Central Bank of Libya Circular Letter No. 13/2015 on Suspension of Financial Supervision Program and Freezing of State Accounts

Central Bank of Libya
P.O. Box 1103 | Telegraphic Address: CBLJLYLX - Tripoli, Libya

Reference: ARM/N 804

Circular Letter No. ARM/N (13/2015)
Date: 30 Rabi' al-Awwal 1436 AH / January 21, 2015 AD

To the General Managers of Commercial Banks
To the Heads of Interim Administrative Committees of Commercial Banks
To the Director General, Libyan Foreign Bank

Greetings,

The Central Bank of Libya has received a letter from the Head of the Libyan Audit Bureau, bearing Reference No. (2015-19-453), dated January 20, 2015 AD, addressed to the Governor of the Central Bank of Libya and the General Managers of Commercial Banks. It is accompanied by Decision No. (23) of 2015 regarding the suspension of the Valid Financial Supervision Program and the application of supervisory procedures to state accounts.

Accordingly, please find enclosed herewith the aforementioned letter and its attached decision, and you are requested to take the necessary actions regarding them.

Peace, mercy of God, and blessings be upon you,
ABDUL HAFIDH MASOUD TRIBIL
Manager of Banking and Monetary Supervision / Acting

Copies to: //
To the Governor
To the Deputy Governor
To the Undersecretary of the Audit Bureau
To the Press Monitoring and Compliance Department
M. Al-Fitouri / Circular Letters 25

www.cbl.gov.ly | Swift Code: CBLJLYLX | Fax: +218 21 444 1488, Phone: +218 21 333 3591

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Libyan Audit Bureau
Head of Audit Bureau Office

Date: 2015/.../...
Reference: 2015/.../...

URGENT AND IMPORTANT

Respected Governor of the Central Bank of Libya,
Respected General Managers of Commercial Banks:
(National Commercial - North Africa - Unity - Al-Sumhouri - Republican - Foreign Libyan - United - Amanat - Mediterranean - Arab Commercial - Trade and Development - Gulf First - Coast and Sahara - Al-Wafa - Al-Wahat).

Greetings,

Pursuant to the execution of duties and responsibilities assigned to the Audit Bureau under Law No. (19) of 2013 regarding the reorganization of the Audit Bureau and its amendments,

And in light of the critical stage the country is currently experiencing, as well as observations made by the Bureau regarding the non-compliance or failure of many government entities and institutions (owned by the General Treasury) to comply with Article (8) of Law No. (13) of 2014 regarding the approval of the state budget, by transferring their current (ledger) accounts to the Ministry of Finance account (General Revenue Account at the Central Bank of Libya), in addition to those entities and institutions opening numerous current accounts with you without knowledge or approval.

The competent authorities, in violation of Article (14) paragraph (2) of the State Financial System Law and its amendments, constitute negative phenomena that lead to the waste of public funds, in addition to what they may cause regarding the loss of control over liquidity balances in those accounts.

Therefore, and with the Audit Bureau's keenness to preserve and safeguard public funds in cooperation with relevant and competent authorities (Ministry of Finance, Central Bank of Libya, various banks) to reorganize and regulate those accounts and ensure the smooth flow of funds within the legal framework,

And in the shortest possible time, ensuring service to the country during this stage.

Based on Decision No. (23) of 2015 issued by the Head of the Audit Bureau regarding the suspension of the Valid Financial Supervision Program and the application of supervisory procedures to state accounts.
(Attached)

Dahra Square - Tripoli, Libya | P.O. Box: 2879 | Fax: +218 21 444 0630
dewan.libya@hotmail.com

FROM: CBL GOV | FAX NO.: 18214442471
21 Jan., 2015 10:39 AM P1

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Libyan Audit Bureau
Head of Audit Bureau Office

You are requested (each according to your jurisdiction) and as of the date of this letter, to take the following actions:

First: Suspend the implementation of the Valid Financial Supervision procedures currently in force under our letter No. (2014-19-3321) dated 14.09.2015 AD, and our Decision No. (361) of 2014 and its amendments.

Second: Freeze disbursements for all current accounts opened with you, pertaining to government entities, institutions, and departments (owned by the General Treasury), including the following:

1. Current accounts (current and deposits) of the Council of Ministers, ministries, inspectorates, agencies, public institutions, departments, and other affiliated entities across all branches, offices, units, and departments.
2. Current accounts of headquarters, units, battalions, brigades, and security and military divisions.
3. Current accounts of the aforementioned government entities under any title (municipality - popular committee - local council - social leadership - security directorate, etc.).

The freeze and suspension of disbursements from these accounts include the following:

1. The process of claiming any of these accounts.
2. The transfer or disbursement to the Ministry of Finance account (General Revenue Account) No. (190030) at the Central Bank of Libya.
3. Current accounts that carry serious risks despite being frozen and disbursed by authorized parties from the Ministry of Finance or Audit Bureau.
4. Accounts covered under the General Custody Law.

For importance, cooperation in execution and implementation is requested.
Accept our highest appreciation and respect,
May God grant success and assistance... Peace be upon you.

KHALID AHMED SHKSHEK
Head of the Audit Bureau

Libyan Audit Bureau

Dahra Square - Tripoli, Libya | P.O. Box: 2879 | Fax: +218 21 444 0630
dewan.libya@hotmail.com

FROM: CBL GOV | FAX NO.: 18214442471
21 Jan., 2015 10:40 AM P2

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Libyan Audit Bureau
Head of Audit Bureau Office

Decision
By the Head of the Audit Bureau
No. (23) of 2015 AD
Regarding the suspension of the Valid Financial Supervision Program and the application of supervisory procedures to state accounts

Head of the Audit Bureau,

• Having reviewed the Provisional Constitutional Declaration issued on August 3, 2011;
• And the State Financial Law, Budget and Accounts Law, and their amendments;
• And the Labor Relations Law issued under Law No. (12) of 2010;
• And Law No. (19) of 2013 regarding the reorganization of the Audit Bureau and its amendments;
• And Law No. (13) of 2000 regarding planning and executive budgeting;
• And Law No. (13) of 2014 regarding the approval of the state budget;
• And Law No. (1) of 2005 regarding commercial banks, amended by Law No. (46) of 2012;
• And General National Congress Resolution No. (67) of 2013 naming the Head of the Audit Bureau;
• And Decision No. (361) of 2014 regarding the committee implementing the Valid Financial Supervision Program on state accounts and its amendments;
• And the letter from the Minister of Finance/Minister of Planning No. (343 M.N) dated 7/1/2015 regarding taking certain financial measures;
• And what was decided through the Advisory Meeting of General Departments at the Audit Bureau, and the Executive Committee for the Valid Financial Supervision Program held on 15/1/2015;
• And what was concluded from the bilateral meeting of the Audit Bureau with the Governor of the Central Bank of Libya and the Ministry of Finance on 19/1/2015;
• And what the public interest dictates.

Decision

Article (1)
The Valid Financial Supervision Program currently in force under our Decision No. (361) and its amendments is suspended.

Article (2)
All current accounts belonging to public entities owned by the General Treasury are frozen, specifically the Council of Ministers, ministries, inspectorates, agencies, public institutions, departments, and affiliated entities. Disbursements from these accounts are permitted only upon transferring their remaining balances to the General Revenue Account and suspending checks until deposited into the Deposits and Advances account.

Article (3)
The Minister of Finance, or his delegate, shall issue letters releasing the frozen current accounts pertaining to budget chapters. This applies to accounts where all remaining balances are transferred to the General Revenue Account, and their balance is zero, except for Deposits and Advances accounts which remain frozen until disbursement is obtained upon Audit Bureau approval.

Article (4)
The Ministry of Finance shall not transfer appropriations based on 1/12 of the 2014 budget or issue authorizations under the 2015 budget to any entity until the provisions of this decision are implemented.

Article (5)
The competent authorities shall implement this decision, and it shall take effect from the date of its issuance.

KHALID AHMED SHKSHEK
Head of the Audit Bureau

Auditor General
Corresponding Date: 19/1/2015 AD
M.M.

Dahra Square - Tripoli, Libya | P.O. Box: 2879 | Fax: +218 21 444 0630
dewan.libya@hotmail.com

FROM: CBL GOV | FAX NO.: 18214442471
21 Jan., 2015 10:42 AM P4