Central Bank of Libya

P.O. Box 1103 Telegraphic Address: MisrLibya - Tripoli - Libya

Reference: Ram/N ( ) 804

Circular Ram N No. (2024/02) Date: 20 Rajab 1445 Corresponding to: 01 February 2024

To: General Managers of Banks

Greetings,

Subject: Regulations Governing Foreign Currency Transactions

Based on the provisions of Law No. (1) of 2005 concerning Banks and its amendments, and within the framework of the supervisory and regulatory role exercised by the Central Bank of Libya on banks operating in Libya.

With reference to Circular Ram N No. (2023/23) dated 07 August 2023, regarding the request to form a specialized committee to study applications for opening standby letters of credit at commercial banks.

And to Circular Ram N No. (2019/01) dated 16 January 2019, regarding pricing controls for banking services in accordance with the principle of fairness and transparency in dealing with customers.

We convey to you the instructions of the Central Bank of Libya, as follows:

First: Regulations Governing the Purchase of Foreign Currency for Opening Standby Letters of Credit:

1. Banks are prohibited from selling in applications for opening standby letters of credit for all goods and services legally permitted for import, provided that a valid Central Bank of Libya (CBL) code is available.

2. Banks must exercise due diligence to verify the validity of data related to the entity requesting the opening of the standby letter of credit, and ensure there are no reasons preventing continued dealings with them before proceeding with the procedures for opening the standby letter of credit.

3. The standby letter of credit shall not be advised until the foreign currency covering the standby letter of credit has been purchased.

4. The upper limit for the value of a single service standby letter of credit is (2) two million US dollars, or its equivalent in other currencies, and for commercial goods is (3) three million US dollars, or its equivalent in other currencies, and for industrial goods is (7) seven million US dollars, or its equivalent in other currencies, taking into account the value of existing standby letters of credit for each entity when granting approval. In any case, the standby letter of credit for the supply of industrial goods exceeding the mentioned amount shall not be split.

5. Commercial banks must commit to transferring the value of the standby letter of credit to the Central Bank of Libya if the standby letter of credit is not opened within 15 (fifteen) days from the date of currency purchase.

---

www.cbl.gov.ly - swift code : CBLJLYLX - +218 21 444 1488: Fax - +218 21 333 3591 : Phone

---

6. In the event that the value of a single standby letter of credit exceeds the upper limit mentioned above, it requires presenting it to the Banking and Currency Supervision Department to obtain prior approval regarding the same.

7. The initial invoice must be approved and issued by the exporting or manufacturing company, or one of its agents registered in the exporting country. At a minimum, it must include all data related to the type, description, quantity, and price of the supplied goods or services, and the country of origin. The account of the beneficiary abroad must be in the same country from which the initial invoice was issued, and payment may be made to the parent company's account.

8. The value of the standby letter of credit must be fully covered by the available balance in the account at the time of requesting the opening of the standby letter of credit. Granting credit facilities of all kinds to cover standby letters of credit is considered upon their opening from their date.

9. Banks are prohibited from opening (Back to Back) standby letters of credit.

10. No bill of lading presented on the standby letter of credit, issued on a date prior to the advising date of the standby letter of credit, shall be accepted, except for bulk standby letters of credit, where a bill of lading issued up to (10) days before advising the standby letter of credit is accepted, with the charter date being within (30) days prior, and it is necessary to include this condition in the standby letter of credit opening message (MT700) sent.

11. The value of documents circulated on the standby letter of credit shall be settled thirty (30) days from the date of document submission by the sender, and this condition must be included in the standby letter of credit opening message (MT700).

12. Banks are allowed to receive shipping documents for standby letters of credit for goods (fertilized eggs - potato seeds) and bulk goods of Tunisian origin via the Ras Ajdir port, according to the controls provided by the Ministry of Economy and Trade pursuant to the letter with reference number (5/1/1194) dated 03 July 2021. Similarly, the supply of poultry and livestock via land transport from neighboring countries (Niger - Chad - Sudan), and bulk goods of Egyptian origin via the Em Said - Salloum border crossing, according to the controls provided in the letter from Mr. Minister of Economy with reference number (5.1.1589) dated 03 April 2022, provided that the account of the beneficiary company abroad issuing the invoice is in the same country.

13. Suppliers are obliged to provide original customs declarations indicating the entry of supplied goods through official ports in Libya, through the Customs Directorates subordinate to the Customs Authority instead of Customs Center Heads. The customs declarations must be submitted to banks within two months of receiving the documents, and all banks must inform the Banking and Currency Supervision Department of cases of failure to submit the required customs declarations in due time.

---

www.cbl.gov.ly - swift code : CBLJLYLX - +218 21 444 1488: Fax - +218 21 333 3591 : Phone

---

14. Obtain an import permit issued by the Food and Drug Control Center for the import of medicines, medical supplies, and equipment, to be in favor of the manufacturing company or regional agents in accordance with the provisions of Commercial Law No. (23) of 2010.

15. The entity requesting the opening of the standby letter of credit must provide a document insuring the supplied goods to the bank opening the standby letter of credit based on the initial invoice, issued by one of the insurance companies.

16. Provide an inspection and examination certificate issued by one of the inspection companies, and it is required that the inspection company be specialized with a valid Central Bank of Libya (CBL) code. It is also required that the inspection company provide a statement confirming its compliance with international standard requirements (ISO/IEC 17020:2012) and quality management system standard specifications (ISO9001:2015) and be accredited by the Libyan Accreditation Center. The inspection certificate must be supported by photos and analysis certificates issued by accredited international laboratories.

17. The entity requesting the opening of the standby letter of credit must provide two certificates of tax payment and statutory guarantee dues, and it is required that they be original and recent, covering the previous year for the entity opening the standby letter of credit. The tax payment certificate issued by the General Authority for Social Solidarity Fund must confirm that the entity is committed to paying its dues related to social solidarity contributions (1%) from the salaries of its workers and employees during the opening of the standby letter of credit, or any other procedures requiring that.

18. Bank administrations are obliged to exercise due diligence regarding the conformity of data in the invoice with the inspection certificate, health certificate, Libyan standard specifications, etc., and that prices are consistent with the specifications of supplied goods and their standard prices. Legal responsibility is borne by anyone who violates this.

19. Requests for opening standby letters of credit must not conflict with decisions issued by competent authorities regarding the determination of goods prohibited from import or export.

Second: Regulations Governing the Purchase of Foreign Currency for Personal Purposes:

Banks are granted the authority to decide on applications for selling foreign currency for personal purposes via the national ID number for every Libyan citizen aged eighteen years or above, after fulfilling all requirements provided in the Foreign Currency Reservation Platform for Personal Purposes, in addition to the following:

1. The maximum limit for what is sold to a single person through all banks operating in Libya is an amount of (4,000.00) four thousand US dollars or its equivalent in other currencies, and it may be considered for change later, provided that the person manages an account with the bank through which the sale is made, and the account must cover the value of the sold currency at that time, and its use shall be according to the following means:

   • A- Issuing and shipping (VISA - MasterCard) cards.
   • B- Opening foreign currency accounts for citizens to deposit the purchased currency, in accordance with Law No. (1) of 2005 concerning Banks and its amendments, and enabling them to use it as mentioned above, or transferring it to another account (individuals - legal entities).
   • C- Individuals and legal entities are allowed to purchase foreign currency held in citizens' foreign currency accounts allocated to them under this project and aggregate it without a specified limit within the Libyan banking sector, provided it is used for the purposes specified in this project in addition to transferring it via a rapid transfer procedure in foreign currency if available at the bank (Western Union – MoneyGram).

2. The commission charged by the bank for rapid transfers is limited according to the agreement with (Western Union – MoneyGram) companies, and the citizen shall not pay any additional fees or commissions.

Third: General Controls:

1. Adherence to and compliance with anti-money laundering and counter-terrorism financing controls stipulated in Circular No. N 2018/05 dated 13 June 2018.

2. Banks are obliged to exercise enhanced due diligence through the three lines of defense from the beginning of document submission to the counter staff, compliance department, internal audit, and committees formed in commercial banks for this purpose.

3. Emphasizing the role of compliance units in banks to verify the integrity of procedures related to amounts deposited in entities' accounts in exchange for requests to open standby letters of credit, in terms of their proportionality to their capital and the size of their activity.

4. Banks are obliged to exercise due diligence to verify the validity of international shipping documents via the International Maritime Bureau information network to reduce risks arising from some entities providing incorrect documents regarding the value of standby letters of credit exceeding (500) thousand US dollars or its equivalent.

5. Banks are obliged to complete the opening of standby letters of credit for goods and services specified in the license, commercial register, and the statutes of the entity requesting the opening of the standby letter of credit.

6. The entity requesting the opening of the standby letter of credit must provide a declaration agreeing to the publication by the Central Bank of Libya of the details of the standby letter of credit it will receive, and its commercial register data.

7. The bill of lading must include the ship's number (IMO) along with the name of the ship containing the goods, in addition to the letter of credit number and the initial invoice number.

8. When requesting reimbursement for documents presented on the standby letter of credit covered by the Central Bank of Libya, it is necessary to attach the bill of lading and the SWIFT message for opening the standby letter of credit, and the claim letter from the covering bank for the payment to be covered, with the documents submitted via the coverage system.

All circulars and periodic messages related to violations of this circular are repealed as of its date.

Therefore... you are requested to take what is necessary to implement the controls mentioned above, and all legal measures will be taken against anyone who violates the implementation of the controls and instructions issued by the Central Bank of Libya, specifically.

... And peace be upon you ...

Naji Muhammad Isa Director of Banking and Currency Supervision Department

Copies to: Mr. / The Governor Mr. / The Deputy Governor Mr. / Director of the Office of the Head of the Administrative Control Authority Mr. / Director of the Office of the Head of the Court of Audit Mr. / Deputy Minister of Economy Mr. / Deputy Minister of Labor and Rehabilitation Mr. / Director General of Customs Authority Mr. / Director of Accounts Department – Central Bank of Libya Mr. / Director of Legal Department – Central Bank of Libya Mr. / Director of Banking Operations Department – Central Bank of Libya Mr. / Director of Internal Audit Department – Central Bank of Libya Mr. / Director of Information Security Department – Central Bank of Libya Mr. / Director of Payments and Settlements Department – Central Bank of Libya Mr. / Director of the Libyan Credit Information Center – Central Bank of Libya Mr. / Director of the Libyan Financial Information Unit – Central Bank of Libya Mr. / Director of the Examples Unit – Central Bank of Libya Mr. / Deputy Director of Banking and Currency Supervision Department for Subscription Affairs and Violation Follow-up Mr. / Deputy Director of Banking and Currency Supervision Department for Legislation Affairs Mr. / Deputy Director of Banking and Currency Supervision Department for Islamic Banking Affairs Mr. / Deputy Director of Banking and Currency Supervision Department for Benghazi Banking Affairs Mr. / Heads of Compliance Units in Banks (for information) Mr. / Banking Service Quality Assurance Department

5

www.cbl.gov.ly - swift code :CBLJLYLX- +218 21 444 1488: Fax - +218 21 333 3591 : Phone