Gap Law: How Will the USD 100,000 Cap Be Applied to Depositors?
On December 26, 2025, the Council of Ministers adopted the so-called “Gap Law,” a text intended to provide a legal framework for the allocation of the country’s financial losses, estimated at around USD 70 billion, ahead of its forthcoming review by Parliament. The draft law was approved by 13 votes to 9.
The law introduces a classification of depositors based on the volume of their assets and provides for a guarantee mechanism for deposits of up to USD 100,000, in the form of staggered repayments over a four-year period. For amounts exceeding this cap, the legislative framework provides for the conversion of deposits into long-term financial instruments issued by the Banque du Liban, structured as asset-backed securities.
In this context, professional orders announced that they would hold a meeting on Monday to express their position regarding the measures set out in the law, particularly those affecting cooperative funds and pension funds.
Business lawyer and international arbitrator Ezzeddine Akram Baassiri responded, in this context, to a series of specific and technical questions put to him by Levant Time.
Q – How does the USD 100,000 guarantee cap apply to joint accounts?
A – The law explicitly addresses joint accounts in Article 8, paragraph IV, which provides as follows:
“IV – For the purposes of applying the provisions of this Article, the totality of the depositor’s personal accounts, as well as his or her share in joint accounts with all banks operating in Lebanon, shall be considered as a single deposit. Any inheritance account and any joint account, regardless of the number of its holders, shall be considered a single account. Joint accounts shall be apportioned among their holders in accordance with the terms of the agreement signed between them and the relevant bank; failing such terms, they shall be apportioned equally among the joint account holders. If the holder of joint accounts does not have a personal account with the bank, the totality of his or her shares in the various joint accounts shall be considered as a single deposit. The Banque du Liban shall determine the modalities for implementing this provision.”
The text thus specifies the method for allocating the balance of a joint account, which is carried out:
in accordance with the conditions set out in the account opening agreement signed with the bank; or
failing any determination of each holder’s share, in equal shares among the account holders.
On the basis of these provisions, several direct legal consequences arise.
First, a joint account does not benefit from a separate or independent guarantee cap. Second, the value of the joint account is allocated among the co-holders either according to the account agreement or equally in the absence thereof, for the purpose of calculating each depositor’s total deposit. Finally, the share attributed to each co-holder is added to his or her individual accounts and to his or her shares in other joint accounts.
Consequently, the USD 100,000 guarantee cap is calculated on the basis of the overall situation of each depositor, after taking into account all of his or her deposits, whether individual or derived from joint accounts.
Q – Does the USD 100,000 guarantee cap apply per bank or per depositor?
A – The draft law addresses the application of the guarantee cap where the same depositor holds accounts with several banks and adopts the principle of aggregating deposits across the entire banking system.
In this respect, Article 8, paragraph IV, explicitly provides that:
“The totality of the depositor’s personal accounts (…) with all banks operating in Lebanon shall be considered as a single deposit.”
On the basis of this provision, the law establishes precise consequences: The USD 100,000 guarantee cap does not apply per bank; it is calculated per individual depositor, regardless of the number of banks with which that depositor holds accounts.
Q- Are commercial companies and private institutions subject to the same rules as natural persons regarding deposit caps and treatment?
A-The draft law includes legal entities within the definition of depositors. Article 2 provides that depositors are:
“Depositors: natural or legal persons holding deposit accounts and certificates of deposit, in accordance with the legal definition of deposits and bank accounts provided by the laws in force and generally applicable, the rules of which are mainly set out in the Code of Obligations and Contracts and in the Commercial Code, in particular Article 307 thereof.”
The text does not provide for any specific or exceptional regime in favor of commercial companies or private institutions. Chapter IV of the law, devoted to the repayment of deposits, contains neither exceptions nor special mechanisms applicable to legal entities.
On this basis, several direct consequences clearly follow. First, commercial companies and private institutions are subject to the USD 100,000 guarantee cap. Second, their deposits are classified according to the same categories applicable to natural persons, namely small, medium, large, and very large deposits. Finally, the repayment mechanisms provided for in Article 8 of the law apply to them under the same conditions.
Q – What is the fate of accounts denominated in Lebanese pounds, and what exchange rate will apply to them under the USD 100,000 cap?
A – From a legal standpoint, the draft law includes accounts denominated in Lebanese pounds within its scope of application. Article 3 of the draft law provides that:
“This law applies to the Public Treasury, the Banque du Liban, and banks operating in Lebanon and listed as banks. It also applies to all accounts held with the Banque du Liban and the aforementioned banks, whether opened before or after 17/10/2019.”
In the same vein, Article 8, paragraph 4, provides that:
“The totality of the depositor’s personal accounts, as well as his or her share in joint accounts with all banks operating in Lebanon, shall be considered as a single deposit …”
The text makes no distinction between accounts denominated in foreign currencies and those denominated in Lebanese pounds. As a matter of principle, accounts in Lebanese pounds therefore fall within the scope of the law.
However, Chapter IV of the law—and more particularly Article 8 and the provisions that follow—organizes the mechanism for repaying deposits and is exclusively limited to the repayment of deposits denominated in U.S. dollars. It does not explicitly address deposits in Lebanese pounds, nor does it provide any specific mechanism or direct method for repaying or revaluing such accounts in the context of the financial collapse.
Consequently, in the absence of any express provision or clearly defined mechanism in the text, accounts denominated in Lebanese pounds remain legally unregulated with respect to their repayment modalities. It is not possible to determine with certainty the exchange rate that will be applied to their revaluation, nor whether they will be taken into account within the USD 100,000 cap, nor under what conditions they might be counted if included.
Q – Cooperative funds and pension funds: what does the GAP Law actually provide, and what difficulties does it raise?
A – The GAP Law draft does not, in reality, provide for any specific provisions dealing with these structures, nor with mutual funds.
In the absence of a special regime, these entities are treated in accordance with the general rules set out in the text. Thus, pursuant to Article 2 of the law, professional orders, cooperative funds, pension funds, and mutual funds are considered legal persons.
Their deposits are furthermore treated as a single deposit within the meaning of paragraph 4 of Article 8 of the law. As such, they fall fully within the repayment mechanism provided for in Article 8.
In concrete terms, this mechanism has two components. On the one hand, these entities benefit from a repayment cap set at USD 100,000. On the other hand, the remaining balance of their deposits is converted into asset-backed financial certificates issued by the Banque du Liban, in accordance with the provisions of Article 8 of the law.
Through this article, Levant Time has sought to shed light on several grey areas surrounding the GAP Law. Further articles will follow to address additional issues and to provide clear legal and technical answers to the many questions raised by this text among the public.