Lack of audits undermine Lebanon’s claim to be Middle East gold heavyweight

With claimed gold reserves of 286 tonnes, Lebanon’s central financial institution – Banque du Liban – trumpets itself as being one of many Center East’s largest sovereign gold holders. In reality, on a regional foundation, solely the claimed gold reserves of Saudi Arabia are bigger.

Certainly, Banque du Liban governor Riad Salameh, made this very declare as lately as 8 April 2022 to Egypt’s Center East Information Company (MENA), saying that Lebanon has the second largest gold reserves throughout the Center East and North Africa.

Nevertheless, what Salameh didn’t point out in his interview is that the portion of Lebanon’s gold claimed to be held in Beirut has not been audited for at the very least 30 years and even longer, nor did he make clear something in regards to the the rest of Lebanon’s gold which is alleged (by a media narrative) to be held within the basement gold vault of that veritable and ever reliable privately-owned establishment, the Federal Reserve Financial institution of New York (FRBNY).     

In reality, given the selection, it’s troublesome to say which is worse, not with the ability to show a declare that you’ve got 100s of tonnes of gold saved domestically, or not with the ability to show if the opposite 100s of tonnes of gold which you declare was entrusted to the New York Fed is definitely nonetheless there. However sadly for the residents of Lebanon, the Lebanese central financial institution ticks each containers.

However that’s only the start, as a result of the scenario on the bottom is even murkier.

Belief Us, We’re Central Bankers

In July 2020, a Reuters article revealed that within the 2018 audited accounts of Banque du Liban (which have been by no means printed however which have been seen by Reuters), the Financial institution’s exterior auditors, Deloitte and EY, had solely signed off the central financial institution’s accounts by including some “{qualifications}” (warnings), one among which was that Deloitte and EY had been “unable to conduct an in-person stock of the financial institution’s gold reserves”.

This incapacity to carry out a bodily stock was as a result of what the auditors described as a “coverage which provides entry exclusivity to high executives of the financial institution”.

Particularly, web page 2 of the auditors report, in a bit titled “Foundation for Certified Opinion” mentioned that:

(a) We have been unable to conduct a bodily stock remark of the gold held by the Financial institution and valued at LBP 10,610 billion as of December 31, 2018, triggered by limitations associated to a complicated accessibility coverage which offers entry solely to high executives of the Financial institution.

Given the character of the associated enterprise cycle, we have been unable to carry out different auditing procedures.”  

In different phrases, the Central Financial institution of Lebanon prevented its personal exterior auditors from even going to have a look at the gold bars which the central financial institution claims to have in its vaults in Beirut. Or in different phrases, “you don’t have to see the gold, however belief us, it’s there”.

Whereas this could have instantly raised purple flags and led to Deloitte and EY strolling out of the constructing immediately, on this planet of complicit company accounting by the large auditing companies, all it led to was a ‘qualification’ to the accounts, and a big bill for giving their “Certified Opinion”.       

Though this auditors report was by no means printed, somebody kindly tweeted the related web page on Twitter, and you’ll see the complete web page 2 of the Deloitte and EY audit report beneath:

Deloitte and EY unpublished auditors report for 2018 Banque du Liban monetary accounts, with ‘qualification’ saying they have been prevented from even viewing the Financial institution’s gold holdings in Lebanon. Supply.

At this level it’s helpful to again up barely, and look into how a lot gold the Banque de Libon claims to have had over time, and the place and in what proportions this Lebanese gold was mentioned to have been distributed geographically.

In keeping with the World Gold Council’s central financial institution gold holdings knowledge (which is predicated on knowledge reported to the IMF by every central financial institution), the Lebanese central financial institution is the nineteenth largest central financial institution / official establishment gold holder, and claims to have 286.6 tonnes of gold which signify 50.5% of the Financial institution’s complete reserve belongings. This equates to about 9,220,620 troy ounces. The final narrative throughout the media is that the dimensions of Lebanon’s gold holding hasn’t modified in a very long time. So let’s attempt to confirm this.          

A World Financial institution report from 1991 in regards to the reconstruction of Lebanon following the top of the civil conflict (1975 – 1990) states that between 1985 and 1991, Lebanon’s gold reserves stayed fixed at 9.2 million ozs:

Desk 1, web page 4 – “Lebanon – Chosen Financial, Social and Demographic Indicators, 1985-90”:

“gold holdings which have been fixed over the interval at 9.2 million tremendous troy ounces.

Going again additional to the Nineteen Eighties, an financial historical past of Lebanon states that:

All through the Nineteen Eighties, the Central Financial institution maintained a good grip on the nation’s gold reserves and tried to do the identical with its overseas forex reserves. The federal government held 9,222,000 ounces of gold

Supply right here

Going again even additional to the Nineteen Seventies, there’s a 3 December 1976 US State Dept cable from the Beirut workplace to different regional US State Dept places of work stating that:




FOREIGN EXCHANGE          – US$ 1,208

IMF RESERVE POSITION               – US$ 2.7


Supply – Wikileaks

A gold valuation of US$ 383 million, on the official value of US$ 42 per troy ounce can be equal to 9,119,047 troy ounces as of August 1975.

So over time, we will see that numerous official sources extra of much less agree that Lebanon claimed to carry about 9.2 million ounces of gold, and that this determine hasn’t various a lot in over 47 years. Nevertheless, 1975 is an awfully very long time in the past, and huge upheavals have been skilled by Lebanon over that point – politically, economically and militarily – that would have impacted the possession, possession, management and truly existence of the nation’s gold reserves.  

Location of Lebanon’s gold reserves?

Turning to a different US State Division cable, this time from 29 December 1976 (after the Lebanse civil conflict had begun), the US State Dept workplace in Beirut wrote to the US State Dept and Secretary of State in Washington D.C., saying that:



Supply – Wikileaks

So on the finish of 1976, based on the US State Division, greater than 50% of Lebanon’s 9.22 million ozs of gold (greater than 4.66 million ozs) was positioned exterior Lebanon, which from a safety perspective would make sense, provided that there was a civil conflict in Lebanon at the moment.

Quick ahead to the 2000s and primarily based on some notes that I had made in 2013, three on-line sources had articles saying as follows:

Al-Shorfa (2010):  Two thirds of Lebanon’s gold in Lebanon and one third was on the Federal Reserve Financial institution of New York. Lifeless hyperlink. 

Government Journal (2011): Lebanon’s gold is held within the New York Fed, and on the Financial institution of England in London and in Lebanon. Lifeless Hyperlink and no points previous to 2016 archived.

BOLD Journal (2012, Challenge 6): Lebanon’s gold is held within the New York Fed and within the Banque du Liban. Lifeless Hyperlink. Not Archived  

With an unchanging gold holding complete for the reason that early Nineteen Seventies and with a majority of the gold held overseas in 1976, then two thirds of Lebanon’s gold might solely be held in Lebanon within the 2000s if a few of Lebanon’s gold was moved backed to Lebanon from overseas after 1976. In any other case somebody is mendacity.

It’s additionally attention-grabbing that one supply (Government Journal) acknowledged that a few of Lebanon’s gold was on the Financial institution of England in London. That will imply that a few of Lebanon’s gold was held throughout two non-domestic vaults. Whereas we’re on the topic, its additionally potential that as a result of given the historic connections between the Banque de Liban and the French Treasury, that a few of Lebanon’s gold was sooner or later within the vaults of the Banque de France in Paris.  

Gradual Movement Bar Depend

Quick ahead now to 2020. Bizarrely, the Banque du Liban’s refusal to permit its personal exterior auditors to even take a look at the Financial institution’s claimed gold reserves whereas they have been auditing the Banque’s 2018 monetary accounts solely turned identified to the Lebanese authorities throughout March 2020. That’s at the very least based on UAE newspaper, the Nationwide, which on 7 April 2022 printed a really attention-grabbing article about this topic.  

In it’s article, the Nationwide quotes two Lebanese senior civil servants, one among whom mentioned that:

The federal government requested a list in March 2020 after it was made conscious that one other auditor, Deloitte, had been unable to conduct one”.

“The demand, which was accepted by central financial institution governor, Riad Salameh, got here amid growing public scrutiny of the central financial institution’s funds.”

So sort of the central banker Salameh to just accept the demand from mere mortals within the Lebanese authorities to conduct a gold stock of the nation’s gold. This ‘demand’ then led to the beginning of a daft and battle ridden counting of Lebanon’s “gold reserves for the primary time in at the very least three a long time” by the central financial institution’s personal workers.

The Lebanese central financial institution governor – Riad Salameh, Beirut, 2019 

Unbelievably, solely about “20 per cent of the time-consuming train has been accomplished up to now two years, two senior civil servants informed The Nationwide.” Why? As a result of within the world rip-off which retains on giving, the Banque du Liban blames Covid for the sluggish progress. 

“Banque du Liban workers, who’re supervised by a authorities consultant, needed to pause their work for months owing to Covid-19.

They’ve descended into the financial institution’s vaults a number of instances per week to weigh 12-kilogram gold ingots which can be believed to quantity 13,000 in complete<. One after the other, the steel bars are positioned on a scale.

“It’s a really bodily job,” mentioned one of many sources.

Civil servants have but to start out on the estimated 700,000 cash the financial institution additionally holds.”

You couldn’t make this up. Simply 20% of the stock has been competed throughout 2 years, so does that imply one other 8 years for the opposite 80%? The Nationwide article is value studying in it’s entirety, however listed below are some additional nuggets.

As to why it’s claimed {that a} gold bar depend has not been executed in over 30 years?

“The [civil service] sources imagine that is the primary bodily depend of gold held on the BDL for the reason that Lebanon civil conflict, which raged from 1975 to 1990. Politicians say an audit could have occurred within the Nineties.”

Could have? No one even is aware of.

“I assume that Central Financial institution Governor Elias Sarkis, who purchased many of the gold within the second half of the Nineteen Sixties, counted it. However then there was the civil conflict, which made it troublesome” mentioned economist Kamal Hamdan, who heads the Beirut-based session and analysis institute.”


Presumably the counting of 100s of tonnes of gold throughout a 15 12 months civil conflict between 1975-1990 was not the most important drawback. The largest drawback certainly can be how, throughout practically fixed wars and conflicts together with the 1975-1990 Lebanese civil conflict and since then and with numerous marauding armies passing by way of Beirut, might anybody make sure that any of this gold was nonetheless safely sitting in a vault in Beirut all these years, and had not been seized or commandeered.




Beirut just isn’t unknown for murky and really massive gold bar transactions, and for instance, a US State Division Beirut Workplace cable from “Feltman” dated September 2007 describes an intriguing 50 tonnes of gold provide involving Hezbollah:


Iraqi businessman Dr. Sabah Hashem Allawi, brother of former Iraqi Prime Minister and present Iraqi MP Iyad Allawi, informed DCM and Econoff on 9/11 that he had been requested to dealer a sale of gold that he later realized was registered to Iran.

Emboffs met Allawi at a lunch in Beirut organized by outstanding native Lebanese businessman Abdel Wadoud Nsouli.

Allawi is the chairman of the board of the Trans Iraq Financial institution, and strikes ceaselessly between Baghdad and Beirut. He mentioned that within the latest previous he was contacted by somebody (NFI) and requested to dealer the sale of fifty tonnes of gold bars, and was supplied with the serial numbers and markings on the bars. He was informed that the gold belonged to Hizballah, who wished to promote it all of sudden, with a ten p.c low cost.

Allawi mentioned he contacted USB [he means UBS], a serious Swiss industrial financial institution. USB [UBS] researched the markings on the bars, and realized that they’d originated in South Africa, and have been produced and offered to Iran.

Feeling assured in regards to the gold’s origin, USB [UBS] supplied to make the acquisition and was within the technique of sending a consultant to Lebanon to finish the transaction, Allawi mentioned.

At that time the sellers reneged on the deal. Allawi mentioned that they’re apparently bleeding off the gold by way of smaller gross sales, however he supplied nothing to substantiate that.


Supply Wikileaks

Twitter Supply

Why does nobody appear to definitively know when the final audit of Lebanon’s gold was truly performed?

“The Nationwide was unable to confirm the time interval within the absence of a response from Banque du Liban and Deloitte, the central financial institution’s long-time auditor till it withdrew final 12 months. A bodily stock of a central financial institution’s gold ought to usually be executed often as a part of its audit.

Deloitte and EY Exit Stage Left

So Deloitte jumped ship in 2021. And there are not any exterior auditors attending the gold bar stock depend. In keeping with the Nationwide:

“One supply mentioned the BDL’s former auditors, Deloitte, and EY, began to attend the stock earlier than pulling out fully for causes that stay unclear.”

So Deloitte and EY jumped ship after they began to attend the stock depend. You’ll be able to’t make these things up. What did Deloitte and EY see? An empty vault?

However wait, after Deloitte and EY exited, their competitor KPMG got here to the rescue, however solely to audit items of paper.

 “The Finance Ministry in August 2020 requested KPMG to conduct an audit of the central financial institution’s monetary statements beginning in 2018. One other auditing firm, Alvarez & Marsal, is conducting a forensic audit of the financial institution.

“The stock is proscribed to checking that the anticipated quantity of gold is current. Audit firm KPMG will then step in to guage the steel’s value, the supply mentioned.”

And why is the huge KPMG, which has 236,000 skilled workers worldwide, not serving to with the gold stock, however merely wanting up a value on the LBMA web site?

“Mr Shami [Deputy prime minister of Lebanon] mentioned on tv this week that KPMG didn’t have the experience to help with the gold stock and would “rent consultants”.

Requested throughout a short telephone name to make clear whether or not the consultants would depend the gold in addition to consider its value, he mentioned: “I don’t know.”

Once more, you’ll be able to’t make these things up.

Private Fiefdom

Again to the 7 April 2022 article from The Nationwide. Is it simply coincidence that there was no stock or audit of Lebanon’s gold for the reason that present governor of the Banque du Liban, Riad Salameh was appointed to the position in 1993?

In keeping with the Financial institution’s web site, in an intensive and flattering bio which appears like Salameh wrote himself:

“Riad T. SALAMÉ is the Governor of the Banque du Liban, Lebanon’s Central Financial institution, since August 1, 1993. He was reappointed thrice for a six-year time period of workplace in 1999, 2005 and 2011. Governor Salamé manages all facets of the Central Financial institution and is assisted by 4 vice-governors and the Central Council.”


The place are the time period limits for central financial institution governors? In Lebanon’s case, they don’t exist. This was additionally the case for the federal government’s commissioner to the central financial institution, who was within the position for 20 years. The Nationwide writes:


“Mr Salameh was appointed shortly after the top of the conflict, in 1993. The request for a list can come from the federal government’s commissioner to the central financial institution, which, till 2016, was a job held by the identical individual for round 20 years, sources say. He died in 2021, and it stays unclear whether or not he by no means made the request or whether or not it was refused.


As a reminder, all it takes for a conspiracy is 2 or extra folks appearing in live performance. In keeping with the OCCRG, in March 2022:


“a Lebanese choose charged in absentia Central Financial institution governor Riad Salameh with illicit enrichment and cash laundering solely days after ordering the arrest of his brother on related expenses”


and that:


“authorities in France, Switzerland, Lichtenstein and Luxembourg have launched probes into Salameh’s private wealth, and potential embezzlement to the detriment of the Lebanese Central Financial institution.”


The Banque’s 60% – 40% declare


In keeping with the identical article within the Nationwide, Deloitte and EY ‘thought’ that 60% of Lebanon’s gold was in Beirut, and 40% was on the US Federal Reserve:


“A leaked report by Deloitte reveals that 4 years in the past, it evaluated Banque du Liban’s gold reserves at near $18 billion, of which 60 per cent is held in Beirut, and the remainder on the US Federal Reserve.”

How although would Deloitte know something about Lebanon’s gold provided that it wasn’t even allowed into the Financial institution’s vault in Beirut to have a look at any gold? Whereas this was a case of Deloitte flying blind and repeating what it had been informed by the Banque du Liban, you’ll be able to see that the narrative being pushed is that 60% of Lebanon’s unchanging gold holdings is in Beirut.

So what about the truth that ‘a majority’ of Lebanon’s gold was mentioned to have been saved overseas in 1976. Did a few of the gold come again to Lebanon? And why no point out of the Financial institution of England and London?

Of their audit report, Deloitte and EY additionally use a valuation for Lebanon’s claimed domestically saved gold of “LBP 10,061 billion as of December 31, 2018″. On the fastened change fee of £L1,507.5 per USD (the Lebanese pound is formally pegged to the USD at this fee), this equates to US$ 7,038,142.

The LBMA Gold Worth of 31 December 2018 fastened at $1281.65. This could suggest that Deloitte and EY have been valuing a amount of 5,491,470 ounces of gold. Out of a complete claimed holding of 9,222,000 ounces, this may imply that the Banque du Liban informed Deloitte and EY that 59.55% of its gold is saved in Beirut, and would imply that the Banque du Liban informed Deloitee and EY that the remaining 3,730,530 ounces of the Lebanese gold is saved on the Federal Reserve Financial institution of New York, or 40.45%. This 3,730,530 ozs equates to 116 metric tonnes.


The Banque du Liban  is the one central financial institution on this planet which controls a on line casino – the On line casino Du Liban. It additionally owns an airline – Center East Airways. That in itself present trigger concern as to what sort of wild west present the Banque du Liban actually is and the way its lengthy serving governor Riad Salameh controls the present. 

Briefly, the Lebanon’s gold might be anyplace by now. There isn’t any document that it has ever been audited. The final exterior auditors in Beirut have been denied entry to even see the claimed gold. The stock depend is being performed by Banque du Liban workers, not by exterior auditors. The Banque de Liban governor is beneath investigation in each Lebanon and throughout Europe.

Lebanon has had the misfortune of struggling 12 months after 12 months of wars, financial mismanagement and political corruption. And the Lebanon central financial institution needs folks to imagine that each one the gold it claims is in its vaults in Beirut is definitely there. In keeping with a November 2020 Wall Avenue Journal article titled “Lebanon’s Central Financial institution Fuels Corruption, Extremism Considerations”, the “US and allies search a forensic audit to examine for cash laundering, corruption and ties to Hezbollah“.

And this isn’t even taking of the Lebanese gold which is alleged to be within the New York Fed. Any gold that the Lebanese entrusted to the Fed vault in Manhattan might have way back been offered, swapped, leased, used as collateral for US and worldwide loans to Lebanon over time, or has the potential to be seized by the US if Lebanon doesn’t pay it’s overseas debt obligations. 

Whereas Lebanon handed a regulation “Legislation 42″ in 1986 prohibiting the sale of the Banque du Liban’s gold with out parliament approval, does anybody severely assume {that a} bunch of central financial institution executives who experience roughshod over worldwide auditing requirements and stop exterior auditors seeing precise gold in a vault in Beirut will care one iota a couple of parliamentary regulation? 

Lebanese “Legislation 42″ of 1986 which prohibites the sale of the Banque du Liban’s gold with out parliament approval. Supply.

The Worldwide Financial Fund (IMF) has additionally been sniffing round Lebanon’s gold, perhaps wanting a bit of the gold motion. And anytime the IMF is concerned in gold transactions, all the pieces is murky and secretive.  

Final month (April 2022), the IMF reached a cope with the Lebanese authorities on an financial reform program, the place the federal government agreed to various measures “prior the IMF Board’s consideration” together with “completion of the particular objective audit of the BdL’s overseas asset place, to start out bettering the transparency of this key establishment“.

In keeping with the Nationwide:

“The IMF didn’t reply when requested whether or not it had requested an exterior auditor to supervise the BDL’s gold stock.”

To seek out an instance of actual bodily purchases of gold by Lebanon, it’s important to go all the way in which again to the second half of 1949, when:

From June 20, to December 31, 1949 Lebanon purchased:

“1. – 100,000 ounces of tremendous gold from the Federal Reserve Financial institution of the US on the official value of 35 {dollars} per ounce.

2. – Gold ingots and cash as follows (value in Lebanese kilos):

A) Ingots; 6,195 Mexican pesos on the common uniform shopping for value of 182.617 

8,879 Rothschild ingots at 275.778 every

882.8722 kilograms of tremendous gold in ingots at 4,364.66 per kilogram

B) Gold cash;

38,315 gold kilos sterling (kings) at 38.616 every

16,000 gold kilos sterling (queens) at 38.318 every

58,200 gold Turkish kilos at 31.60 every

17,000 gold Iranian kilos at 34.27 every

The place any of the above gold is now’s anyone’s guess.

Nevertheless, there may be some gentle on the finish of the tunnel for Lebanon’s gold from a political / civic group in Lebanon known as Mmfidawla (web site, Twitter), who’ve known as for transparency on Lebanon’s gold holdings, and even known as for a repatriation of Lebanon’s gold claimed to be saved overseas. The group’s web site has a complete part (in Arabic) in regards to the Lebanese gold and a few articles and movies.

Intriguingly, one article (in Arabic) on the Mmfidawla website is written by deputy governor of the Banque de Liban, Ghassan Ayyash, who thinks that many of the Lebanese gold is held overseas, and particularly in Fort Knox’:

“the majority of gold inventory is exterior the management of the Lebanese state and its legal guidelines, as a result of it’s deposited within the American fortress “Fort Knox”, which doesn’t return the gold to its homeowners on the first request

One video (in Arabic) options Lebanese journalist and upcoming election candidate Jad Ghosn asking how a lot of Lebanon’s gold is within the US and the way it may be introduced again.

One other video (in Arabic) options Charbel Nahas speaking in regards to the Lebanon’s gold and will be seen beneath and on YouTube.

Gold bar audits are usually not rocket science and are comparatively easy. In reality, the exterior auditors of the enormous SPDR Gold Belief (GLD) conducts two gold bars stock counts per 12 months, neither taking various weeks. BullionStar workers 5 strategies of bullion stock auditing together with reside audit stories, third social gathering bodily inventories, buyer stroll in audits, and inventory stock audits. If the GLD and BullionStar can do do bodily audits, so can the Banque de Liban.

The truth that the Banque du Liban goes to extremes to not do an exterior gold bar audit reveals that it has quite a bit to cover. Lebanese residents needs to be very involved as to what has occurred to Lebanon’s gold. 


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