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How the West is stealing millions from people in Libya

This article is over 4 years, 11 months old
Simon Basketter looks at what the news that Britain is receiving cash from frozen assets shows about imperialism
Issue 2662
Theres heaps of cash squirreled away by the rich
There’s heaps of cash squirreled away by the rich

As the regime of Muammar Gaddafi in Libya collapsed in 2011, the question of money exercised the global elite.

There were rumours of diamonds and gold bullion buried across the African continent. The truth involved money buried in banks and offshore scams.

Gaddafi used the country’s oil wealth as a giant slush fund to pursue vanity projects and build Libya’s influence.

That the West opposed, backed, then opposed the regime meant that much of this money drifted through the global financial system.

The oil industry and Western imperialism decided the pace of events.

From 2007 Britain courted Libya, so money flowed to British companies, banks and colleges.

That created trouble when alliances shifted. The British state rushed to turn allies into enemies and vice versa.

The spooks whisked Moussa Koussa, Libya’s torturer-in-chief, out of the country for a BBC interview.

In February 2011 the United Nations (UN) Security Council passed an asset freeze on the regime that would apparently benefit the population.

The US trapped about £30 billion of Libyan assets. Britain grabbed £11 billion.

The British state considers what happens to frozen assets to be secret.

But last month it admitted, “HMRC receives payments of tax from a small proportion of the entities designated under the Libyan regime.

“Around £17 million has been received since the start of the 2016–17 tax year. HMRC receives around £5 million each year.”


The media noticed only the response from Northern Ireland’s DUP party, which demanded that the money went to victims of the IRA.

Britain isn’t rushing to pay any relatives of those killed in the Troubles, especially by British soldiers or the death squads it backed.

While the state takes a cut, the frozen funds are generating tens of millions in interest for mystery beneficiaries.

Some £13 billion of the Libyan dictator’s assets held in Belgium have big, regular outflows of stock dividends, bond income and interest payments.

It is almost certainly true that the funds go elsewhere. The interest goes to accounts belonging to the Libyan Investment Authority (LIA), founded in 2006 to invest Gaddafi’s oil wealth.

It’s not clear who runs the LIA or gets any of the funds.

Civil war means Libya is governed by rival factions. US president Donald Trump talked to a leader of a non-UN backed faction last month, creating panic.

There are two competing LIA chairs in Tripoli. UN sanctions targeted assets of the Gaddafi regime, including about £60 billion of LIA’s assets, primarily invested with banks and fund managers across Europe and North America.

However new money that goes to the LIA is apparently not subject to the freeze.

Under Gaddafi, LIA bought assets in strategic firms, especially in Italy and Britain.

These included carmaker Fiat, football club Juventus, Royal Bank of Scotland and Pearson, the then publisher of the Financial Times newspaper.

LIA funds are locked in accounts managed by Euroclear, in Brussels.

In 2013 some £600 million went from the combined frozen assets around the world to the LIA. It’s not clear who’s getting the interests from the billions.

Euroclear documents show funds from these accounts were “released” to an HSBC account in Luxembourg belonging to LIA and to several other LIA accounts at the Arab Banking Corporation, in Bahrain.

No one is really saying who can access the LIA accounts. But the LIA fought an unsuccessful court battle with Goldman Sachs and agreed a £900 million settlement with Societe Generale.

What is clear is that not one penny of the money has gone to the Libyan people it was stolen from.

The asset freeze was lifted on Moussa Koussa in 2012, who now lives in Qatar.

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