Financial Crime World

Title: New Anti-Money Laundering Law in Libyan Arab Jamahiriya: Penalties, Enforcement Measures, and Key Provisions

Introduction

The Libyan Arab Jamahiriya’s General People’s Congress passed a new anti-money laundering (AML) law, known as Law No. (2) of 2005 AD on Anti-Money Laundering, or the Money Laundering Prevention and Combating Act. This legislation strengthens the country’s AML framework by updating various key laws, including the Penal Code, the Code of Criminal Procedure, and economic regulations.

Definitions and Illegal Acts

The Act defines essential terms, such as “State,” “Central Bank,” “financial institutions,” and “money laundering.” Money laundering is any act intended to conceal the illicit origin of funds.

  • Money laundering refers to:
    • Concealing or disguising the true nature, origin, location, disposition, title, or ownership of funds or other property acquired from an illegal activity.
    • Attempting to engage or participating in such an activity.

Penalties for Money Laundering

Offenders face criminal liability and significant penalties, including:

  • Fines equal to the amount of laundered funds.
  • Confiscation of illicit property.

The involved institution faces fines twice the amount of laundered funds and confiscation of funds.

Crimes Associated With Money Laundering

The Act addresses penalties for crimes related to money laundering, such as non-reporting of suspicious transactions. Violations include:

  • Employees and superiors of financial and economic institutions:
    • Imprisonment and fines.
  • Violators of AML regulations:
    • Imprisonment and fines.

The Role of the Financial Information Unit (FIU)

The Libyan Central Bank’s Financial Information Unit (FIU) plays a pivotal role in implementing the new law, with responsibility for:

  • Exchanging information with foreign counterparts.
  • Managing suspicious transactions reported by financial institutions.

Reporting and Investigations

The Act mandates institutions and establishments under its jurisdiction to comply with AML regulations and report any suspected money laundering activities to the FIU. Authorities can freeze and seize funds suspected of being connected to money laundering:

  • Central Bank can freeze accounts for up to one month.
  • Investigating authorities can order a retention or seizure of funds or instrumentalities related to laundered funds.

Key Provisions

The Act also features critical components, including:

  • Setting a ceiling for bringing cash into the country.
  • Establishing AML subunits in banks.
  • Requiring banks to report suspicious transactions.
  • Emphasizing the importance of information confidentiality.
  • Encouraging international judicial cooperation.

Conclusion

The new Money Laundering Prevention and Combatting Act reinforces the Libyan Arab Jamahiriya’s commitment to combating money laundering and other financial crimes. The Act implements considerable penalties as a deterrent to potential offenders and sets a clear framework for enforcement agencies and financial institutions.