During its second periodic meeting—attended by representatives from the Central Bank of Libya, the Customs and Tax Authorities, and the Municipal Guard—the committee appointed under Administrative Control Authority (ACA) Decision No. 68 of 2026 discussed oversight reports revealing the manipulation of documentary credits (LC fraud) and its impact on exchange rates.
The high summit meeting's reports also highlighted low tax collection on imports (which did not exceed 3 billion dinars) and identified companies that were either unregistered or had failed to settle their status.
The committee adopted a series of firm measures to safeguard the national economy. These included identifying unregistered companies, blacklisting those that failed to settle their status, and accelerating the launch of a unified electronic system to link relevant entities for tracking the movement of goods and financial coverage.
Additionally, the committee resolved to coordinate with the Ministries of Economy and Industry to establish reference prices for commodities and tasked the Municipal Guard with intensifying field inspections to regulate food and pharmaceutical markets.
LC fraud
It will be recalled that since the 2011 revolution and the onset of weak Libyan state institutions, Libya has experienced a huge increase in Letters of Credit (LC) fraud. There are at least two main ways in which LC fraud is transacted.
First, there is the case where companies, who are granted LCs at the official and lowest foreign exchange rate in Libya through their bank, either import lower valued goods than is quoted in their proforma invoice and keep the balance of the money out of Libya, or they repatriate the difference and sell it on Libya’s black-market foreign exchange.
The other even more fraudulent technique is that companies open a large one-off LC in the millions in hard currency and never import any goods into Libya. The owner/owners of such a company are happy to migrate and not return to Libya to face the law.
Companies are supposed to present a letter from the customs authority proving that they had imported the goods they presented in their proforma invoice when opening an LC.
However, as the need for the use of secure paper indicates, companies had started to issue forged Customs Authority letters supposing that they had indeed imported goods.
85 companies suspended for US$ 130 million LC fraud
In February this year, for example, the Tripoli based Ministry of Economy and Trade requested that the Central Bank of Libya (CBL) suspend 85 import companies for failing to import any cooking oil with the US$ 130 million worth of letters of credit they were granted in 2025
11 companies referred for LC fraud
In another example, in January this year, the Customs Authority announced the detection of 11 companies that obtained Letters of Credit at the official (and lower) exchange rate without importing any goods.
Investigations showed that US$ 54 million was transferred to foreign beneficiaries without actual imports.
The Customs Authority said legal procedures have been completed, and the case has been referred to the Public Prosecutor’s Office. The Customs Authority reaffirmed its commitment to combating financial corruption and protecting public funds and the national economy.
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