As Lebanon faces a new FATF assessment in October 2026, questions remain over whether its progress in financial oversight, anti-money laundering measures and institutional reforms will be enough to secure its removal from the grey list.
Lebanon’s road out of the Grey List
Lebanon was placed on the Financial Action Task Force (FATF) grey list in October 2024 and was given three years to implement legal and practical measures in line with FATF requirements to secure its removal. Today, two years later, the group is expected to issue a new assessment between October 26 and 30, 2026, evaluating the measures implemented so far. What has Lebanon achieved, and what steps remain?
Lebanon’s inclusion on the grey list in October 2024 was not unexpected. It resulted from accumulated deficiencies and gaps in the country’s anti-money laundering and counter-terrorist financing framework, aggravated by the financial, banking and economic crises, weak institutions and oversight, and the expansion of the cash-based and informal economy.
Lebanon has undoubtedly made efforts over the past two years, both in strengthening banking and regulatory measures and improving coordination among the relevant public institutions.
As Fouad Zmokhol, Dean of the Faculty of Business Administration at Saint Joseph University and President of the International Union of Lebanese Businessmen and Businesswomen, explained to Nidaa Al Watan, FATF itself has acknowledged “positive steps taken in the financial sector, including stronger anti-corruption measures and increased monitoring of unlicensed financial transactions.”
However, he stressed the need to distinguish between adopting measures and demonstrating their effectiveness in practice.
“The international community is no longer satisfied with the issuance of laws and circulars. It wants tangible, measurable results, particularly in investigations and prosecutions, the recovery of illicit funds, combating terrorist financing and regulating financial activities operating outside legal frameworks. Therefore, it is essential to examine the upcoming report in terms of actual progress in implementing the action plan, rather than approaching it with preconceived optimism or pessimism.”
In his view, “the main criterion is not the number of measures adopted, but Lebanon’s ability to demonstrate that they are being implemented effectively and consistently.”
What measures has Lebanon implemented, and which issues remain unresolved before it can meet the requirements for removal from the grey list?
Progress achieved
Lebanon has made progress in certain areas of combating money laundering and terrorist financing. However, according to Zmokhol, “a broad reform agenda remains, requiring coordinated efforts among monetary, banking, judicial, security and administrative authorities.”
At the banking level, compliance and oversight measures have been strengthened, with stricter verification of customer identities, sources of funds and beneficial owners, alongside improvements in mechanisms for detecting suspicious transactions.
At the institutional level, coordination among the relevant authorities has also increased.
One positive indicator was the meeting chaired by the prime minister in August 2026 to follow up on the implementation of the action plan agreed with FATF, attended by the relevant financial, judicial and security authorities.
Key challenges
However, these positive measures are not sufficient on their own. Lebanon continues to face several major challenges, which Zmokhol outlined as follows:
• Cash economy: Reducing excessive reliance on cash transactions and gradually bringing financial operations back into legitimate, regulated banking channels.
• Informal economy: Strengthening oversight of currency exchange institutions, money transfers, unlicensed financial activities and high-risk non-financial sectors.
• Judiciary and accountability: Achieving tangible results in investigations, prosecutions and judicial rulings related to money laundering and terrorist financing, rather than relying solely on administrative measures.
• Financial transparency: Ensuring the availability of accurate and up-to-date information on the beneficial owners of companies and institutions.
• International cooperation: Strengthening information exchange, judicial assistance and the recovery of funds and assets derived from criminal activities.
• Targeted financial sanctions: Ensuring their implementation without delay, while adopting risk-based supervision covering certain non-banking institutions and higher-risk associations, without disrupting legitimate activities.
These areas correspond to the main deficiencies that FATF continues to require Lebanon to address.
When could Lebanon leave the grey list?
As for whether Lebanon could be removed from the grey list this year or next, it is important to clarify that removal does not happen automatically, nor does it result simply from declarations of good intentions or the adoption of legislative reforms.
There is a clearly defined assessment process based on completing the action plan, demonstrating the effectiveness of the measures implemented and subsequently conducting an on-site verification to ensure that reforms are sustainable before a final decision is made.
Zmokhol confirmed this, explaining:
“In terms of timing, FATF is scheduled to hold its next meetings between October 26 and 30, 2026, followed by further meetings in February and June 2027. Each meeting could therefore include a new assessment of the progress achieved, but it is impossible to determine in advance when Lebanon will be removed from the grey list.”
As for the possibility of Lebanon being moved to the black list, this is a different and considerably more serious scenario, associated with major strategic deficiencies and the resulting stricter international measures.
A move from the grey list to the black list should not be considered an automatic consequence of delays in fulfilling certain commitments.
According to Zmokhol, “the priority should not be limited to seeking a rapid exit from the list, but should focus on addressing the underlying reasons Lebanon was placed on it in the first place. A merely formal removal, without sustainable reforms, will not restore lost confidence.”
He added that removing Lebanon from the grey list would certainly represent an important positive development, not only for the financial and banking sectors, but also for the country’s economic, trade and investment relations with the rest of the world.
Removal could therefore have positive effects in several areas.
First, international banking relations: Improving Lebanon’s reputation among correspondent banks, reducing certain compliance and due diligence burdens, and gradually facilitating cross-border transfers and financial transactions.
Second, foreign investment: Reducing reputational risks associated with Lebanon’s financial environment and strengthening the confidence of investors and international institutions in the country’s ability to implement internationally recognized standards.
Third, foreign trade: Facilitating financial transactions linked to imports and exports and reducing some of the complications and additional costs Lebanese companies face in their international dealings.
Fourth, international confidence and reputation: Removal from the list would send a positive signal that Lebanon is beginning to recover its institutional capacity to manage financial risks and comply with international standards.
However, expectations must remain realistic. Despite its importance, removal from the grey list would not automatically restore normal banking relations, resolve the financial and banking crisis, return deposits or attract investments.
The real challenge lies in turning this achievement, once secured, into an opportunity to reconnect Lebanon with the global financial system, attract investment and revive the productive economy.
