British depositors sue to stop bank account closures in Lebanon

British depositors sue to stop bank account closures in Lebanon
A group of British depositors in Lebanon are trying to get their accounts re-opened after the banks closed them with no warning.
3 min read
24 March, 2022
Lebanese banks began closing the account of British passport holders seemingly in retaliation after a UK court ordered Bank Audi to pay $4 million to an account holder.

A group of British passport holders filed a joint lawsuit on Thursday to have their Lebanese bank accounts re-opened after Bank Audi and Blom Bank shut them down.

The suit, on behalf of 15 individuals by the Lebanese Depositor's Union, was filed after the two banks suddenly closed down a number of bank accounts of Brits. Both banks began closing the accounts of British passport holders after UK courts ruled that Bank Audi had to pay a British citizen $US 4 million for freezing his accounts.

Bank Audi has closed at least 60 bank accounts whose total value totalled $US 100 million, Dina Abou Zour, a lawyer with the Depositor's Union, told The New Arab.

The Association of Banks of Lebanon did not respond to a request for comment from The New Arab.

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The closure of these accounts is a "preventative and vengeful act from the banks," Abou Zour said, adding that banks want to quash the possibility of British account holders turning to UK courts to free their money from Lebanese banks.

One participant in the lawsuit told The New Arab that they were notified that the bank was closing their account "with immediate effect" via WhatsApp message.

"I asked why they were closing my account. They said that 'you know what happened in the UK, the bank wants to protect itself,'" the participant told The New Arab, under the condition of anonymity as other account holders who have spoken to media have faced retribution from their bank.

After the account holders were notified their accounts were being closed, they were issued a check with the value of their deposits. The check is supposed to be cashed by the Central Bank of Lebanon (BDL), but cannot actually be honoured by the BDL due to the financial crisis – making it effectively worthless.

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"We've done nothing wrong, why did you close our accounts? We've not sued you. You don't have a right to do that, you owe us money. We put our money in your bank to be safe. They have no conscience," the participant said.

The vast majority of Lebanese depositors have had their money frozen in the banks since the fall of 2019 when Lebanon's financial meltdown began. Banks froze depositors' accounts and instituted strict withdrawal limits that persist to this day. For most, this meant close to no access to their savings.

The banks' capital controls were established without consulting the Lebanese parliament. Despite the existence of these informal capital controls, many large account holders and elites were able to transfer their money out of Lebanon.

In order to free their money from the banking system, many Lebanese have turned to the judiciary, filing suits to force the banks to free up their money. In response, Lebanese banks have retaliated in the form of strikes, denial of service and account closures.