Government of National Accord may gain access to Libyan sovereign wealth fund

The Libyan Ambassador to the UN, Ibrahim Dabbashi, wants the UN to approve a sanctions exemption for the Libyan sovereign wealth fund (LIA). The LIA was controlled by the Gadaffi family.

Dabbashi complained about ineffective management of the frozen assets. The sanctions were imposed to stop Gaddafi from escaping with Libya's wealth. Dabbashi said: “The LIA estimates that in 2014 alone, instead of increasing the value of its assets base, it had real losses of $721 million. Furthermore, it lost an additional $1.6 billion to $2.3 billion in what would have been returns on investment if its assets had been properly invested in conservative investments with competitive interest rates.” Dabbashi told Reuters the LIA has about $67 billion in assets. Dabbashi made it clear that his government would not use the assets, only try to ensure that they were better managed so as not to lose more money.

Dabbashi is ambassador to the UN for the House of Representatives (HoR). The UN now recognizes the new UN-brokered Government of National Accord (GNA) as the one legitimate government of Libya, not the previously recognized HoR. The UN is likely to grant an exception to the sanctions or lift them only when the GNA is up and running. The HoR has not yet approved or recognized the GNA. The UN is unlikely to change the sanction regulations until the GNA is in control..

The UN Security Council unanimously passed a resolution that extended sanctions against the country until July 31, 2017. The resolution asked that the GNA confirm to the Security Council committee that monitors sanctions, "as soon as it exercises sole and effective oversight over the National Oil Corportation, the Central Bank of Libya, and the Libyan Investment Authority." No doubt the UN will then give the government it recognizes, the GNA, an exception to sanctions, after it has gained control of the three key institutions including the LIA. Once the GNA control these three, finances for the rival HoR and GNC government will dry up and the GNA will have plenty of funds to buy off opposition.

The extended ban by the Security Counci also applies to crude oil shipment from Libyan territories controlled by institutions not related to the GNA. Resolution 2278 reads: "The Security Council… Condemns attempts to illicitly export crude oil from Libya, including by parallel institutions which are not acting under the authority of the Government of National Accord." The resolution asks the GNA to inform the international community if there is oil trade that is illicit so that action can be taken against oil smugglers. An official from the petroleum guards headed by Ibrahim Jodhran pledged loyalty to the GNA: "All the oil terminals under our jurisdiction have been placed under the authority of the unity government." Jodhran is an opponent of Haftar. No doubt his approval of the GNA may be opportunistic in that he wants to ensure that his export of oil is illegal. The move may infuriate Haftar.

There is silence from the media about what the reaction of the HoR is to recent events in Tripoli. The HoR has insisted that there be a vote on the GNA and an amendment to the constitutional declaration before the GNA is legitimate. There have been at least five meetings held by the HoR. This week, president of the HoR, Ageela Salah, now sanctioned by the EU, begged HoR members twice to attend so there would be a quorum. Not enough came for a quorum.

We may know Monday what will be happening. Already a tweet claims the the HoR will hand over power to a military tribunal: "Unconfirmed reports Buera - MP, longtime federalist, and #Libya HoR's lead UN negotiator - announced HoR will hand power to military council." If true this will be the end any GNA to rule all of Libya, Cyrenaica could split off. It would be interesting to see what Jhodran would do then. In the past he has himself worked for an autonomous eastern area.