Banque du Liban Foreign Affairs Department. Establishment and Activities of a Foreign Bank's Representative Office in Lebanon

Transcription

1 Banque du Liban Foreign Affairs Department Establishment and Activities of a Foreign Bank's Representative Office in Lebanon

2 Pamphlet No 4 The information presented in this pamphlet provides the reader with basic information regarding the establishment and activities of a Foreign Bank's Representative Office in Lebanon. Banque du Liban has the right to modify the existing regulations as it deems proper or essential. For additional information, please contact the Foreign Affairs Department at Banque du Liban at the following address: Banque du Liban Foreign Affairs Department P.O.Box: Beirut - Lebanon Telephone: Fax: bdlext@bdl.gov.lb Pamphlet No 4 March 2012

3 INDEX 1- Activities of a Foreign Bank's Representative Office Prohibited Activities License Application and Required Documents Registration of the Foreign Bank's Representative Office Prerogatives of the Chief Representative The Geographical Scope of the Representative Office's Activities Settlement of the Representative Office's Operating Costs Documents to be Submitted to Banque du Liban Prerogatives of Banque du Liban to Issue Directives and Recommendations... 3 Annex: List of Laws, Decisions and Circulars Regarding Foreign Banks Representative Offices in Lebanon... 4

4 1- Activities of a Foreign Bank's Representative Office The activities of a Foreign Bank s Representative Office in Lebanon are limited to the establishment of public relations and liaison activities with third parties such as banks, financial institutions, companies, organizations, and public and private institutions, with a view to collect all kind of information that may be useful to the bank s Head Office. It may also conduct general research activities concerning Lebanon and potential investors. 2- Prohibited Activities The Representative Office is strictly prohibited from dealing with individuals and conducting banking or commercial activities specially: - Opening credit lines, granting credits, extending debt maturities, - Receiving any kind of deposits in the name or on behalf of the bank or any affiliate of the bank, - Discounting bills of exchange, transfers, withdrawals, or any other debt instrument, - Accepting and signing agreements and commitments on behalf of the bank or any affiliate of the bank, - Any other activity that may be, directly or indirectly, profitable in any way to the Representative Office. 3- License Application and Required Documents To obtain a license for the establishment of a Foreign Bank s Representative Office, an application must be submitted to Banque du Liban, signed by the Head Office of the Foreign Bank or its duly authorized representative. The following documents must be attached to the license application: a- Three copies, of which an original, duly certified by the competent authorities, the Lebanese Embassy in the home country of the bank s Head Office, and the Lebanese Ministry of Foreign Affairs, and translated into Arabic as needed, of the following documents: - The Foreign Bank s articles of incorporation, - A certificate proving its registration as a bank by the authorities of its home country, - The decision taken by the Head Office to establish a Representative Office in Lebanon specifying its scope of activities, - The prerogatives of the authorized Chief Representative and his/her curriculum vitae, 1

5 - The name and address of the responsible manager, at the Head Office, to whom the Chief Representative will submit the Representative Office's reports. b- Three copies of the annual report published by the bank s Head Office for the last three years. 4- Registration of the Foreign Bank's Representative Office After Banque du Liban grants the license, the Foreign Bank's Representative Office should be registered at the Ministry of Economy and Trade (Trade Division - Corporate Section) and obtain a "notification of registration" issued by the said Ministry. 5- Prerogatives of the Chief Representative Here below is a non exclusive list of the functions of the Chief Representative: - Handling all financial and administrative procedures for the establishment of the Representative Office in Lebanon, - Accomplishing the tasks for which the Representative Office was established, - Representing the Foreign Bank's Head Office, within the scope of his/her prerogatives, in dealing with the government, public administrations and institutions, public entities, such as Banque du Liban and tribunals, - Conducting correspondence from and to the Representative Office, - Delegating, when necessary, third parties to perform some of the Chief Representative duties within the limit of his/her prerogatives. 6- The Geographical Scope of the Representative Office's Activities The scope of activities of a Foreign Bank's Representative Office covers the whole Lebanese territory. However, such scope may include missions in other regional countries whenever mentioned in the decision of establishment or in the decision appointing the Chief Representative. 7- Settlement of the Representative Office's Operating Costs The operating costs of the Representative Office must be covered by the Foreign Bank s Head Office, in particular the remuneration of the Chief Representative as well as other staff members and contractual employees. 2

6 8- Documents to be Submitted to Banque du Liban The Representative Office is required to provide the Legal Department at Banque du Liban with the following documents: a- After obtaining the license mentioned in paragraph 3 above: - The "notification of registration" of the Representative Office, issued by the Ministry of Economy and Trade (Trade Division - Corporate Section), - The full address of the Representative Office, - Any amendment in the bank s articles of incorporation, in the terms of reference of the Representative Office, or in the identity or prerogatives of the Chief Representative, together with the "notification of registration" issued by the Ministry of Economy and Trade in this respect. b- On a periodical basis: - Two copies of the annual report published by the Head Office, including the Board of Directors report and the balance sheet, - Two copies of a half-yearly report on the Representative Office s activities in Lebanon, to be submitted before the end of August for the first half of the calendar year, and before the end of February of the following year for the second half. The Legal Department at Banque du Liban shall provide the Banking Control Commission with a copy of the documents indicated in paragraph (b) above. 9- Prerogatives of Banque du Liban to Issue Directives and Recommendations Banque du Liban is entitled to issue directives and recommendations and to define the obligations with which the Foreign Bank's Representative Office has to comply. Noncompliance by the Representative Office with the obligations specified by Banque du Liban may lead to the revocation of the granted license. 3

7 Annex: List of Laws, Decisions and Circulars Regarding Foreign Banks Representative Offices in Lebanon Laws / Decrees Date Subject Legislative Decree No /12/1942 Law No 28/67 9/5/1967 Code of Commerce - Book One Chapter 3 Amendment and completion of the legislation related to banks and the establishment of the mixed institution for the guarantee of banks' deposits Decisions Date Subject Decision No 96 issued by the French High Commissioner 30/1/1926 Foreign Companies Basic Circular Basic Circulars issued by Banque du Liban addressed to a Foreign Bank's Representative Office Basic Date Subject Decision Basic Circular No 1, addressed to Foreign Banks' Representative Offices /4/1999 Establishment of Representative Offices of Foreign Banks in Lebanon 4