Experts say management of Libya’s frozen funds does not comply with 2011 measures.
By Simon Marks
A U.N. panel of experts on Libya said Tuesday that Belgium is in violation of international sanctions targeting assets once owned by the late Libyan dictator Muammar Gaddafi.
The experts’ conclusions come after a POLITICO investigation earlier this year uncovered that tens of millions of euros in interest payments from Gaddafi’s frozen funds managed by Euroclear — a financial institution headquartered in Brussels — were still being paid out over recent years.
The money was channeled to mystery beneficiaries behind accounts managed by the Libyan Investment Authority (LIA), the country’s sovereign fund.
The U.N. experts spent months this year traveling across the world — including several trips to Belgium — to investigate whether the frozen funds are in compliance with the 2011 U.N. sanctions. These assets included the interest payments that made their way from Euroclear to accounts belonging to LIA.
“The Panel considers these payments of interest and other earnings to be in non-compliance with the asset freeze,” said the report, written by experts specializing in armed groups, financial transactions and shipping.
“Making the interest and other earnings freely available to the Libyan Investment Authority is in non-compliance with the sanctions regime.
Furthermore, considering the instability in the country, the disputes over the authority of the Libyan Investment Authority and the lack of an oversight mechanism, doing so could lead to the misuse and misappropriation of funds,” the panel added.
After Gaddafi’s death in 2011, the U.N. passed a resolution to freeze his wealth, with the idea that it would be held in trust for the Libyan people until the war-shattered country stabilizes.
It remains unclear what exactly has happened to the money flowing out from Belgium. The findings also potentially pit the U.N. against the EU, whose member countries determined in October 2011 that the sanctions were only applicable to the original frozen assets and not any interest earned after September 2011, when the sanctions first came into force.
A spokesperson for the Belgian finance ministry said Wednesday that the country planned to hold talks with financial experts and other EU countries on how to react to the panel’s findings. “A consultation will be organized with experts and the European partners that apply the sanctions in the same way that Belgium does,” the spokesperson said.
The ministry also said that all interest payments from Libyan funds managed by Euroclear are currently blocked after a decision by the Belgian judiciary on October 23 last year.
The LIA’s funds are locked in at least four bank accounts managed by Euroclear. By examining copies of Euroclear statements from 2013, POLITICO found that the frozen funds invested in shares before 2011 have risen in value to €14 billion.
Those stocks include holdings in big Italian companies such as the oil giant ENI, the bank Unicredit and the engineering company Finmeccanica, among others.
Part of the reason it is so difficult to work out where money from Belgium is going is due to a lack of clarity over who actually controls the LIA. For years, the institution has been at the center of a long-time dispute between rival chief executive officers.
Simon Marks – Reporter, joined POLITICO in September 2016 after having worked for three years in Brussels reporting for Market News International, The Guardian, Newsweek and Al Jazeera.