UK depositors file lawsuit to stop account closures in Lebanon
A group of British depositors in Lebanon are trying to get their accounts reopened after banks closed them without warning.
Lebanese banks have begun closing the accounts of British passport holders, apparently in retaliation after a British court ordered Bank Audi to pay an account holder $4 million.
A group of British passport holders filed a joint complaint on Thursday to have their Lebanese bank accounts reopened after Bank Audi and Blom Bank closed them.
The lawsuit, on behalf of 15 people by the Lebanese Union of Depositors, was filed after the two banks suddenly closed a number of British people’s bank accounts. The two banks began closing the accounts of British passport holders after British courts ruled that Bank Audi had to pay a British citizen $4 million for freezing his accounts.
Bank Audi has closed at least 60 bank accounts with a total value of $100 million, said Dina Abou Zour, a lawyer at the Union of Depositors. The new Arabic.
The Association of Banks of Lebanon did not respond to a request for comment from The new Arabic.
Closing these accounts is a “preventive and vengeful act by the banks”, said Abou Zour, adding that the banks want to nullify the possibility of UK account holders turning to UK courts to release their money from Lebanese banks.
A trial participant said The new Arabic that they were informed that the bank was closing their account “with immediate effect” via a WhatsApp message.
“I asked why they were closing my account. They said ‘you know what happened in the UK, the bank wants to protect itself,'” the participant said. The New Arab, on condition of anonymity, as other account holders who spoke to the media faced retaliation from their bank.
Once account holders were notified that their accounts were closed, they received a check for the value of their deposits. The check is supposed to be cashed by the Central Bank of Lebanon (BDL), but cannot actually be honored by the BDL due to the financial crisis, effectively rendering it worthless.
“We didn’t do anything wrong, why did you close our accounts? We didn’t sue you. You have no right to do this, you owe us money. We put our money in your bank to be safe don’t have a conscience,” the participant said.
The vast majority of Lebanese depositors have had their money frozen in 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, that meant almost no access to their savings.
Bank 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 taken to court, filing lawsuits to force the banks to release their money. In response, Lebanese banks retaliated in the form of strikes, denial of service and account closures.