Lebanon has been placed on a grey list of countries under special scrutiny by financial crime watchdog FATF, two financial sources said, with the official announcement expected later today.

A spokesperson for Lebanon's central bank and for the Financial Action Task Force (FATF) had no immediate comment.

Lebanon has been in a financial crisis since 2019 that has been left to fester by the country's leaders and now faces growing damage from Israeli airstrikes and ground operations against Hezbollah.

One source said the war had led the FATF to give Lebanon until 2026 instead of 2025 to address the issues that led to its grey-listing, including concerns over terrorism financing and a lack of judicial independence.

The grey-listing is likely to further deter investment in Lebanon and could affect the relationship between some Lebanese banks and the global financial system.

(Reporting by Timour Azhari in Beirut, additional reporting by Tassilo Hummel; Editing by Toby Chopra)