The European Union yesterday unfroze all funds and assets of the Central Bank of Libya and the Libyan Arab Foreign Bank, implementing a recent resolution passed by the UN’s Sanctions Committee. The EU said in a statement that it unfroze the funds “so as to support the recovery of the Libyan economy and assist the new Libyan authorities.”
However the EU said that it will still maintain, for the time being, a partial freeze on the Libyan Investment Authority (LIA) and Libya Africa Investment Portfolio.
Refraining from giving reasons for the partial freeze remaining in place, the EU said that funds frozen as of September 16 remain blocked.
EU sources yesterday told The Times Business that although LIA has substantial investments in Malta through its subsidiary LAFICO (Libyan Arab Foreign Investment Company), these should still not be directly affected by the partial freeze.
Last September, Malta had begun the necessary procedures to release millions of euros in Libyan frozen assets to the country’s National Transitional Council. However, negotiations had to be held with the new Libyan authorities and the go-ahead was needed by the sanctions committee of the UN and the EU.
Following the imposition of sanctions against Libya, Malta had frozen a total of €377 million in assets, including €86 million owned directly by members of the Gaddafi family.
According to sources, some of these funds were held in various accounts at Bank of Valletta and managed by a Maltese accountant from Mosta who also operates a company in Tripoli.
On its part, LAFICO (Libyan Arab Foreign Investment Company) which forms part of LIA has a number of investments in Malta including in the Corinthia Group and other hotels such The Vivaldi and Milano Due.
Its portfolio also includes minority shareholding in manufacturing industries such as Medelec Switchgear and services related companies like Medavia.
Through an agreement negotiated by Malta with the EU prior to the imposition of sanctions, these companies were not directly hit as they were only banned from paying dividends to their Libyan shareholders while continuing with their business.