GovernanceOct 03, 2023
The Implementation of the 2020 Law on Illicit Enrichment: Challenges and Opportunities
- Christelle Barakat
As part of its advocacy efforts towards building a people-centered and sustainable recovery from the Beirut port explosion and its endeavors to promote inclusive and equitable social justice, as well as foster trust between individuals, entities, and the Lebanese government, the Lebanese Center for Policy Studies (LCPS) partnered with Transparency International (TI) and its local chapter, Transparency International Lebanon – No Corruption, to issue “The Reform Monitor.” The topics covered by the monitor are linked to the areas of reform, recovery, and reconstruction (3RF). The monitor falls within the Building Integrity and National Accountability in Lebanon (BINA’) project, which is funded by the European Union. At the end of December 2022, the overall framework was reviewed for evaluation and adaptation purposes based on the closeout of the first phase, with foreseen updates underway. The views expressed in the monitor do not necessarily reflect those of the donor.
WHAT’S THE ISSUE AT HAND?
In a previous issue of the Reform Monitor, the National Anti-Corruption Commission (NACC) was introduced and detailed, along with a mention of the various laws that it monitors. One of these amended laws, the Asset and Interest Declaration and Punishment of Illicit Enrichment Law, was passed in 2020 and serves as the topic of this Reform Monitor.
The first iteration of an illicit enrichment law was passed in Lebanon in the 1950s. It was revisited in 1999, but remained flawed and difficult to enforce. According to the United Nations Development Program, the law was “not in line with international standards” and marred by legal loopholes. In 2020, the law was carefully and comprehensively revised with a focus on asset and interest declaration, particularly for public officials. More emphasis was placed on having officials declare their assets, interests, debts, and incomes, with the failure to do so leading to heavy penalties.
The new Asset and Interest Declaration and Punishment of Illicit Enrichment Law, known as the 2020 Law on Illicit Enrichment or Law No. 189, was passed in October 2020, and embodies Lebanon’s commitment to curbing corruption, in accordance with its 2009 ratification of the United Nations Convention Against Corruption (UNCAC). The law’s passage came at a critical time, following the 2019 protest movement, which called for more transparency and accountability in government.
The latest version of the law offers clearer definitions of who is considered a public employee and who among them must declare assets and interests, in addition to defining the role of the National Anti-Corruption Commission (NACC) when it comes to the implementation of the law. It lays out the declaration process and its content in its second chapter. In its third chapter, it defines the crime of illicit enrichment. Its fourth and final chapter cancels preceding iterations of the law and other contradictory texts.
Challenges Tied to Law No. 189 and Its Implementation
While having a new law on Asset and Interest Declaration and Punishment of Illicit Enrichment is a step in the right direction, several challenges remain. The following list of challenges is not meant to be exhaustive, but rather aims to present key challenges related to the law and its implementation.
Activating the Role of the National Anti-Corruption Commission
The National Anti-Corruption Commission plays a vital role in the implementation of Law No. 189, as it is charged with the investigation of illicit enrichment and the referral of such cases to the competent courts. The NACC is also the entity tasked with receiving asset and interest declarations. As such, it is essential to ensure that the NACC has the adequate human, material, and financial resources to carry out these duties.
Challenges tied to activating the NACC were addressed in the previous issue of the Reform Monitor and continue to impact the Commission’s mandate. These include:
- administrative delays in getting approval for key NACC documents
- the bureaucratic nature of processes (which is causing these delays)
- the current state of public administrations
- delays in receiving monetary allocations
- the depreciation of the Lebanese pound (which has in turn devalued the NACC’s budget)
The Independence of the Judiciary
Following investigation, the NACC has the duty of referring cases involving illicit enrichment to the judiciary. In the past few years, however, there have been increased concerns regarding the independence of the judiciary, particularly from political interference. This is a persisting challenge standing in the way of efforts to curb corruption and prosecute cases tied to illicit enrichment.
Controversy Surrounding the Law’s Retroactivity
There are two differing opinions regarding whether the law is retroactive or not. One of the opinions considers the law to be non-retroactive. This means the new law would not apply to crimes that happened under older illicit enrichment laws. Instead, it would only take effect or apply to crimes from the date of its publication in the Official Gazette. In this case, the passage of time would apply to the crime and determine the ability or inability to prosecute it.
The opposing opinion represents the intention of the legislator. It considers illicit enrichment to be a crime that extends through time. According to this view, the law is considered retroactive, meaning that it applies to illicit enrichment crimes that happened before the law’s passage. In this case, the passage of time starts from the moment that the crime is discovered, even if the crime was committed years ago.
Lack of Proof to Present a Complaint
Any individual can present an illicit enrichment complaint without the need to accompany it with supporting evidence. This poses two distinct challenges. First, it opens the door for Law No. 189 to be potentially arbitrarily used, which would thwart its aim and reduce its effectiveness. There are concerns, for example, that complaints could be made against public officials either partly or entirely based on their political affiliation, without them being involved in illicit enrichment crimes. Secondly, not having to present any supporting evidence could overwhelm the courts with unsubstantiated illicit enrichment complaints. This comes as an additional challenge to the judiciary, as it has also been recently impacted by the economic crisis.
Confusion Surrounding the Application of Law No. 189 to Top Government Officials
Law No. 189 does not explicitly mention its authority over top government officials, like the president, the prime minister, and the ministerial council—it simply points to other existing laws that could be applied in this regard.
The president is liable for the provisions of Law No. 189, but must be tried before the High Court of Justice. According to the Lebanese Association for Taxpayers’ Rights (ALDIC), the prime minister and the cabinet can be tried by ordinary courts, because illicit enrichment crimes are regarded as personal acts that do not fall under ministerial functions. This distinction is important because ministers must be tried by the High Court for any and all crimes falling under their ministerial functions.
WHY IS THIS IMPORTANT?
Law No. 189 promotes increased transparency and accountability, particularly in the public sector and as it relates to public officials. Its importance is also linked to its relevance and applicability to recent developments.
Two months following its passage, illicit enrichment complaints started emerging. Law No. 189 was first applied in 2021 to a case surrounding the Ministry of the Displaced, where 17 public officials were accused of amassing assets that their income could not explain. Another case was directed at several former high-ranking military personnel for apparent illicit enrichment.
Moreover, the passage of Law No. 189 coincided with an active illicit enrichment case against Prime Minister Najib Mikati, however, the judge presiding over the case chose not to apply Law No. 189 in court. The case was eventually dropped on the basis of prescription. It is unclear why Law No. 189 was not implemented, with the old law being applied instead.
Law No. 189 also served as the basis for a filed lawsuit in 2021 by several lawyers against the now-former governor of Lebanon’s central bank, Riad Salameh, and two financiers. The lawyers specifically called for implementing precautionary measures detailed in Law No. 189, including lifting banking secrecy, freezing accounts, imposing travel bans, and immobilizing funds. Other recent illicit enrichment cases have surrounded vehicle registration centers and Road Traffic Department employees.
Overall, Law No. 189 has positive implications for curbing corruption and combatting illicit enrichment. While it is an improvement on previous illicit enrichment laws, it continues to face challenges that threaten its effectiveness in general, as well as its ability to hold perpetrators of illicit enrichment to account. Nevertheless, if applied properly, the law can contribute to more transparency and accountability, paving the way for Lebanon’s reform, recovery, and reconstruction.
Akoum, Rana. Comparative Study Between the Punishing Illicit Enrichment Law and the Financial and Interest Disclosure Law. Transparency International and Transparency International Lebanon – No Corruption.
Lebanese Association for Taxpayers’ Rights and Interests (ALDIC). (2020). Law No. 189 Dated 16/10/2020 Relating to the Declaration of Assets and Other Interests and The Repression of Illicit Enrichment. ALDIC.Christelle Barakat is a researcher at the Lebanese Center for Policy Studies. She is a recent Lebanese Fulbright Foreign Student program graduate from the University of North Carolina at Greensboro, holding an MA in Peace and Conflict Studies with a concentration on International Peace Development. She completed her BA in Political Science and International Affairs with high distinction from the Lebanese American University. Her areas of interest include conflict analysis and resolution, disarmament, globalization, migration and refugee studies, and women and gender studies.