Lebanon central bank starts new forensic audit

Lebanon's central bank said an outside firm has begun a new forensic audit of selected past transactions linked to its foreign assets, as the country continues to deal with the fallout from its economic collapse.

The bank said New York-based Alvarez & Marsal began the audit on August 17. It covers selected transactions from October 2019 to the end of 2023, including transactions tied to the central bank's foreign assets and subsidy programmes for essential goods and materials.

In May, the central bank said the audit was intended to verify that payments and transfers were properly authorised and approved, and that funds were used for their intended purposes without violation, misuse or misappropriation.

A forensic audit of the central bank has been a key demand from the international community and the International Monetary Fund as Lebanon seeks bailout funds after the economic crash that began in 2019.

Alvarez & Marsal launched an earlier audit in 2020 but later stopped work after the central bank failed to provide necessary data. The firm resumed that audit the following year, and its preliminary report in 2023 presented a critical picture of the institution under former governor Riad Salameh.

Salameh headed the central bank from 1993 to July 2023. He has faced accusations including embezzlement and tax evasion in probes in Lebanon and abroad, and has denied wrongdoing, saying he is being made a scapegoat for the economic collapse.

He was arrested in September 2024 and charged with offences including the alleged embezzlement of $44 million from the central bank. He was released a year later after posting bail of more than $14 million, then placed in custody again in July over accusations including embezzlement and illegal enrichment after a complaint by the new central bank authorities.