Central Bank of #Libya eases foreign currency transfers – partially

Tripoli, 28 January:

The Central Bank of Libya (CBL) has partially eased foreign currency transfer restrictions for Libyan companies importing certain goods.
The CBL Governor’s decision No.1 of 2013 has allowed the transfer of foreign currency for the import of agricultural supplies and equipment, ITC equipment, computer supplies, medicines and medical supplies for commercial use by specialized companies.
There is still, however, a raft of conditions that Libyan importing companies and their banks must adhere to in order to be able to make a bank transfer abroad in payment for goods. These are:

1. Application form (ARMN 3/2008) must be completed.
2. A Pro-Forma invoice showing prices, varieties and quantities must be attached.
3. It must be stamped/signed by the local importer.
4. The full equivalent dinar amount will be deducted direct from the importing company’s local account.
5. The importing company must have a valid trade licence relevant to the goods to be imported.
6. The importing company must have a valid statistics code card issued by the Customs Department.
7. A maximum of US$ 100,000 can be transferred at any one transfer or a maximum US$ 250,000 per annum.
8. For transfers above US$ 250,000 companies must open letters of credit.
9. The importing company must provide customs documentation as proof that goods had entered Libya.
10. The importing company upon transfer signs an understaking that the goods are destined to Libya.
11. The local banks must adhere to any instructions by the CBL or any other official organ barring any company from overseas transfers.

The CBL had for months now stopped all foreign currency transfers  (excluding letters of credit) by local companies through their official company bank accounts.
This has understandably irked the local business community which has made its feelings clear to the CBL. Two weeks ago at a gathering in Tripoli of the business community, organized by the Libyan Business Council (LBC), the CBL Governor came in for a rough ride.
At the January 15 meeting (reported on by Libya Herald), business leaders could not understand why transfers were ceased in view of Libya’s stable oil production and exports as well as the stable international price for crude.
And although the Governor, in response, waved a thick black file at the business leaders claiming it was a long list of companies that had transferred money abroad without furnishing evidence that goods were  imported into Libya, they were still unconvinced.
Business leaders felt that there were contradictions in the Governor’s claims that he was in support of the private sector and in reducing bureaucracy, whilst enforcing transfer restrictions. They felt he was draconian in his approach by punishing the whole business sector for the misdeeds of a few errant companies.
The restricting of official bank to bank foreign currency transfers only encourages further the very active currency transfer black market – a market the authorities are trying to discourage.
Furthermore, business leaders also felt it went against the government’s desire to activate the local economy and encourage the unemployed and the former fighters back into civilian and commercial life.
It seems that this partial easing is an attempt by the CBL to meet those demands. However, the restrictions still only cover some specific sectors and goods, and it will be interesting to see what the reaction of the business community will be.
It will also be interesting to see if restrictions are eased further after the announcement of the 2013 budget in the coming days.
libya herald.