Libya: Carrying Horses in Trucks on 40-years old Ro/Ro ship – Is someone having a laugh ?????

A Maltese captain has been detained in the Libyan port city of Misrata, due to a horse trade dispute between the businessman he was transporting and a Libyan company.

MaltaToday is informed that captain David Bonello was transporting 64 horses in two trucks, aboard the ‘Med Patron’ cargo ship, property of the Patron Group shipping company.

The horses were the property of an Italian-Hungarian horse transportation company, who was shipping the animals to Misrata aboard Bonello’s ship to sell to a Libyan company.

However, upon entering the port, an agent for the Libyan company realized that 19 of the horses had perished on the journey. Representatives of the company surrounded the cargo ship with other ships, as well as cars on the quay, and demanded €100,000 in compensation for the dead horses.

The Libyan company has detained Bonello and the crew in Misrata until the ship’s agent – Patron Group chief executive Paul Attard – pays up.

The Maltese police force were informed of this case by Ivan Riccardi, the Italian businessman who owned the horses and trucks. Patron Group ensured the police that the situation is under control, and that they were waiting for a Libyan intermediate to pay the Libyan agency the €100,000 demanded.

MaltaToday is informed that the case was handed over to police inspector Daryl Borg, who had contacted the International Relations Unit and Immigrations’ Branch within the police force, both of whom admitted that they could not help as they have no official contact with the Libyan authorities.

(Malta Today 26.3.2016)

 

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Libya: CBL freezes 600 accounts for money laundering, refers them to Public Prosecutor

 

The Tripoli-based Central Bank of Libya (CBL) has frozen 600 bank accounts accused of money laundering offences and referred them to the Public Prosecutor’s Office (PPO).

The 600 frozen accounts represented 150 company bank accounts and 450 individual accounts.

The CBL said in its statement released today that within its role of fighting money laundering, it froze the concerned bank accounts, and thereafter it has referred the cases to the competent seizure authorities such as the Audit Bureau, the PPO and the Administrative Control Authority which are authorized by law with the power of investigation, seizure and arrest.

It will be recalled that in February this year the Attorney General/Public Prosecutors Office had issued a number of arrest warrants for financial corruption including for abandoned containers in Tripoli port that first came to light in August 2015.

In November 2015 it was reported that 110 containers of rice unfit for human consumption were unloaded at Tripoli port. Social media had shown photos of insect infected rice.

The insect-infected 110 containers were reported to be part of a larger deal totaling 400 containers for 10,000 metric tons of rice at an estimated value of LD 10.3 million.

There has been much public pressure on the CBL and Audit Bureau to fight perceived corruption in light of Libya’s deteriorating economic and financial situation caused by reduced oil production/exports, low international crude oil prices and the political and military divisions in the country.

This has resulted in cash shortages at banks, inflation and rising consumer prices, a fall in the exchange rate of the dinar, diminished state spending and the late payment of state-sector salaries.

LH 15.03.2016

Libya: Over 500 abandoned containers in Tobruk port, part of foreign currency corruption scam

There are more than 500 abandoned containers in Tobruk port, Tobruk Deputy Port Manager, Omar Jilghaf told Libya News 24 yesterday as a result of the financial corruption that the country is experiencing.

He said that some have been in the port for more than 5 months and that most of the goods in them had perished and began to let off a foul smell. The containers had passed the legal time limit permitted by Libyan customs and that the port authority is in the process of disposing of or selling by auction their contents, he added.

‘‘Financial corruption is (the reason) behind these abandoned containers as some traders scramble for letters of credit (LCs) from banks at the official exchange rate. They buy cheap or useless products and leave them inside the port after they receive their hard currency which they use as they wish’’

The Deputy Manager said that some containers were actually empty and others contain products that no one needs – all done through fake and incorrect transactions. In some containers alcohol and (hallucinogenic) pills were found – all as a result of traders seeking dollars which they are not entitled to, he maintained.

The phenomenon of containers arriving at Libyan ports either empty or filled with goods costing a token of their declared price on official customs declarations forms has grown in post-revolutionary Libya as a result of the weak state and its weak enforcement and inspection institutions.

In theory, goods arriving at Libyan ports imported through the opening of LCs at the official exchange value of about LD 1.30 (as opposed to the black market rate of LD 3 to 4.50) to the dollar, are supposed to be inspected by customs officers to confirm that their contents tally with their pro forma invoice in value and specifications.

If the inspections of containers by customs officials at Libyan ports raise concerns, the LCs are supposed to be stopped. However, by bribing or in the case of militias coercing customs, port and bank officials, fake import transactions are able to get through.

As a result, corrupt ‘‘traders’’ in collaboration with bank, port and customs officials, are opening LCs in the millions of dollars which are transferred abroad – but in return for either grossly undervalued goods or indeed empty containers.

The scam is costing Libyans hundreds of millions in hard currency at a time when low oil production and exports and low international crude oil prices mean that Libya’s hard currency revenues and reserves are depleting fast.

Commenting on the news, leading Libyan businessman Husni Bey whose group of companies are one of the largest importers of goods into Libya, said ‘‘we thank the Deputy Manager of the port of Tobruk for exposing and broaching the subject’’.

‘‘I ask him and the rest of the managers of Libyan ports to quote the names of the companies involved in the import, the names of shareholders of these companies, the names of the directors and the names of the signatories of the companies’ bank accounts’’.

‘‘I also request the names of the shipping lines, forwarders and carriers’ agents of those to be revealed. A thorough independent investigation must be carried out’’, Bey added.

Speculating on the possible size of the problem, Bey said ‘‘If there are 500 abandoned containers in the port of Tobruk, this is just the tip of the iceberg, then certainly there are 10,000 abandoned containers across all Libyan ports’’.

‘‘I hope that we call criminals “criminals” and not “traders ” because criminal offenders must be called “criminal” and not by any other misleading name “, Bey concluded.

It will be recalled that in February this year the Attorney General/Public Prosecutors Office had issued a number of arrest warrants for financial corruption including for abandoned containers in Tripoli port that first came to light in August 2015.

In November 2015 it was reported that 110 containers of rice unfit for human consumption were unloaded at Tripoli port. Social media had shown photos of insect infected rice.

The insect-infected 110 containers were reported to be part of a larger deal totalling 400 containers for 10,000 metric tons of rice at an estimated value of LD 10.3 million.

LH 10.03.2016

Libya: CBL to open LCs as black market dollar peaks at LYD 4.50 today

The Tripoli-based Audit Bureau held a meeting in the capital today with various institutions including the Central Bank of Libya (CBL) in order to attempt to solve the huge financial crises that the country finds itself in.

In a statement released by the Audit Bureau after the meeting, it confirmed that a meeting was held ‘‘to discuss the liquidity crises experienced by the country and the development of proposals and solutions for the immediate and medium term’’.

‘‘It was agreed to accelerate the resolution of the crises through a number of procedures that would speed up the flow of funds in banks as of next week by opening letters of credit (LCs) to provide basic goods and other operational materials’’, the Audit Bureau said.

Unconfirmed reports from the meeting say that the plan is for the CBL to open US$ 2 BN of L/Cs at the official exchange rate of around 1.30 for importers.

It is clear that the CBL is not in favour of an earlier policy option floated by the Administrative Control Authority of pumping LD 10 bn of newly printed banknotes into the economy in the hope of solving the cash crises at banks. The pumping of cash into the economy was seen by critics as inflationary and counter-productive.

The meeting is long overdue in view of the cash crises in Libyan banks, the collapse in the value of the Libyan dinar against foreign currencies as well as the rise in prices.

Today, one Tripoli-based black market money exchanger reported to Libya Herald that the dollar reached a record LD 4.50 and the Euro 4.90 against one dinar. This followed a raid on the black market on Monday by security personnel forcing them to close their bureaux and cease trading.

The move on the money traders follows the questionable populist narrative that it is the black market traders who are controlling the flow of foreign currency in order to force exchange prices upwards.

It is not clear if the CBL is going to relax its newly introduced conditions for opening LCs. In an effort to fight criticism and answer back public criticism, the CBL introduced numerous conditions which many business leaders saw as prohibitive.

The CBL is caught between a rock and hard place in attempting to be seen to be fighting foreign currency corruption at Libyan banks, in managing its fast diminishing foreign currency reserves but at the same time satisfying foreign currency demand so as not to cause the black market exchange rate to overheat.

Critics, however, have told Libya Herald that they still believe that the CBL is ducking the hard decision of officially devaluing the Libyan dinar to nearer the black market value of 1 to 3. The CBL finds it politically unpalatable to be associated with a dinar devaluation.

In ordinary political circumstances, the CBL would probably be persuaded by its sovereign parliament, to which it is accountable, to devalue the Libyan dinar. But in the legitimacy and political vacuum that Libya finds itself in, the CBL seems reluctant to take the hard decision on its own.

But critics today said that the decision not to devalue is very short term-ist. It will only encourage the black market and subject the banks to pressure and coercion as those with access clamor to get LCs at the official exchange rate.

The most equitable across-the-board solution is to devalue the Libyan dinar and wipe out the black market by making foreign currency available to whosoever demands. The downside is that as all newly imported goods will be at the new devalued exchange rate prices will rise in the short term.

The devaluation will also attract Libyan dinars into the banking system thereby resolving the cash crises as well.

This view presupposes that the rise in the black market exchange rates as well as the cash crises are purely financial. However, there is the view that Libya’s financial crises is as much caused by the political crises and fear and insecurity and that as long as these underlying problems persist Libyans will continue to hoard their cash at home and the black market exchange rate will remain high.

LH 9.3.2016