Two and a half years into the October 2019 events, the Lebanese government passed the Capital Control law, a law that has been long awaited and strongly required by the IMF and international donors as one of the prerequisites to unlocking international aid to Lebanon. In details, the law aims at imposing restrictions on operations in foreign currencies, be it cash withdrawals or transfers to outside Lebanon, in a transparent manner in order to avert any further capital outflows, stop the devaluation of the local currency and protect depositors by safeguarding foreign currency assets in the banking sector. The capital control law proposes the formation of a special committee composed of the Minister of Finance, the Central Bank governor in addition to two economic experts and a high-ranking judge (grade 18 and above) that are to be appointed by the Prime Minister. In addition, the law stipulates that the Council of Ministers will determine the working mechanisms of the committee, which in its turn will specify the restrictions that have to be imposed, in addition to issuing decisions & amending them via periodic circulars that will be published by the Central Bank or via any other means it deems suitable. The law also specifies that cross border transactions of money are to be subject to applicable laws, while also prohibiting current account payments and transfers from any bank account or from an account at an adopted intermediary, whether resident or non-resident, subject to some exceptions. In details, exceptions include fresh funds, including those transferred to Lebanon after October 17, 2021 with the exception of money transferred according to the provisions of BDL decision number 13262 which requires people who have transferred $0.5 million of their deposits abroad since July 1, 2017 to channel back 15%/30% of said amount to Lebanon, according to their category. Other exceptions encompass funds related to international organizations & embassies, transfers or payments made by the Lebanese government or the Lebanese Central Bank, current account payments pertaining to covering medical expenses or expenses for Lebanese students studying abroad and payments for necessary imports (oil, medicine, food, industrial imports, etc.) as deemed by the committee. As for foreign exchange transactions, the law states that said transactions must be implemented at the rate determined by the Sayrafa platform, with the exception of those between one foreign currency and another that are performed between local banks and their foreign correspondents. Always in the same context, the capital control law prohibits any foreign currency conversion from the local currency to any foreign currency, with the exception of some type of transactions that are specified by the law. In details, said exceptions include transactions related to international organizations & embassies, operations related to the Lebanese government and the Central Bank, interbank operations, medical expenses & expenses related to Lebanese students abroad and import-related expenses. In the same regard, the law states that when it comes to the latter three of the aforementioned exceptions, the customer’s balance must not contain sufficient amounts either in foreign currencies or in fresh funds. As far as withdrawals are concerned, the law specifies that individuals can withdraw up to $1,000 USD per month, being it in USD, in LBP or in both currencies, with withdrawals via bank cards also included within said limit, while fresh funds are also excluded from any withdrawal limits. The law also outlines that all payments and transfers between residents and non-residents must be in Lebanese pounds, with the exception of some cases that are to be determined by the committee, while the use of foreign currency deposits is restricted to the transfer & withdrawal restrictions that were stated previously as well as for conversions to the local currency. When it comes to export proceeds, the exporter must repatriate the special transfer amount that is financed in foreign currencies in addition to 5% of the overall export value to his account at the concerned bank in Lebanon. The capital control law also restricted the opening of new accounts to those related to salaries, pension or social security payments, clearance of card transactions, deposit guarantees for letters of credit or letters of guarantee in addition to loans provided by credit institutions, foreign currency transfers to residents and accounts for fresh funds. In the same vein, the law states that the aforementioned exceptions are not applicable unless the concerned person has no other accounts at banks. The capital control law entrusted the Banking Control Commission (BCC) and the Central Bank to ensure its proper implementation. More particularly, the law requests the BCC to submit regular reports to the committee in this regard, while requiring the Central Bank of Lebanon to form, and within a period of 15 days from the publishing of the law in the official gazette, a special central unit that verifies that the operations being conducted respect the provisions of the law. The law also stipulates that any person (whether a physical person or a juridical person) who violates the provisions of the law shall be subjected to a fine that can attain 20% of the total size of the infringement size as well as a daily fine of 0.5% of the size of the breach until said amount is settled. The ratified capital control law supersedes any existing laws, notably the banking secrecy law. The law comes into effect immediately once it is issued in the official gazette and has a duration of two years, with a possibility of an extension by one additional year by the Council of Ministers based on the recommendation of the to-be-formed committee. Finally, it is worth noting that the capital control law still needs approval from the parliament in order to become effective.