Libya’s Anti-Money Laundering Law No. (2) of 2005: Defining and Criminalizing Money Laundering
In 2005, Libya’s General People’s Congress passed Law No. (2) of 2005 on anti-money laundering in execution of the resolutions issued by the Basic People’s Congresses. In this article, we outline the key components of this law.
Article 1: Definitions
- Definitions: This article defines several crucial terms and expressions, including the State, Central Bank, Governor, Committee, Unit, illicit property, freeze or seizure, confiscation, and instrumentalities. It also specifies the meaning of financial institutions and other financial, commercial, and economic institutions.
Money Laundering
Article 2: Money laundering is the appropriation, possession, use, exploitation, disposal, or concealment of illicit property with the intention of disguising its illegal origin. It also covers the disguise of the true nature of illicit property and any form of complicity in these acts. Funds are considered illicit when obtained through a crime, including those stipulated by relevant international conventions.
Criminal Liability of Institutions
Article 3: Financial, commercial, and economic institutions are held accountable for money laundering, regardless of whether the crime was committed in their names or for their account. These institutions face penalties as outlined in Article 4.
Money Laundering Penalties
Article 4: Penalties for money laundering include imprisonment, fines equal to the amount of money involved, and confiscation of the funds. Penalties for accessories to money laundering vary based on their level of involvement and the harshness of the underlying crime. Institions committing or facilitating money laundering crimes face stricter penalties, including license withdrawal and closure.
Penalties for Crimes Associated with Money Laundering
Article 5: Those who fail to report suspected money laundering activities or disclose false information face penalties, including imprisonment and substantial fines.
Exemption from Penalty
Article 6: Individuals who report money laundering activities prior to their detection are exempted from punishment.
Freeze, Retention, and Seizure
Article 7: The Central Bank Governor has the power to freeze accounts suspected of money laundering for up to one month. The Director of the competent prosecution can order the retention of accounts, funds, or instrumentalities for up to three months. Judicial courts can order the provisional attachment of such assets for the same duration.
Declaring the Origin of Funds Entering the State
Article 8: The Central Bank sets a limit on the amount of cash that can enter the country without declaring its origin. Any excess must be declared under the established declaration system.
Financial Information Unit
Article 9: A Financial Information Unit is established within the Central Bank to handle money laundering operations. Concerned financial, commercial, and economic institutions are required to report suspicious transactions to this unit.
- Financial Information Unit: The Unit may share information and cooperate with their foreign counterparts, as per international conventions or on a reciprocal basis. Each bank operating in the country must also establish an Anti-Money Laundering Information Subunit to monitor and report any suspicious transactions to the Financial Information Unit.
Role of the Financial Information Unit
Once the Financial Information Unit receives a referred or reported case, it assesses the information and notifies the governor of any necessary actions.
National Anti-Money Laundering Committee
Article 11: The National Anti-Money Laundering Committee is established with the governor of the Central Bank serving as the chairperson and representatives from various ministries and entities as members. The purpose of the committee is to propose regulations and procedures, facilitate information exchange, draft the internal regulation that governs its work, and represent the State in international forums.
Competences of the Committee
The National Anti-Money Laundering Committee is tasked with proposing anti-money laundering regulations, facilitating inter-agency coordination, and representing the State in international forums. The committee also determines the reporting template for suspicious transactions and any other competence delegated by the Central Bank.
Establishing Anti-Money Laundering Mechanisms
Entities responsible for licensing or authorizing financial, commercial, and economic institutions and those entrusted with their control and inspection are required to establish appropriate anti-money laundering mechanisms and report any suspected cases to the Financial Information Unit.
Confidentiality of Information
Article 14: All entities must maintain confidentiality when handling information related to money laundering investigations, legal actions, and lawsuits.
Anti-Money Laundering Judicial Cooperation with Other Countries
Article 15: The Public Prosecutor has the power to track, freeze, or retain proceeds generated by money laundering crimes or their instrumentalities based on requests from foreign judicial entities. Confiscation orders issued by foreign courts can be acknowledged under the same conditions.
Executive Regulation and Publications
The executive regulation of this law is issued by the General People’s Committee based on the proposals of the National Anti-Money Laundering Committee and the governor of the Central Bank. The Central Bank Governor is responsible for issuing any necessary publications and directives related to the implementation of the law.
Entry into Force
Law No. (2) of 2005 on anti-money laundering entered into force on its date of issuance and is published in the Legal Register and various media outlets.