Central Bank of Libya Decision No. 1 of 2013 on Regulating Foreign Currency Transactions and Defining Authorities for Executing External Transfers

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

Reference: 1 M from /804
Circular No. (2013/1)
Date: 21 Muharram 1434 AH
Corresponding to: 02 January 2013 AD

To: General Managers of Commercial Banks
To: Heads of Interim Administrative Committees of Commercial Banks To: General Manager - Libyan Foreign Bank To: General Manager - Sarqah and Financial Services Company

In the name of Allah, the Most Gracious, the Most Merciful

Following the provisions of Law No. (1) of 2005 concerning Banks, and its amendments.

With reference to Circular No. (2002/6) issued on 10/02/2002, concerning the regulations governing external remittance investments.

With reference to Circular No. (2007/12) and Circular No. (2012/7) concerning the policy on combating money laundering and terrorist financing and due diligence towards customers.

With reference to Circular No. (2008/3) issued on 16/01/2008, concerning the regulations governing the execution of external remittances for residents and non-residents.

With reference to our periodic letter No. (2011/178) dated 22/11/2011, concerning regulations on the sale of foreign currency to the public, and our periodic letter No. (2011/190) dated 06/12/2011, concerning the regulation of foreign currency sales to citizens.

With reference to our periodic letter No. (2012/76) dated 12/03/2012, concerning the raising of the cap on foreign currency sales for personal purposes.

With reference to Circular No. (2012/10) issued on 28/03/2012, concerning the regulations governing the settlement of documents received with collection fees.

With reference to Circular No. (2012/16) issued on 03/07/2012, through which Decision No. (7) of 2012 of the Board of Directors of the Central Bank of Libya concerning Free Remittances was referred.

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With reference to Circular No. (2012/17) issued on 07/08/2012, concerning the suspension of external remittances for commercial and investment purposes in financing the import of raw materials and operational supplies for industrial entities.

With reference to Circular No. (2012/19) issued on 13/11/2012, concerning the regulation of direct external remittances for industrial purposes.

And in order to achieve stability in the foreign exchange market, ensure the facilitation of banking services and accelerate their pace, enable banks to perform their full duties, and achieve the public interest.

We inform you of the issuance of Decision No. (1) of 2013 of the Governor of the Central Bank of Libya concerning the regulation of dealing in foreign currency and defining the authorities for executing external transfers for various purposes.

If the Decision of the Governor of the Central Bank of Libya No. (1) of 2013, referred to above, reaches you, then execution is requested in accordance with its contents, and the matter of execution is to be placed under implementation, and commitment to refer a statistical statement to the Banking and Currency Supervision Department, regarding the transactions executed for various purposes covered by the Decision.

Dr. Mohamed Abdeljalil Abousnina
Director of Banking and Currency Supervision Department

Copy to: Mr. / The Governor
Copy to: Mr. / The Deputy Governor
Copy to: Mr. / The Deputy Auditor General
Copy to: Mr. / The Deputy Minister of Economy
Copy to: Mr. / The Deputy Minister of Finance
Copy to: Mr. / The Deputy Minister of Industry Copy to: Mr. / The General Director of Customs Authority Copy to: Mr. / The President of the Union of Chambers of Commerce and Industry Copy to: Mr. / The Director of Central Banking Operations Sector - Central Bank of Libya Copy to: Mr. / The Director of Competitions Department - Central Bank of Libya Copy to: Mr. / The Director of Audit Department - Central Bank of Libya Copy to: Mr. / The Director of Research and Statistics Department - Central Bank of Libya Copy to: Mr. / The Director of Legal Affairs Department - Central Bank of Libya Copy to: Mr. / The Director of Banking Operations Department - Central Bank of Libya Copy to: Mr. / The Director of Reserves Department - Central Bank of Libya Copy to: Messrs / Directors of Central Bank of Libya Branches (Benghazi, Sabha, Sirte)

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Central Bank of Libya
Banking and Currency Supervision Department
Director's Office
2013 - 01- 02
Received No. Renewal / 24

Decision of the Governor of the Central Bank of Libya No. (1) of 2013 Concerning the Regulation of Dealing in Foreign Currency and Defining Authorities for Executing External Transfers for Various Purposes

The Governor

• Having reviewed Law No. (1) of 2005 concerning Banks, as amended by Law No. (46)
  of 2012, issued by the National Transitional Council.
• And the administrative organization of the Central Bank of Libya regarding its service status.
• And the memorandum of the Supervision Department regarding currency and collection from commercial banks.
• Regarding the authorities to execute external transfers for personal "non-commercial" purposes.
• And what the Crisis Management Committee specialized in combating the deterioration of the situation in commercial banks concluded in its meeting held on 26/12/2012.
• And after taking the opinion of the Deputy Governor.

Decided

Article (1)
Commercial banks are transferred the authority to approve the execution of external transfers for public legal entities, in exchange for settling obligations related to the supply of services from abroad, including technical support fees, technical assistance and consulting fees, training fees, membership fees in international bodies and subscriptions to scientific and regional organizations, fees for subscribing to conferences and scientific forums, books and scientific journals, insurance services, maintenance fees and related services, and other services supplied from abroad. Banks are also transferred the authority to execute external transfers related to their activity and necessary to facilitate their operations. Banks must comply with the following controls when executing transfers for public legal entities:
-1 The public entity must manage an account with the designated bank, and the transfer must be a debit from the account.
-2 Submission of approval from the relevant Minister for public administrative units and public sector companies.
-3 The maximum limit allowed to be transferred, per single remittance, is one hundred thousand dollars ($100,000.00) or its equivalent in other currencies.
-4 The transfer request is submitted to the bank via a message issued by the entity, signed by authorized signatories, containing the amount to be transferred, the beneficiary entity, and the bank account number of the beneficiary abroad.

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-5 The original invoices (bills) and documents indicating the purpose of the transfer must be attached to the request. The invoices must be signed by authorized persons in the requesting entity, and the invoices must be recent and valid. -6 If the transfer is for settling services provided under contracts or agreements, the original contract or agreement specifically referenced must be attached to the request, and it must meet the requirements according to prevailing legislation. -7 The entity is committed to submitting a request for an external remittance according to Form No. (2008/3) in Circular No. (2008/3). -8 The value of the requested remittance must be covered at 100% by debiting the entity's bank account. -9 If the amount to be transferred exceeds one hundred thousand dollars ($100,000.00) or its equivalent in foreign currencies, the bank is committed to opening a documentary credit for the requested purpose, according to established banking practice in this regard.

Article (2)
Commercial banks are granted the authority to execute external transfers for the purpose of financing the import of agricultural supplies and equipment, computer information supplies and equipment, medicines and medical supplies, for commercial purposes submitted by specialized companies in these fields, according to the following conditions:
.1 The transfer request is submitted according to Form No. (2008/3) attached to Circular No. (2008/3). The transfer request must be accompanied by a commercial invoice (bill) specifying the prices, types of goods, and quantities to be supplied. These invoices must be supported by the local supplying company. .2 The remittance is covered at 100% in Libyan Dinars, debited from the account managed by the entity with the designated bank. .3 The supplying entity is committed to providing the activity license issued by the Ministry of Economy and the statistical code card issued by the Customs Authority as part of the documents required to be submitted to the bank, and they must be valid on the date of submitting the external remittance request. .4 Banks are committed to the cap specified for these remittances, not exceeding one hundred thousand dollars ($100,000.00) per single remittance at a time, and not exceeding two hundred and fifty thousand dollars ($250,000.00) per year. If the value to be transferred exceeds the maximum allowed limit for the case, the entity is directed to open a documentary credit for the supply of the required goods, according to accepted banking procedures.

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.5 The supplying entity is committed to providing the customs declaration indicating the supply of the required equipment and goods within the period specified by instructions issued by the Central Bank of Libya. These entities must provide a notarized undertaking. The sender is committed to supplying the goods to Libya and providing the customs declaration indicating this within the specified time. Banks must observe any instructions issued by the Central Bank of Libya or any other competent authorities, which may be issued regarding the suspension of banking transactions for that entity.

Article (3)
Commercial banks are granted the authority to decide on requests for purchasing and transferring foreign currency for personal purposes for natural persons according to the following:

• The maximum limit allowed to be transferred for one person is fifteen thousand dollars ($15,000.00) or its equivalent in foreign currencies, for various purposes, provided that the transfer request manages a bank account with the designated bank, and that at least six months have passed since their dealings with the bank on the date of submitting the request.
• The transfer request is submitted with documents indicating the purpose of the transfer (invoices or bills), which must be recent and valid, and include the date of submitting the request, and cover purposes such as private treatment, studying abroad, fees for subscribing to conferences and international bodies, scientific journals, Hajj and Umrah purposes, and settling obligations abroad.
• It is required that the beneficiary entity has a specified address, and that the transfer is to the private bank account of the beneficiary abroad.
• The transfer request is submitted using Form No. (2002/2) amended and attached to Circular (2002/6), and the coverage of the requested remittance is 100% by debit from the transfer applicant's bank account.

Article (4)
The Banking and Currency Supervision Department is granted the authority to decide on requests for purchasing and transferring foreign currency submitted by private legal entities, according to the following controls:

• The maximum limit allowed to be transferred for remittances to private legal entities, for various purposes (excluding the import of goods for commercial purposes), to settle obligations related to their activity and in exchange for supplying services from abroad or settling the value of operational supplies or subscription fees abroad, or providing services to Libyans abroad, is one hundred thousand dollars ($100,000.0) per single case or group of remittances in the year.

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• If the amount to be transferred exceeds one hundred thousand dollars ($100,000.00), the entity is required to open a documentary credit through the bank that holds the banking procedures related to it.
• It is required for banks to execute this type of remittance that the entity manages a bank account, and that at least six months have passed since their dealings with the bank.
• The transfer request is submitted through the bank that holds the current account of the requesting entity, using the approved form, and the requests submitted with the transfer request and documents (invoices) indicating the purpose of the transfer, its value, and the account of the beneficiary abroad must be attached.
• It is required that the entity has banking documents with a bank abroad and a clear account address.
• Its data is submitted in the transfer request.
• The bank executing the remittance is committed, after approval is issued, to the controls governing the approved organizational policies, and due diligence towards customers according to instructions issued by the Central Bank of Libya No. (2007/12) and Circular No. (2012/7) concerning the policy on combating money laundering and terrorist financing and due diligence towards customers.
• The entity making the transfer is committed to delivering the customs declaration to the bank, in the case of transferring for operational supplies, within the specified times, according to instructions issued by the Central Bank of Libya. These entities must commit to providing a notarized undertaking to deliver the customs declaration. Banks must observe any instructions issued by the Central Bank of Libya, or any other competent authorities, regarding the enforcement of banking transactions for these entities, if any.

Article (5)
.1 The cap on the sale of foreign currency via prepaid cards, or by debit from the current account, issued by Libyan banks is raised to fifteen thousand dollars ($15,000.00).
.2 All banks are requested to strengthen documents with collection fees submitted to commercial banks for payment via correspondents, with a SWIFT message issued by the correspondent bank, confirming the sending of documents.

Article (6)
This Decision is effective from the date of its issuance, and the Banking and Currency Supervision Department is to place it under implementation.

Al-Sheeq Omar Al-Kabeer
Governor

Issued on 1/1/2013 AD

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