UK-backed deal to end blockade of Libyan oil exports could lead to corruption investigation

Corruption is endemic in the vital oil industry in Libya and is cited as a major cause of hardship in the country, adding to the chaos that leaves one-third of people below the poverty line and contributes to the European migration crisis. Libya is divided between East and West. Under a precarious balance, oil, which is largely produced in the east is rich in minerals, is sold through the national state oil company to the west.

The UN-approved system was designed to protect Libyan oil wealth. However, claiming that oil revenues were being channeled into western militias attacking his forces, General Khalifa Haftar, a strong man from eastern Libya, stopped oil shipments from ports under his control, thus shutting down the country. oil industry of the country in difficulty

. The decision was made in the middle of fierce fighting last month in the ports between the self-styled Libyan national army of Mr. Haftar and the rival militia.

Faced with rising oil prices and imminent penalties imposed on Iranian oil, US President Donald Trump warned that he would take legal action against those responsible for the arrest. , whose power left him no choice but to comply.

The usual allies of Mr. Haftar; France, Egypt and the United Arab Emirates refused to support him, and last week Haftar agreed to hand over the ports to the national oil company based in Tripoli.

The decision triggered a sharp decline in the price of oil. The agreement announced the return of the daily production of 800,000 barrels of crude oil in Libya.

The lifting of the blockade by Mr. Haftar follows a meeting in Rome of the Foreign Ministers of the United States, Italy, France and the United Kingdom. According to sources close to the Libyan authorities, the apparent capitulation, within the framework of the agreement, the present international governments agreed that there should be a vast investigation on corruption under the auspices of the United Nations [19659004]. it was not a "firm" deal, but Libyan sources said that "everyone around the table said that it was a good idea," citing France, the UAE and other countries. Egypt as favorable. at the UN formally asking for the probe. Any investigation could be generalized and involve politicians, businessmen, western oil companies and traders operating in the country and the country's central bank.

All Libyan oil must be sold through the national oil company in Tripoli, with revenues going directly to the central bank.

Haftar camp critics have long claimed that money was stolen or channeled to extremist Islamist groups

The Central Audit Bureau of Libya and other investigations have suggested money from oil sales is lost in corruption to the tune of hundreds or even billions of dollars. The funds are generally believed to be stolen by militia in Tripoli, politicians and businessmen.

million. Haftar, however, has kept his fire on the governor of the central bank Saddek El-Kaber and has been trying for years to overthrow him.

Libyan sources said that at the meeting held in Rome, Mr. Haftar presented 11 central allegations of corruption and abuse of power to the central bank, which they said required investigation [19659004]. manipulate the official market and black market exchange rates and abuse their power to authorize who can obtain letters of credit in foreign currency.

The exchange of foreign currency is a potential way to make quick and illegal profits. 1.4 dinar is significantly lower than the black market rate of 6-10 dinars.

Letters of credit are supposed to be used by businesses to import goods, but they are mainly used these days for monetary fraud. The Audit Office reported that in 2016, letter of credit fraud totaled $ 5 billion. While they are issued by local banks, they are licensed by the Central Bank.

According to critics, much of the authorization is made by corrupt officials acting alone, although Mr. Haftar's badociates blame Governor Mr. El-Kaber for acts. Mr. El-Kaber has not responded to requests for comments by email, phone or via his personal badistant.

The House of Representatives of East Libya – considered loyal to Mr. Haftar – tried to dismiss Mr. El-Kaber in 2014, but he refused to leave, citing the central bank's dear independence from political interference.

The House of Representatives was irritated by its refusal to release funds for expenses.

million. El-Kaber previously accused Libyan governments of using the central bank as a "scapegoat" for their own misdeeds and accused them of lying to the Libyan public.

He also accused armed militias of carrying out a media war against him, using "corrupt money". In 2017, he accused politicians of "honeyed promises", adding that he had remained silent about allegations of wrongdoing "so that Libyan leeches do not exploit any of these statements."

The Independent was unable to contact him for comment.

Tarek Magerisi, visiting fellow and Libya expert at the European Council of Foreign Relations said: “It’s positive that the issue of state-corruption has come under attention as it is a problem that has been growing exponentially, and a new agreement on the distribution of oil revenues is an essential step towards securing meaningful peace in Libya.”

But, he added , it was important that any probe examines the structural issues that have allowed Libya’s oil revenues to be exploited so brazenly.

Any new deal, he said: “must not simply be a new agreement on who is allowed to steal from the state, but one that protects state spending from predation.”

Libyan sources close to the meeting claimed Mr El-Kaber had lost the backing of his allies in neighbouring countries or the international corruption investigation would not have been given the nod.

It is not clear if that is truly the case; the Libyan government is still awaiting a response from the UN to its request.