|
 CERTIFICATES
OF
DEPOSIT
A
Certificate
of
Deposit
is
a
medium
term
investment
that
provides
investors
with
an
opportunity
to
generate
a
higher
return
than
that
earned
from
a
regular
savings
account.
Any
individual,
institution,
or
corporation
seeking
a
diversified
investment
may
subscribe
to
a
Certificate
of
Deposit.
As
compared
to
a
savings
account,
a
Certificate
of
Deposit
offers
the
following
advantages:
1-
The
highest
return
on
any
liquid
investment.
2-
Substantially
higher
interest
than
LIBOR,
the
London
Interbank
Offer
Rate
3-
No
commission
charges
whatsoever.
4-
No
withholding
Taxes.
5-
A
readily
discountable
instrument.
Certificate
of
Deposit
investment
instruments
are
regularly
issued
by
Bank
of
Beirut
s.a.l.
and
offer
variable
terms
and
conditions
on
amounts,
rates,
maturities
and
currencies.
Terms
and
conditions
Relevant
articles
of
Decision
No.
5572,
dated
June
8th,
1994,
issued
by
the
Governor
of
the
Central
Bank
of
Lebanon.
Article
4:
Certificates
of
Deposit
must
be
issued
in
minimum
denominations
of
LBP
100,000,000
or
USD
50,000
or
the
equivalent
of
such
US
Dollar
amount
in
any
other
foreign
currency,
calculated
as
at
the
date
of
issue.
Article
6:
Certificates
of
Deposit
must
be
issued
in
nominal
amounts
and
the
interest
calculated
on
the
basis
of
365
days
a
year.
Article
8:
Prior
to
the
issuance
of
Certificates
of
Deposit,
a
contract
between
the
Bank
and
the
depositor
must
be
executed.
The
contract
should
mention
the
amount
received
by
the
Bank,
the
issuing
date,
the
maturity
date,
the
interest,
along
with
its
method
of
calculation
and
the
method
and
place
of
repayment,
the
issuing
number,
and
the
Certificate
of
Deposit
serial
number.
Article
10:
The
transfer
and
endorsement
of
Certificates
of
Deposit
are
subject
to
the
provisions
of
the
Code
of
Commerce
related
to
the
transfer
and
endorsement
of
securities.
Article
11:
1-
It
is
strictly
prohibited
for
the
issuing
institution,
or
its
branches
or
affiliates
or
sister
companies,
to
discount
or
to
purchase
directly
or
indirectly
Certificates
of
Deposit
it
has
issued.Any
purchasing
or
discounting
by
any
bank
or
financial
institution
2-
Any
discounting
or
purchasing
of
Certificates
of
Deposit
by
Banque
du
Liban
for
the
benefit
of
the
issuer
is
prohibited.
Article
12:
The
same
conditions
and
provisions
required
according
to
this
decision
on
Certificates
of
Deposit
do
apply
also
to
the
"interbank
certificate"
issued
by
banks
against
funds
received
from
other
banks
and
financial
institutions.
They
should
also
comply
with
the
attached
annexes
(3
and
4).
Article
17:
The
issuer's
external
auditors
are
obligated
to
verify
on
an
ongoing
basis
the
validity
of
the
issuance
of
the
Certificates
of
Deposit
and
the
interbank
certificates
compliance
with
applicable
regulations
and
to
advise
the
Banque
du
Liban
and
the
Banking
Control
Commission
of
any
violation
of
the
applicable
decisions
and
laws
Article
18:
The
contravener
of
the
present
decision
will
be
subject
to
administrative
penalties
set
by
the
High
Banking
Commission
in
accordance
with
the
provisions
of
articles
208
and
209
of
the
Code
of
Money
and
Credit.
General
provisions
-
Any
Certificates
of
Deposit
to
order
may
be
transferred,
by
endorsement,
to
a
named
person.
-
Any
moral
person
or
legal
entity
is
entitled
to
hold
Certificates
of
Deposit.
-
Interests
earned
on
Certificates
of
Deposit
are
exempt
from
taxes
on
movable
assets
pursuant
to
Title
3
of
the
Income
Tax
Law,
but
remain
subject
to
Income
Tax
when
entered
into
the
profit
account
of
any
resident
bank
or
financial
institution
or
any
business
entity
pursuant
to
Article
1
of
Decree,
No.
5429,
dated
20/9/1982
and
7/10/1982.
-
The
issue
date
of
Certificates
of
Deposit
is
not
included
in
the
calculation
of
the
interest.
-
If
the
maturity
date
falls
on
a
date
on
which
banks
are
closed,
for
any
reason,
the
Certificate
of
Deposit
shall
mature
on
the
first
business
day
following
the
closure,
without
additional
interest
being
due. |
