Circular ARM N No. 23/2023

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

Reference: ARM N / 804 ( )
Circular ARM N No. (23 / 2023)
Date: 20 Muharram 1445 AH
Corresponding to: 07 August 2023

To the General Managers of Banks
Greetings,

Based on the provisions of Law No. (1) of 2005, concerning banks and its amendment, and on the supervisory and regulatory role exercised by the Central Bank of Libya in accordance with the provisions of the law. And with reference to Circular ARM N No. (2022/15) issued on 2022/12/19, regarding the controls regulating the procedures for opening documentary credits. And to Circular ARM N No. (2023/12) issued on 2023/02/26, regarding the amendment of some controls regulating the procedures for opening documentary credits.

We inform you that the Central Bank of Libya has recently observed, through its monitoring of documentary credit opening procedures, violations of the circulars and controls regulating the opening of documentary credits and the requirements for conducting due diligence to combat money laundering and terrorist financing, as well as a clear deficiency in exercising due diligence, non-compliance with applicable controls in this regard, and weak internal audit and control procedures in banks.

Therefore, you are requested to form a specialized committee to study documentary credit opening requests, comprising members from the Internal Audit Department, Compliance, the department specialized in foreign operations, and other relevant departments. All requests for prior approval to open documentary credits through bank branches shall be referred to this committee, according to a form prepared by the bank for this purpose. The committee shall exercise its powers according to a clear and swift mechanism that does not hinder the process of opening documentary credits. One of its primary responsibilities shall be to verify the fulfillment of all conditions and controls regulating documentary credit opening procedures. The specialized committee shall issue a certificate stating that it has studied the file of the entity applying for the credit, and that it complies with and fulfills all conditions and controls, and there is no impediment to opening the credit, according to meeting minutes prepared by the committee and approved by its members. The committee shall retain a copy of its minutes and the certificate issued in this regard. A copy of the committee's minutes, after ensuring the soundness of the procedures, shall be forwarded to the Central Bank of Libya via the coverage system prepared for this purpose when submitting a request to obtain approval from the Accounts Department of the Central Bank of Libya for coverage.

And peace be upon you....

Naji Mohammed Issa
Director of Banking and Monetary Supervision Department

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Copy to//

• Mr./ Governor
• Mr./ Undersecretary of the Ministry of Economy
• Mr./ Director of Audit 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./ Deputy Director of Banking and Monetary Supervision Department
  • for Desk Supervision and Compliance Monitoring Affairs
• To Mr./ Deputy Director of Banking and Monetary Supervision Department for Inspection Affairs
• To Mr./ Deputy Director of Banking and Monetary Supervision Department for Islamic Banking Affairs
• To Messrs./ Banking Supervision - Benghazi
• To Messrs./ Heads of Compliance Units in Banks "for follow-up"
• Banking Follow-up and Compliance Monitoring Section

C.M./ Follow-up / 07 August 2023

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