Tag Archives: Central Bank of Libya

Libya: Central Bank (CBL) Imposes 5 Inspection Companies to Control Trade with Libya

 

In its attempt to stamp out corruption, the Central Bank of Libya (CBL) has imposed the following 5 Companies to Inspect all goods traded with Libya: Lloyds, Bureau Veritas, DNV-GL, GQS (Global Quality and Services) & GITO (General Inspection Technical Office)

Attached is the Official Circular (In Arabic only).

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Libya: National Oil Corporation warns oil market against illegal contracts (Statement)

 National Oil Corporation (NOC) today reasserted that it is the only body authorized by United Nations resolutions to export crude oil and oil products from Libya.

 NOC confirmed that term contracts covering the entire production for 2017 for all Libyan crude grades have already been entered with 16 international oil companies. Only these companies are legally contracted to buy Libyan crude oil and to charter shipping tankers from Libyan ports for 2017. The companies are the following: ENI, Total, OMV, Repsol, Rosneft, LukOil, Cepsa, Saras, API, Glencore, Socar, Unipec, Vitol, Gunvor, Petraco, and BB Energy. 

 NOC identified a group of individuals abusing the status of political division in Libya by entering into illegal contracts with unknown or unqualified companies. 

NOC said these individuals, and others associated with them, have offered Libyan crude oil for sale at huge discounts below the Official Selling Price (OSP). if implemented the losses to the state of Libya of these contracts would be hundreds of millions of dollars in lost revenue. 

NOC warned the maritime market and crude oil market that these contracts are illegal and that entering into them may lead to serious legal consequences and financial losses. NOC does not accept responsibly or liability whatsoever for any loss or damage incurred as the result of entering into contracts with unauthorized individuals. 

NOC also confirmed that all crude oil exports are paid by documentary letters of credit, and at the Official Selling Price (OSP) without any discount.

 NOC – Tripoli 26.03.2017

 

Libya: Press-release by NOC confirming East & West offices Unity

Full statement:

Eng. Mustafa Sanalla and Dr. Nagi el-Maghrabi, met on 15May 2016 in Vienna to agree on steps to unify NOC and lift the blockade at Hariga port.

The meeting was held at the direction of the Presidency Council and was the fourth such meeting between Mr. Sanalla and Dr. el-Maghrabi since a first meeting on March 17 in Tunis.

The two sides signed a memorandum of understanding asking the House of Representatives and the Presidency Council to unify the oil sector. The two sides also agreed to resume crude oil shipments from Hariga to avoid damage to pipelines, avert a financial crisis, and ensure power supplies are not interrupted further. Resuming crude oil supplies will help to limit the Deficit in Libyan budget, the draw on CBL reserves and the direct effects on LYD rates. The MOU makes no distinction between shipments for export and for domestic supply.

MT Seachance sailed today from Marsa Al Hariga with 660k BBL onboard announcing the resumption of the export from the port.

In conclusion, we take this opportunity to assure the oil market about the future stability in the production of Misla & Sarir and exports from Marsa Al Hariga and we will do our best to restore the confidence in the Libyan grades.

Tripoli 20 May 2016

Libya: Khoms Port police seize money laundering containers

Khoms police reported yesterday that it has stopped containers of goods purported to be part of a money-laundering operation. Its Counter Crime Unit stopped the seven containers after they had exited the city’s port.

The containers were supposed to contain foodstuffs according to declared documentation and hard currency letters of credit (LC).

The Counter Crime Unit did not give the exact value of the transaction but reported that the LC was opened in the ‘’millions of dollars’’. The case was seen as further possible evidence of the widespread money-laundering and ‘’exhaustion of assets of the country and abuse of public funds’’.

Upon inspection, the seven containers were found to contain a front row of relatively inexpensive boxes of tea and the rest of the containers were full of even more inexpensive boxes of water.

In March, Khoms police reported that it had also seized containers supposedly full of household goods, but again these only had a front row of household goods – with the rest of the containers full of the more lucrative fireworks.

It will be recalled that there have been a number of cases over the last year of money-laundering through the opening of hard currency LCs, only for the alleged criminals to import goods either at the fraction of the value of the LCs – or to even send empty containers to Libya.

There have been reported cases where the beneficiaries of the money-laundering LCs have all together abandoned their containers in Libyan ports.

The Central Bank of Libya and Audit Bureau have been conducting a campaign to counter this phenomenon. Critics have accused the CBL of acting too late.

LH 12.4.2016

 

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: 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