Title: New Legal Framework Bolsters Libya’s Fight Against Money Laundering and Financial Crimes
Background
In a significant move towards strengthening its anti-money laundering (AML) and financial crime prevention measures, the General People’s Congress (GPC) in Libya passed Law No. (2) of 2005 on the Prevention of Money Laundering and Combating the Financing of Terrorism, also known as the Anti-Money Laundering Law.
This legislation was enacted following a review of various laws and regulations, including the Penal Code, Code of Criminal Procedure, Commercial Code, and other relevant laws. The new law builds upon Libya’s existing legal framework and supplements existing legislation, like Law No. (1) of 1373 FDP on banks and Law No. (5) of 1426 on the promotion of investment of foreign capital.
Key Provisions and Definitions
The law begins with a comprehensive definition section, which sets forth the foundation of the law by defining important terms such as:
- Illicit property
- Freeze or seizure
- Instrumentalities
- Financial institutions
Penalties for Money Laundering
Article 2 of the law makes it clear that any person who commits an act of money laundering by appropriating, possessing, or concealing illicit property, or disguising its true nature, shall be penalized. The law applies to any funds acquired through a criminal offense, including those outlined in international conventions and the UN Conventions against Transnational Organized Crime and Corruption.
Financial Institutions’ Liability
Article 3 holds financial, commercial, and economic institutions financially and criminally liable for money laundering, regardless of whether the crime was committed on their behalf or using their names. Penalties include imprisonment, a fine equal to the amount of money involved, and confiscation of the illicit funds, as well as more severe penalties for institutions with repeat offenses.
Reporting Suspicious Transactions
To tackle money laundering operations, a Financial Information Unit (FIU) will be established within the Central Bank. All financial, commercial, and economic institutions are required to report any suspicious transactions to the FIU. The FIU can then share information with its counterparts in other countries as per international conventions or reciprocity agreements.
Banks’ Anti-Money Laundering Units
Banks are mandated to establish their own anti-money laundering subunits to monitor transactions and report any suspicious activity to the Financial Information Unit.
Effective Date and Confidentiality
The new regulations will enter into force upon their issuance, and the General People’s Congress emphasized the importance of adhering to the confidentiality of any information acquired during the implementation of these regulations.
Conclusion
This law is an essential part of Libya’s ongoing efforts to prevent money laundering and financial crimes, and the GPC will provide relevant publications and directives to ensure its proper implementation.