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Mike CAMUS
Head of International Desk Middle East, Turkey

Support by the
Crédit Agricole group

Last updated: august 2021

The Middle East International Desk assists the Crédit Agricole Group’s corporate customers in Lebanon, as well as individual customers by providing information and banking advice.
For our clients’ transactions, we rely primarily on Banque Libano Française, which offers the full range of services required.

 

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Means of payment

With Lebanon

Company cheque

Bank cheque

SWIFT transfer

Withdrawal

Bill of exchange

Promissory note

Documentary remittance

Documentary credit

Usage

Weak / None

Weak / None

Common

Weak / None

Common

Common

Not recommended

Common

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Advice from the
international desk

General Information

Lebanon is experiencing a significant crisis. This crisis is economic, political, social and health-related all at the same time. The Covid-19 pandemic has accelerated the disintegration of a country in turmoil, burdened the highest level of debt in the world (185% of GDP). The Lebanese government forecasts a 13% contraction of the economy in 2020.  The government is currently negotiating a loan under certain conditions with the IMF. Additionally, the dollar reserves of the Bank of Lebanon, which since 1997 have allowed for preservation of the fixed parity of the Lebanese pound against the dollar, now only stand at around 18 billion dollars, 17 billion of  which are obligatory bank reserves.

Since the terrible explosion at the port of Beirut, the population has been faced with disarray and public demonstrations taken up to denounce the destruction of the crisis and the inaction of the ruling classes. The country fears a new interfaith conflict at the time of now urgent economic, political and financial “restructuring”.

Lebanon is characterised by its openness to foreign trade and investment (total freedom of local and foreign capital). It is important to note that foreign participation in the capital of a local company must exceed 67,000 USD and that a Holding cannot hold more than 40% of the shares of two companies operating in the same sector. Furthermore, it is advisable to rely on a local firm when setting up a company (advice, administrative procedures, etc.).


Means of Payment & Banking Specificities

The Lebanese pound is freely convertible. The euro is the currency most often used in preference to the US dollar during commercial transactions.

Confirmed documentary credit and stand-by letter of credit, preferably confirmed, are the recommended means of payment. SWIFT transfers can be considered as secured by a confirmed stand-by letter of credit or with contracts covered by export insurance.

The standard payment term is a maximum of 30 days. As for delays, they are very frequent and very significant in cases of non-secured payment.

Accepting settlement in foreign currencies by cheque is now strongly discouraged with the risk of this being rejected in light of the country’s current financial situation.

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