The Malta Independent 16 December 2019, Monday

Libyan war money: Government mum on seized dinars, says investigations ongoing

Neil Camilleri Sunday, 17 November 2019, 10:00 Last update: about 28 days ago

The Maltese government has so far refused to comment publicly on a huge cache of Libyan dinars that was destined to fund the siege on Tripoli, but which was intercepted at the Freeport.

The money was found stored inside two containers last week. It was reportedly destined for the forces commanded by General Khalifa Haftar, who has been laying siege to the Libyan capital since April.

It is understood that the unofficial currency was printed in a Russian mint. For some reason, the money – which is different to the official Libyan banknotes printed by British firm De La Rue – has not yet been declared illegal by the officially recognised Libyan government.

Foreign Minister Carmelo Abela was asked by PN MP Carmelo Mifsud Bonnici to state what the amount of cash found was, whether it was legal tender, whether a magisterial inquiry has been launched and whether there had been similar cases in the past.

In reply, Abela said that the investigations into the seizure are ongoing and it would not be prudent, or in the national interest, to reveal classified and sensitive details at this stage. He told the MP, however, that he had no problem in sharing the information he had privately with the MP.

According to a report published by the Middle East Institute, Libya has already received up to 10 billion dinars printed in Russia. The money has been unofficially printed and bears some notable differences to the official Libyan currency, but the Tripoli government, which is backed by Malta and the United Nations, has not yet declared it illegal.

The report, penned by Jonathan M. Winer, a former US special envoy to Libya, says the money is providing the opposition forces with another stream of revenue to keep up the fight against the UN-backed government.

The money, the report says, was destined for Haftar and his “collection of ex-Libyan army, militias, mercenaries and foreign forces he now calls the Libyan Arab Armed Forces.”

For a number of years, the salaries of eastern and western forces were paid by the Central Bank of Libya from the proceeds of Libyan oil exports. “Each side has also generated further revenues from other sources. These have included protection rackets, letter-of-credit abuses, smuggling of fuel and of people, and in the east, funds generated in part from commercial banks buying government ‘bonds’ issued by the eastern authorities.”

Winer says that the shipments of Russian-printed money reaching Libya has enabled the eastern factions to supplement their budgets and avoid having to enter into negotiations with the Tripoli government. “These funds are now also an essential means of funding Haftar’s war against Tripoli.”

The eastern authorities have acknowledged receiving at least 10 billion dinars from Russia since 2016. Another four shipments, totalling 4.5 billion dinars, reached Benghazi between February and June of this year, according to a Reuters report.

It is unclear whether these shipments passed through Malta. According to reports, Malta seized the cash in view of UN resolutions on Libya. “Yet to date, neither Libyan Prime Minister Fayez al-Sarraj nor Central Bank of Libya Governor Saddek el-Kaber have moved to actually declare the Russian currency illegal,” according to the Middle East Institute report.

The Malta seizure comes amid efforts – on the part of a number of countries – to bring the two warring sides together in Berlin. The report warns, however, that stopping countries delivering weapons to Libya is not enough if the two factions retain the ability to finance the conflict.

It says that, while the Tripoli government cannot stop the money shipments from coming in, it has other options, such as setting a date after which the Russian-printed currency would be made illegal.

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