Tuesday, 15 Jan 2013
Overseas Business Risk - Lebanon
Political and Economic
Lebanon has entered a period of political reconciliation. A national unity government was formed in July 2008 following the election of President Sleiman in May. But tension is likely in the run up to parliamentary elections due to be held on 7 June 2009. Anyone travelling to Lebanon should try and keep themselves well informed and closely monitor political and security developments.
The Lebanese economy has so far remained largely unaffected by the current global financial crisis. GDP growth in 2008 was robust (estimated at 7% to 8%) and projections for 2009 range between 2.5% and 4%. The banking sector is strong and well capitalised, and tight regulations from the Central Bank have prevented banks from investing freely in international structured and derivative products. 2008 was the most profitable year ever for Lebanese banks and deposits rose as the Lebanese with money in western and Gulf banks, decided to invest in the stable banking sector at home.
Lebanon is largely a consumption economy with a low manufacturing base and low exports. Remittances from the Lebanese diaspora overseas are an important source of external funding of the economy (about 26% of GDP) and constitute a significant portion of investment into the country. There are no signs so far that the level of remittances has been affected by the global slowdown. Tourist numbers are at a record high. Bilateral trade between the UK and Lebanon increased in 2008 (UK exports to Lebanon rose by 35.7% over 2007 and Lebanese imports to the UK rose correspondingly by 11.9%).
But the Government has some key issues to address. These include reducing the level of public debt, which currently stands at 162% of GDP. The debt is largely held by local banks. Debt service levels remain high at about a third of Government expenditure. At the Paris III conference in January 2007 donor states pledged nearly US$7.6 billion in grants and soft loans to Lebanon, on condition that the Government carry out a wide range of reforms. Many of these reforms have still to be implemented, including the privatisation of the cellular telephone networks and the corporatisation of the state-owned electricity provider, EDL.
Since the onset of the Arab Spring, human rights reform has stagnated in Lebanon and continues to be below international standards. This has been compounded by internal divisions which have prevented progress on draft laws on human rights issues. There is no agreed moratorium on the death penalty, or a national mechanism for the prevention of torture. Arbitrary detention and prison conditions fall far short of international standards.
Despite appearances, women’s rights are not as progressive as they could be - women face discrimination under personal status laws and have no means of protection from domestic violence. The rights of migrant domestic workers and refugees remain incredibly limited and their situation unimproved with prevalent mistreatment and no available redress.
Despite these shortcomings, the country has taken steps to improve the human rights situation. Lebanon has acceded to six of the seven UN conventions on human rights and to seven of the eight International Labour Organization (ILO) conventions concerned with human rights. The country underwent the UPR process in 2010, which generated 23 recommendations for the country to implement, some of these are now beginning to be fulfilled such as the launch of the Lebanese human rights action plan.
Bribery and Corruption
Businessman reading newspaper
Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world.
In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.
Requiring their counter-parties to enter into confidentiality agreements during
Lebanon has a series of anti-corruption laws (details can be found on ). Lebanon ratified the United Nations Convention Against Corruption (UNCAC) in October 2008; this is the most comprehensive piece of international anti-corruption legislation and includes a section on the private sector (See ). The Lebanese Transparency Association (LTA) and the United Nations Development Programme (UNDP) agreed a national anti-corruption strategy in March 2009 which covered many recommendations including the creation of a national anti-corruption commission, an administrative reform plan, new anti-corruption legislation and the promotion of an independent judiciary. Details can be found on
Lebanon has a number of unique factors that contribute to the terrorist threat in the country. It is the most religiously diverse state in the Middle East with various Christian groups accounting for around a third of the population and Shia, Sunni and Druze Muslims accounting for most of the rest. Since 2004 a number of Lebanese politicians and officials have been assassinated. Civilians have been caught up in these attacks.
The presence of a large Palestinian refugee population also continues to pose a threat to the country's stability and security. Tensions often run high in the camps as rival factions and Sunni extremist groups compete for dominance. We judge that some attacks which have occurred in Lebanon can be linked back to extremists from the camps. Previous terrorist attacks have taken various forms, including vehicle bombs, hand grenades and small, improvised bombs. There is a risk that Western and British interests may be targeted as well as areas where large numbers of people congregate. You are advised to maintain a high level of vigilance in public places, including tourist sites.
Protective Security Advice
If you decide to travel to or remain in Lebanon we strongly advise you to:
Heed local advice in areas which have not been declared safe from unexploded ordnance.
Keep abreast of latest developments by listening to BBC and other English language broadcasts.
Avoid large crowds and public demonstrations, which have the potential to turn violent.
Carry identity papers with you at all times and be prepared to stop at check points and to show your papers.
Ensure that your travel documents are readily available in case you need to leave the country at short notice.
Ensure that your passport and Lebanese immigration and residency permissions are up to date; failure to do so could impede your exit from Lebanon.
The main infringements of IPR in Lebanon are found in the piracy of copyrights (music, film software, books, satellite cables, pharmaceutical products), the counterfeiting of trademarks (textiles, footwear, luxury items, drinks, toys), infringement of patents (pharmaceuticals, agro-chemicals, machinery) and the infringement of designs and geographical indications. This has affected sales of both local and imported goods.
A new Consumer Protection Law was passed in 2005, which aims to protect the consumer against counterfeit products. Enforcement of this legislation however remains a problem. A report in “Lebanon Opportunities” (March 2009) estimated that more than half of the CDs, DVDs and software sold in Lebanon were illegal copies. The Ministry of Economy and Trade also set up a call centre to field complaints about counterfeit products. The Ministry has also presented a series of laws to Parliament (not yet passed) intended to conform to international laws on the protection of intellectual property and the Association Agreement between Lebanon and the EU. Details of this legislation can be found on the website.
In 2005 the Ministry of Economy and Trade, working with the private sector, set up the ' to make consumers aware of infringement issues, which advertised on local TV channels. This Group also set up a national Committee with representatives from various Ministries and consumer protection groups including the Lebanese Intellectual Property Association (LIPA) and the Business Software Alliance (BSA).
Businessman working at a computer
Organised crime exists in Lebanon, based mainly around a few family groups in the Northern Beka’a Valley and Hermel regions. Their activities include the production and trafficking of illegal narcotics, car thefts, car jackings and smuggling. The relative political stability since May 2008 has allowed the Security and Armed Forces to proceed with extensive operations against these clans, resulting in significant arrests and illegal substances seizures and reducing their influence outside of these areas. There is also some evidence of the involvement of organised crime in prostitution, racketeering and related people smuggling.
The risk to visitors from petty or violent crime is low by international standards, though vehicle crime and bag snatching continues to be relatively high. In addition there are increasing reports of armed robberies taking place in shared taxis (known locally as “service” taxis) with passengers being robbed by either the driver or other passengers. It is advisable to only use taxis from recognised companies and to not use shared taxis or taxis hailed on the street. Normal precautions should be taken.