By the end of the week, Lebanon is supposed to be added to the grey list of the Financial Action Task Force (FATF), a worldwide watchdog tracking financial crimes.

This ruling is apparently definitive and follows inadequate progress in addressing issues including money laundering and other financial crimes, notwithstanding appeals from Lebanese officials for leniency.

The gray list, which comprises nations under more scrutiny, could discourage investment in Lebanon, currently suffering a serious financial crisis since 2019. In August, central bank governor Wassim Mansouri said he was trying to stop Lebanon from being grey-listed, But without notable reform progress, Lebanon will be included on the grey list, individuals familiar with the FATF processes say, The decision is expected to be validated on Friday, the FATF plenary meeting in Paris.

Earlier warnings for Lebanon, in May 2023, came from a preliminary assessment showing grey-listing. The nation was given one year to fix several flaws in its financial institutions, including enhancing anti-money laundering (AML) policies, guaranteeing company ownership openness, and tightening legislative frameworks for asset freezing and seizure. The FATF discovered, though, that the required changes had not been completed, which led to the last decision to classify Lebanon as grey list item.

While the grey-listing is anticipated, Lebanon can yet be given more time to implement the asked reforms. According to sources, even if the country's grey-list judgment is final, it could still have chances to show further development before confronting any more penalties. But by discouraging foreign investors and delaying international financial operations, being on the grey list is probably going to hurt Lebanon's already precarious economy.

The financial problems of Lebanon have really gotten worse recently, The nation has been engulfed in a financial crisis defined by hyperinflation, a depreciating currency, and general poverty since 2019, The situation has been worsened by the continuous political unrest combined with Israeli military actions directed against Hezbollah, Former central bank deputy governor Nasser Saidi claims that recent estimates of the damage resulting from Israeli bombing assaults might cost the nation around $25 billion in repairs.

Governor Mansouri with other Lebanese officials have been aggressively trying to allay FATF issues. Seeking international financial aid, Mansouri is now in the United States attending discussions with the World Bank and the International Monetary Fund (IMF). Later in the week, he will then head to Paris to attend the FATF plenary, where the ultimate ruling on Lebanon's grey-listing will be revealed.

Furthermore helping to try to ease Lebanon's problems is France. An international summit in Paris scheduled for Thursday will aim to bolster security in the southern part of Lebanon and collect humanitarian relief for the nation. Given Lebanon's ongoing political and financial difficulties, the conference seeks to increase awareness of the nation's problems and inspire outside assistance.

Lebanon's position on the grey list will probably hamper its road to rehabilitation even further. The nation already has a terrible economic state, hence being grey-listed could restrict its capacity to draw the foreign capital it so sorely needs. Furthermore, the neglect of financial crime issues runs the danger of isolating the nation more from the world financial system, therefore aggravating its economic problems.

Lebanon's predicted FATF grey-listing points to a major blow to its attempts to stabilize its financial sector, Although there might yet be chances to work on the suggested reforms, the grey-listing is probably going to discourage investors and further tax the already weak national economy, Through conferences and aid projects, the international community keeps supporting Lebanon; nevertheless, in tackling its political and financial difficulties, Lebanon finds an uphill struggle.