Constitutional Council Invalidates Article 3 of Bank Reform Law Amendment

The Constitutional Council issued a unanimous decision accepting the review submitted by President of the Republic General Joseph Aoun challenging Article 3 of Law No. 71 issued on September 10, 2026, which aims to amend certain articles of the law on banking reform and reorganization in Lebanon, and invalidated the challenged article, in addition to invalidating two phrases from Articles 19 and 27 of the same law.

The decision, issued on October 20, 2026, under the presidency of the Head of the Constitutional Council Judge Tanous Meshlab, came after studying the review submitted on September 22, 2026, the minutes of the parliamentary debates, and the audio recording of the session in which the law was approved.

On the merits, the Constitutional Council considered that Article 3 of the challenged law did not obtain the required majority during the vote in the House of Representatives, after the proposal to amend it according to the Finance and Budget Committee's formula fell through, without an alternative text being read or put to a vote, despite demands from several MPs for this.

It clarified that the law was adopted in its amended form by the Finance and Budget Committee, except for Article 3 which did not obtain the majority, and no vote took place on any other formulation for it, necessitating its invalidation, without this invalidation extending to Article 3 of the original banking reform law No. 23 issued in 2025.

The Council considered that there was no longer a need to examine the ground of challenge related to the principle of legislative clarity.

The Council invalidated from Article 19 the phrase "in addition to the decision prohibiting them from traveling," contained in the context of measures that can be taken against major shareholders, members of boards of directors and senior management, authorized signatories, and supervisory commissioners in banks under liquidation.

The Council relied on the fact that personal freedom, freedom of movement, and leaving the country may only be restricted by a decision issued by an independent judicial authority, in accordance with procedures guaranteeing the right of defense and the principle of confrontation. It considered that granting administrative bodies, including the Higher Banking Authority, the liquidator, and the liquidation committee, the power to prohibit travel merely due to serious grounds for suspicion, and without prior judicial intervention, constitutes an infringement on personal freedom, an encroachment on the powers of the judiciary, and a violation of the principle of separation of powers and the guarantees provided by the Constitution.

Similarly, the Council invalidated from Article 27 the phrase "and they are protected in this case from any judicial procedure or lawsuit brought against them," relating to bank employees who comply with the decisions of the Higher Banking Authority.

It viewed that this phrase raises ambiguity regarding the nature of the protection granted to employees, and whether it deprives those affected of the right to resort to the judiciary, which is one of the fundamental guarantees provided by Article 20 of the Constitution. It noted that the relevant paragraph already exempts employees from liability when complying with the Authority's decisions, which does not justify stipulating their protection from any judicial procedure or lawsuit.

The Constitutional Council decided unanimously to accept the review in form, invalidate Article 3 of the challenged law, as well as invalidate the two phrases contained in Articles 19 and 27, noting that the decision shall be notified to the President of the Republic, the Speaker of the House of Representatives, and the Prime Minister, and published in the Official Gazette. The decision is attached herewith.