Circular 19/2012 on Direct Foreign Remittances for Industrial Purposes

Central Bank of Libya
P.O. Box 1103 | Telegram Address: Libyabank - Tripoli - Libya

Notice: CBLN/804
Referenced Circular No. (2012/19)
Date: 28 Dhu al-Hijjah
Corresponding to: November 13, 2012

To: Exporters of Commercial Banks
To: Heads of Temporary Administrative Committees for Commercial Banks To: General Manager - Libyan External Bank

In the name of Allah, the Most Gracious, the Most Merciful...
Subject: Direct Foreign Remittances for Industrial Purposes

In implementation of the provisions of Law No. (1) of 2005 on Banks, and its amendments, and with reference to Circular (2012/17) issued on 07/08/2012 regarding the cancellation of Circular No. (2012/9) issued on 28/03/2012, through which commercial banks were authorized to execute direct foreign remittances for commercial purposes.

Following the findings of the specialized committee on crisis management and monitoring liquidity in commercial banks, formed by the Governor's decision No. (57) of 2011 at its meeting on 24/09/2012, regarding addressing the problems facing various entities in the economic sector, thereby enhancing trust in bank operations, maintaining exchange rate stability, and improving the purchasing power of the Libyan Dinar.

Based on the approval of the Governor of the Central Bank of Libya, we inform you that commercial banks are now prohibited from resuming direct foreign remittances for industrial purposes, subject to the following controls:

First: Commercial banks are prohibited from executing requests submitted by industrial companies operating in Libya for supplying raw materials, operational supplies, and spare parts using direct foreign remittances, within a limit of (10%) of the value of annual letters of credit opened by each company at the bank, in a single lump sum or installments.

This is subject to the following conditions and controls:

1- Regarding requests for operational supplies, spare parts, and raw materials, the company must provide proof that it is an industrial company, based on the license issued by the Ministry of Economy, and this license must be valid and registered in the commercial register on this basis.

2- It is required that the industrial company manages a current account at the bank, and that its dealings with banks have lasted for at least two years, and that the account has been active during that period.

Second: General Controls:

1- The supplying company must submit customs declarations indicating the entry of supplied materials via foreign remittances within the period specified by instructions issued by the Central Bank of Libya.

2- The supplying entities must submit the statistical code card issued by Customs, among the documents required to be presented to the bank, which must be valid at the time of requesting direct foreign remittances.

3- Banks are committed to processing concerned companies by completing the implemented KYC (Know Your Customer) forms per Circular No. (2007/12) issued on 27/02/2007, when processing any transactions requested by the supplying entity, according to forms approved by the Central Bank of Libya.

4- Banks are committed to exercising due diligence regarding requests submitted for executing direct foreign remittances, or opening letters of credit, or accepting and paying collection documents, in accordance with the provisions of Circular No. (2012/7) issued on 19/02/2012, regarding anti-money laundering and counter-terrorism financing policies and due diligence towards customers, including:

• Account opening procedures.

• Procedures for funding accounts with Libyan Dinar.

• Requesting a remittance, letter of credit, or paying document values.

• Examining documents submitted for settling foreign remittances, shipping documents related to letters of credit, and collection charge documents.

• Criminal and civil liability applies to anyone submitting forged or fabricated documents, or incorrect data, related to banking transactions including direct foreign remittances.

• Banks are committed to submitting a weekly statement of executed direct foreign remittances for industrial and commercial purposes to the Banking Supervision Department, including the name of the executing company, the purpose of the transfer, the amount transferred directly, the bank account number, and the branch holding this account, with these data provided on a compact disc (CD), according to the relevant tracking procedure.

Peace, mercy, and blessings of Allah be upon you.

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

Copies to:
His Excellency the Governor
His Excellency the Deputy Governor
His Excellency the Undersecretary of the Ministry of Economy His Excellency the Undersecretary of the Ministry of Finance His Excellency the Minister of Industry His Excellency the President of the Accountants Council His Excellency the Director General of Customs His Excellency the Deputy Director of Banking and Currency Supervision Department His Excellency the Director of Accounts Department - Central Bank of Libya His Excellency the Director of Legal Affairs Department - Central Bank of Libya His Excellency the Branch Managers of the Central Bank of Libya (Benghazi - Sabha - Tarhuna) The Banking Committee and Compliance Monitoring

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