DO IT LIKE THIS

Lebanon 2015 | EXECUTIVE GUIDE | INTERVIEW

TBY talks to Carlos Abou Jaoude, Founder & Managing Partner of Abou Jaoude & Associates Law Firm (AJA), on the introduction of Basel III and corporate governance.

Carlos Abou Jaoude
BIOGRAPHY
Carlos Abou Jaoude is the Founder and Managing Partner of Abou Jaoude & Associates Law Firm (AJA), one of the largest law firms in the MENA region. He has gained broad knowledge and experience during several years of practice in Europe (mainly Paris, London and Geneva) and Beirut. His vision, strategy and relentless endeavors are at the foundation of AJA’s values and strive to evolve into a modern legal services institution mirroring the very best in the industry. His multidisciplinary expertise and international experience in a broad range of industries in both the public and private sectors include corporate law, banking and finance, mergers and acquisitions, capital markets and securities, real estate development, tax and succession planning, structured finance, financial restructuring and insolvency, telecommunications, media, project development and finance and privatization. He holds a master in French and Lebanese Law from the St. Joseph University, Beirut, and is admitted to the Beirut Bar.

According to Shadi A. Karam, the Basel III requirements and fierce competition in Lebanon's banking sector are likely to lead to further consolidations. What opportunities do you see in that regard?

Basel III requirements are summarized by capital (strengthening capital through common equity and creating conservation buffers), risk coverage (more rigorous credit analyses, substantial strengthening of the counterparty credit risk framework, etc.), containing leverage (non-risk-based leverage ratio that includes off-balance sheet exposures will serve as a backstop to the risk-based capital requirement), risk management and supervision, and market discipline. These requirements, when added to fierce market competition, trigger further consolidations in the banking industry. The policy of the US Treasury aimed at enhancing compliance is a key driver toward consolidation, especially due to substantial additional cost burden on small players.

How would you evaluate the development of Lebanon in terms of corporate governance standards?

It is a little slow, but definitely sure. Banque du Liban continues to be the main driver of the governance initiative, through a large series of regulations, directives, and guidelines aimed at enhancing corporate governance. The Capital Markets Authority is launching another series of regulations aimed at preserving the integrity of the capital markets and protecting the consumers. There are three law enactment projects that are outstanding and have not yet passed by the parliament, regarding transfer of cross border cash, anti-money laundering, and tax compliance. Lebanon has to seriously consider passing these laws to preserve its dealings with the international financial system. As anywhere, the private sector has demonstrated its ability to abide by higher levels and standards of governance through adopting internal policies, directives, and governance principles that are aligned with international standards. It makes me proud to name in this regard Bank Audi, which is not a client of the Firm, FFA Private Bank, Malia Group, and Africell Group which are clients of the firm.

How does AJA cater to multinational clients?

AJA, like many other reputable local law Firms, provides high quality services to multinational clients. The legal industry in Lebanon hosts a large number of legal counsels holding degrees from reputable US, UK, and French universities, and have benefitted from foreign experience enabling them to service adequately multinational clients.

What advice would you give to a foreign investor seeking opportunities in Lebanon?

Lebanon is the only democracy in the MENA region (other than Cyprus and Israel), and has substantial needs and opportunities in the telecom infrastructure and energy sectors. Lebanon enjoys a great banking sector, skilled labor, and quality living environment, and accordingly can serve as a key platform for global corporations wishing to carry out business in Lebanon and in the region.

What is AJA's main focus as well as expectations for the year ahead?

We aim to pursue AJA's expansion plan aimed at reaching a size of 100 attorneys in three to four years (we are currently 46), with a key focus on vital business areas for the economy, mainly banking, finance, energy, telecoms, real estate development, media, and governance.