The Official Spokesperson of Libya’s Customs Authority, Colonel Fahmi Al-Magouri, announced yesterday that officers at its Misrata Free Zone Customs Centre seized ten (40-foot) containers from Turkey filled with table salt, in violation of the letter of credit granted to it and allocated for the import of coffee beans.
Al-Magouri said the local company was granted an LC for US$ LD 2.39 million specifically to import coffee beans at the preferential exchange rate, but it imported table salt instead.
The Customs Authority affirmed its full commitment to combating smuggling and customs evasion, thereby ensuring the protection of the national economy and safeguarding national security.
A frequently used scam to smuggle money abroad
The illegal move by the offending company to open an LC for a higher value product only to import a lower value product is a common trick to transfer hard currency abroad. The LC is opened by local banks at a cheaper exchange rate than the higher rate offered on the black-market.
The move is a straightforward scam to smuggle currency abroad and has been successfully pulled off many times since the weakening of the Libyan state post the 2011 revolution.
Failure of control systems
However, in theory, the Central Bank of Libya was supposed to have put in place a system of controls to prevent this happening. Companies now have to provide quite a lot of data compared to before, before banks will open LCs for them.
.
CBL to investigate companies suspected of smuggling hard currency through LCs
https://www.libyaherald.com/2017/04/05/aca-claims-local-bank-involved-in-letters-of-credit-fraud
