If “Capital Control” is a set of exceptional and temporary controls and restrictions set by the House of Representatives under a law to prevent the flight of capital in times of crises due to its importance in achieving monetary and financial stability, then the last project came very late, and fell, like the projects that preceded it, due to unrealism In the first place, and the International Monetary Fund’s objection to it in the second place. Therefore, two and a half years after the onset of the financial crisis or financial collapse, what is the “ideal” law in terms of content, timing and objectives?
The head of the human rights “Justicia” Foundation, Dr. Paul Morcos, revealed to “Lebanon Debate”, that “the ideal capital control in Lebanon today, and after a long period of time has passed since the beginning of the crisis, must include a single and basic condition, which is to prevent transfers abroad, with the exception of What is related to hospital issues, taxes, education and other justified matters.”
Strongly criticizing the recent law proposal, Dr. Morcos identified the required provisions for the “Capital Control Law”, to be approved by the Lebanese, as well as the IMF, as follows:
It should coincide with the restructuring of banks and the return of confidence in the banking sector.
It is applied for a specific and exceptional period that coincides with serious reforms, and not for a long period.
It should stimulate the economy, and not conflict with the free liberal system adopted by Lebanon.
To establish equality in dealing with depositors, and not by adopting discretion.
To work to save the rest of the money, not to hit the economy and destroy the rest of the banking and financial sector.
The depositor shall not be penalized.
Also, imposing a ceiling on withdrawals under the law, must take into account the special situation of each depositor, and be commensurate with large and small depositors.
Not placing restrictions on the ability of banks to open new accounts, because it contradicts the basic role of banks, and threatens the existence, guarantee and continuity of the Lebanese banking sector.
The freezing of funds should coincide with a recovery plan and a clear mechanism for returning deposits to depositors.
That it does not contradict the principle of a free economy enshrined in the preamble to the Lebanese constitution, through restrictions on withdrawals and transfers to and from outside Lebanon, as well as within Lebanon.
– That it does not contradict the legal provisions that govern the deposit contract, and does not impose the exchange of the deposit for a currency other than its currency.
It should include a reform plan to advance the banking sector and restore confidence in it.
Accordingly, Dr. Morcos refused to say that the recently fallen law proposal is in line with the IMF’s observations, and revealed that it does not include a clause on unifying the exchange rate as recommended by the IMF, nor any hierarchical plan to reach a unified exchange rate or even qualitative and purposeful reforms for the banking sector.
In this context, Morcos expressed his regret at the lack of cooperation between the fund’s officials, including Lebanese, with Lebanon, knowing that Lebanon is a participant in some of the fund’s institutions.
As for banking lawsuits, and what was rumored to lead to their freezing, Morcos clarified that he did not include any reference to lawsuits filed against banks abroad and in Lebanon, against which a final judgment has not yet been issued—which may mean the continuation of these lawsuits.