VZCZCXRO1433
RR RUEHBC RUEHDE RUEHDH RUEHKUK RUEHROV
DE RUEHLB #1237/01 3221310
ZNR UUUUU ZZH
R 181310Z NOV 09
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 6077
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RHEHAAA/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 02 BEIRUT 001237 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON EFIN ACOA PTER PGOV LE
SUBJECT: LEBANON HOSTS MAJOR ITU CONFERENCE (ECONOMIC WEEK IN 
REVIEW, NOVEMBER 9-15, 2009) 
 
CONTENTS 
-------- 
 
-- LEBANON HOSTS MAJOR ITU CONFERENCE 
-- MENAFATF 10TH PLENARY UPGRADED LEBANON'S AML/CTF SYSTEM 
-- MOST REMITTANCES USED FOR CONSUMPTION 
-- WORLD BANK ESTIMATES REMITTANCES AT $7 BILLION IN 2009 
-- ECONOMY MINISTRY WARNS AGAINST COUNTERFEIT SALES 
 
LEBANON HOSTS MAJOR 
ITU CONFERENCE 
------------------- 
 
¶1. (U) Less than three years after its establishment, Lebanon's 
Telecommunications Regulatory Authority (TRA) hosted the 
International Telecommunications Union's Global Symposium for 
Regulators in Beirut November 9-11.  U.S. Federal Communications 
Commission Chairman Julius Genachowski and U.S. Coordinator for 
International Communications and Information Policy Ambassador 
Philip Verveer led the U.S. delegation at the event, and regulators 
and industry leaders from over 150 countries also attended. 
 
¶2. (SBU) The event coincided with the formation of a new Lebanese 
government and the turnover of the Ministry of Telecommunications 
from the Free Patriotic Movement's (FPM) Gebran Bassil to Charbel 
Nahhas, an ally of the party.  Lebanese attendees at the symposium 
expressed optimism that Nahhas, a widely respected economist, would 
be a good partner in moving forward telecom reform.  FPM leader 
Michel Aoun himself said publicly that Nahass was chosen "because he 
supports privatization" and would "enrich the discussion" on the 
topic. 
 
MENAFATF SLIGHTLY 
UPGRADES LEBANON 
----------------- 
 
¶3. (U) The 10th Middle East North Africa Financial Action Task Force 
(MENAFATF) Plenary was held November 9-11 in Beirut to discuss 
MENAFATF's 2010 Work Plan, its Strategic Plan for 2010-2012, and 
Lebanon's Mutual Evaluation Report (MER) of its Anti-Money 
Laundering/Counter-terrorism Finance (AML/CFT) system.  A large 
number of AML/CFT experts from member countries, observer countries, 
and international institutions, including the World Bank, the IMF, 
FATF, Egmont Group, and the World Customs Organization, participated 
in the Plenary. 
 
¶4. (SBU) Senior Director of Lebanon's Financial Intelligence Unit 
(FIU) Ibrahim Homsy told us November 13 that following the MER, 
Lebanon was upgraded from "Partially Compliant" to "Largely 
Compliant" on several core recommendations, including timely 
feedback by the FIU.  As a result of this improvement, Lebanon would 
only be subject to a normal review, scheduled for September 2011, he 
said.  Lebanon's MER was prepared by a team of MENAFATF experts 
following an on-site visit to Lebanon in February 2009. 
 
¶5. (SBU) Lebanon's Central Bank Vice Governor (and former FIU 
Secretary) Mohammad Baasiri had lobbied Arab counterparts to support 
upgrading Lebanon's AML/CFT regime.  In requesting USG lobbying 
support, Baasiri had told EmbOffs that Lebanon's FIU has been the 
most active member of MENAFATF.  He had argued that Hizballah saw 
the FIU as an "extension of the U.S. Treasury" and would consider 
the lack of an upgrade as a victory. 
 
MOST REMITTANCES 
USED FOR CONSUMPTION 
-------------------- 
 
¶6. (SBU) Around 90% of expatriate remittances to Lebanon are used 
for consumption purposes and only 10% are invested in development 
projects, according to the Investment Development Authority of 
Lebanon (IDAL).  IDAL is urging expatriates to invest their money in 
projects that offer higher returns and stimulate economic growth. 
To facilitate this project, IDAL compiled a database of potential 
Lebanese migrant investors and launched a media campaign in 
countries with a large Lebanese presence, IDAL Advisor Laurent Aoun 
told us. 
 
2009 REMITTANCES AT $7 BILLION 
------------------------------ 
 
¶7. (SBU) The World Bank has revised its estimate of remittance 
inflows to $7.18 billion (from $6 billion) in 2008, or around 24% 
percent of GDP in 2008, making Lebanon one of the largest recipients 
of remittances as a share of GDP worldwide. 
Meanwhile, for 2009 the World Bank forecast remittances to Lebanon 
at $7 billion, or 22% of total remittances to the MENA region, 
representing a minimal decline compared to 2008's record high. 
 
BEIRUT 00001237  002 OF 002 
 
 
 
¶8. (SBU) Separately, Audi Bank research department head Dr. Marwan 
Barakat told us that he expects the World Bank to increase its 
forecast for remittances into Lebanon for 2009 as the country 
continues to witness substantial capital inflows.  The World Bank 
and the IMF earlier projected that remittances into Lebanon would 
drop by 12% in 2009 as a result of the economic slowdown in the Gulf 
countries, but for the first nine months of 2009 the balance of 
payments recorded a $4.8 billion surplus. 
 
ECONOMY MINISTRY WARNS 
AGAINST COUNTERFEIT SALES 
------------------------- 
 
¶9. (U) The Ministry of Economy and Trade (MOET) issued a communique 
warning commercial establishments throughout Lebanon against selling 
counterfeit products and violating intellectual property and 
consumer protection laws.  The communique noted that starting 
January 1 the MOET will increase its inspections throughout the 
country with the goal of confiscating counterfeits and taking legal 
measures against infringers.  Although the IPR environment in 
Lebanon has improved in the past years, enforcement -- by the 
police, customs, and the judiciary -- remains the biggest obstacle. 
 
 
DAUGHTON