the fact that the union submitted a draft law to the government in recent years obligating legitimate money changers to belong to the union. However, the Council of Ministers (Mikati’s previous government) rejected it at the time for unknown reasons.
2. Application: The Money Changers Syndicate has created an electronic application that enables the money changers affiliated with it to “know the names of the people and entities listed on the blacklist.” Thus, the teller can “know those names and avoid dealing with them.” Rather, inform the Special Investigation Authority at the Bank of Lebanon of the type of operation that is requested to be conducted, in order to control money laundering or terrorist financing operations.
3. Compliance: The Money Changers Syndicate requires every affiliated member to be certified as an auditor and compliance officer in order to carry out accounting work. As well as checking the exchange company’s compliance with compliance standards. For this reason, the Money Changers Syndicate created a solution for its members, by allowing the money changers of one region to adopt “one officer” for every 10 money changers, in order to reduce the costs imposed on them, given that the wages of “compliance officers” are relatively high.
4. Unifying accounting standards: The Money Changers Syndicate seeks to unify accounting standards among money changers at the Ministry of Finance and official agencies. There is a discrepancy between them that prevailed during the last period, through the inclusion of some money changers in some regions within the “commercial system” of commercial companies, and not within the “financial system” of banks and financial institutions. Accordingly, the union is trying to impose modern accounting programs in order to unify standards among its members, and then also unify them in the cashiers’ relationship with the Ministry of Finance.
5. Exchange ceiling: This point is among the most important points that the Money Changers Syndicate seeks to impose on members in the future. It requires the cashier to “take the details of the customer heading to the teller windows in order to exchange hard currencies (a copy of the ID card and some other details).” However, if the amount that the customer (individuals or companies) intends to spend exceeds 10 thousand dollars. In this case, the legitimate money exchanger “will be obligated to take the customer’s complete information and obtain from him the source of that money as well as the reason for spending it.” It is a procedure that is very similar to the procedures applied in banking called (KYC) or its abbreviation in English, Know your client.

The head of the Money Changers Syndicate reiterated to Asas that enforcing membership in the union is not obligatory until now in light of the absence of the law. He also acknowledges that the union will not be able to impose any punitive measures on money changers who do not adhere to membership or even to the procedures mentioned above. But at the same time, he confirms that the “password” lies in the application: because the failure of any money changer to participate in this application will prompt the Money Changers Syndicate to inform the Special Investigation Authority at the Bank of Lebanon about the names of money changers who do not participate in it. That is, (By default) the union will inform the investigation body of the names of cashiers who are not affiliated with the union.

Al-Masry confirms that the Special Investigation Commission “will urge them to download the application and subscribe to it.” Because its annual cost outside the union is between $2,000 and $3,000 annually, while through the union it does not exceed $200 for category “A” and $100 for category “B,” they will have to subscribe to it through us. That is, it will indirectly encourage them to join us in order to download this application.”

As for the other additional measures undertaken by the Money Changers Syndicate, the captain explains that the Syndicate is very interested in and stresses “awareness” and “training.” It is keen to follow up on the details with its affiliated members. This is done by establishing a committee in each governorate whose job is to follow up on all money changers in the same governorate, coordinate with them, and encourage them to join. Leading to providing the service of obtaining passage facilities from the security services, or accelerating the procedures for obtaining licenses to carry weapons from the Ministry of Defense in light of the current security conditions.

In this regard, the Egyptian captain confirms to “ASAS” that Defense Minister Maurice Slim has expressed his willingness to assist the union. He expressed his pleasure with its work and the new organization that the union seeks to impose. Promising to expedite all transactions submitted by money changers through the union, and to give them the required attention and no one else.

In addition, the captain explains to Asas that the union makes periodic visits to some economic bodies and sectors in the country in order to obtain more support in order to make its plan a success, as it recently met with the economic bodies and the General Labor Union. Likewise with the Federation of Chambers of Commerce and Industry, I tried as much as possible to return the money-changing profession to the “economic map” and clean up its reputation.