Law No. (2) of 2005 on anti-money laundering

 

Law No. (2) of 1373 FPD/2005 AD on anti-money laundering

The General People’s Congress

  • In execution of the resolutions issued by the Basic People’s Congresses in their general annual meeting of 1373 FDP;
  • Upon review of the Penal Code and the Code of Criminal Procedure and the supplementary laws thereof;
  • The Commercial Code and the supplementary laws thereof;
  • Law No. (9) of 1992 on the exercise of economic activities and the amendments thereof;
  • Law No. (5) of 1426 on promotion of investment of foreign capital and the amendments thereof;
  • Law No. (1) of 1373 FDP on banks;

formulated the following law:

Article (1)

Definitions

For the purpose of implementation of this law, the following terms and expressions shall have the indicated meaning ascribed to them, unless the context indicates otherwise:

State: The Great Socialist People's Libyan Arab Jamahiriya.

Central Bank: The Central Bank of Libya.

Governor: The governor of the Central Bank of Libya.

Committee: The National Anti-Money Laundering Committee.

Unit: The Financial Information Unit of the Central Bank of Libya.

Illicit property: Movable or immovable, material or moral property appropriated through a crime, whether directly or indirectly, including the documents proving the appropriation of such funds or any right related thereto.

Freeze or seizure: Temporary ban imposed by the competent entity on the movement, transfer, disposal, or use of funds.

Confiscation: Permanent deprivation of the funds by order of the competent court.

Instrumentalities: Any means used or intended for use in any way in the commission of any crime stipulated by this law.

Financial institutions: Any bank, finance company, financial market, bureau de change, financial or monetary intermediary, or any other establishment licensed by the Central Bank.

Other financial, commercial, and economic institutions: Establishments licensed by entities other than the Central Bank such as insurance companies, service bureaus, etc.

Article (2)

Money Laundering

  1. Any person who commits any of the following acts shall be considered a perpetrator of a money laundering crime:

-        Appropriation, possession, use, exploitation, disposal of any type, transfer, transport, deposit, or concealment of illicit property with the intention of disguising their illicit origin.

-        Disguise of the true nature of illicit property; concealment of their location, manner of disposal, movement, or the rights pertaining to their ownership or possession.

-        Any form of complicity in the aforementioned acts.

  1. Funds shall be considered illicit when appropriated through a crime, including those set forth by the UN Convention against Transnational Organised Crime and its annexed protocols, the UN Convention against Corruption, and other relevant international conventions to which the State is party.

Article (3)

Criminal Liability of Institutions

Without prejudice to non-criminal penalties stipulated by any other law, the financial, commercial, and economic institutions in the State shall be criminally liable for money laundering, whether such crime is committed in their names or for their account. They shall be subject to the penalties stipulated by Article (4), Clause (2) of this law.

Article (4)

Money Laundering Penalties

  1. Without prejudice to the penalties stipulated by the Penal Code or any other law for crimes generating illicit property, the money laundering crime set forth by Article (2), Clause (1), shall be punished by imprisonment and a fine equalling the amount of money object of the crime, in addition to the confiscation of the funds.

If the offender is an accessory to the crime through which the funds are appropriated, whether as a perpetrator or accomplice, he shall incur the penalty of the crime with the harsher description, increased to one-third.

If the offender is aware that the funds are generated by a crime punished by a harsher penalty, but is not an accessory thereto, he shall incur the penalty stipulated for such crime.

  1. The institution in the name or for the account of which the crime is committed shall be punished by a fine equalling twice the amount of money object of the crime and the confiscation of the funds. In the event of recidivism, such institution shall be punished by license withdrawal and closure in addition to the foregoing penalties.

Article (5)

Penalties of Crimes Associated with Money Laundering

  1. Any superior or employee of a financial, commercial, or economic institution who is aware of a conduct associated with money laundering in his institution but refrains from reporting such conduct to the competent entity shall be punished by imprisonment and a fine ranging between one thousand and ten thousand LYD, or by either penalty.
  2. Whoever informs a person that his transaction is under review or investigation by the competent entities for suspected illegality shall be punished by imprisonment and a fine ranging between five hundred and ten thousand LYD, or by either penalty.
  3. Whoever violates the provisions of Article (8) of this law shall be punished by a fine ranging between five hundred and ten thousand LYD. The property object of such violation shall be retained until their release by order of the Public Prosecution, unless they are proven to be associated with another crime.
  4. Whoever reports a money laundering crime to the competent authorities in bad faith and with the intention of causing harm to others shall be punished by imprisonment for a minimum period of one year with the possibility of taking any criminal procedure to uncover the truth, even if reporting is anonymous or done under a fake name.
  5. Whoever violates another provision of this law or of the regulations, resolutions, or publications issued in virtue thereof shall be punished by imprisonment and a fine ranging between five hundred and ten thousand LYD.

Article (6)

Exemption from Penalty

Whoever reports a money laundering crime before its detection by the competent entities shall be exempted from punishment.

Article (7)

Freeze, Retention, and Seizure

  1. The governor of the Central Bank of Libya may freeze the accounts suspected of being connected to money laundering for a maximum period of one month.
  2. The director of the competent prosecution may order the retention of accounts, funds, or instrumentalities suspected of being connected to money laundering. The duration of provisional attachment conducted in accordance with this clause shall not exceed three months.
  3. The court to which the criminal action is referred for the crime falling under its jurisdiction may order the provisional attachment of accounts, funds, or instrumentalities suspected of being associated with money laundering, provided that the attachment effected in accordance with this clause does not exceed three months.
  4. The orders of fund retention or attachment stipulated by the foregoing clauses shall be executed through the Central Bank if such funds are deposited at a bank or institution under its supervision.

Article (8)

Declaring the Origin of Funds Entering the State

The Central Bank shall set a ceiling for the amount allowed to enter the country in cash without the need for declaring the same and its origin. Any amount in excess thereof shall be subject to the declaration system established by the Central Bank.

Article (9)

Financial Information Unit

  1. A unit called the “Financial Information Unit” shall be established within the Central Bank to deal with money laundering operations. Reports on suspicious transactions shall be sent to such unit by all the concerned financial, commercial, and economic institutions. Any person or entity may also report such transactions to the Unit.

The Financial Information Unit may exchange information and reports on suspicious cases of money laundering with their counterparts in other countries, in accordance with international conventions to which the State is party or on the basis of reciprocity.

  1. Every bank operating in the State shall establish a subunit named the “Anti-Money Laundering Information Subunit” to monitor and follow up on all the operations and deals conducted by the bank or the financial institution or their customers, and those suspected of being connected to illegal deals or money laundering operations, or any operation involving the deposit or transfer of money of unknown origin.

This subunit shall report any information or data pertaining to such operations to the Financial Information Unit at the Central Bank of Libya set forth in Clause (1) of this Article.

The organisation, competences, and work procedures of the Financial Information Unit at the Central Bank of Libya and the subunits of banks shall be determined by a decision issued by the governor.

Article (10)

Role of Financial Information Unit

  1. After studying the case referred or reported to the Unit stated in Clause (1) of the previous Article, such Unit shall notify the governor of any information or reports in its possession to take necessary action.
  2. If money-laundering cases are directly reported to the Public Prosecution, the latter shall take the necessary action and inform the Financial Information Unit at the Central Bank of Libya of the reported matters.

Article (11)

National Anti-Money Laundering Committee

In accordance with this law, a committee named the “National Anti-Money Laundering Committee” shall be established with the governor of the Central Bank of Libya or his deputy as chairperson and one or more representatives of the following entities as members:

-        The Central Bank

-        Secretariat of the General People’s Committee for the Financial and Technical Control Authority.

-        Secretariat of the General People’s Committee for Justice.

-        Secretariat of the General People’s Committee for Public Security.

-        Secretariat of the General People’s Committee for Finance.

-        Secretariat of the General People’s Committee for Economy and Trade.

-        Secretariat of the General People’s Committee for Foreign Communication and International Cooperation.

-        Customs Administration.

-        Tax Administration.

Representatives shall be nominated by their respective entities upon consultation with the Committee chairperson. The committee composition and remuneration of its members shall be determined by a decision issued by the board of directors of the Central Bank of Libya.

Article (12)

Competences of the Committee

The Committee set forth in the previous Article shall have the following competences:

  1. Propose anti-money laundering regulations and procedures.
  2. Facilitate the exchange of information and coordination between the entities represented therein.
  3. Draft the internal regulation that governs the work of the Committee. Such regulation shall be issued by a decision of the board of directors of the Central Bank.
  4. Propose the executive regulation of this law in accordance with the provision stipulated by Article (16) hereof.
  5. Represent the State in international anti-money laundering forums and conferences.
  6. Prepare a reporting template for suspicious transactions set forth in Article (9) hereof, and determine the method of sending the same to the Financial Information Unit at the Central Bank.
  7. Any other competences entrusted by the board of directors of the Central Bank of Libya.

Article (13)

Establishing Appropriate Anti-Money Laundering Mechanisms

All entities concerned with licensing or authorizing financial, commercial, and economic institutions, and the entities entrusted with the control and inspection thereof shall establish the appropriate mechanisms to ensure their compliance with money-laundering rules and regulations. They shall also notify the Financial Information Unit at the Central Bank of suspected cases upon detection thereof.

The Central Bank of Libya shall institute anti-money laundering directives to be followed by such entities and shall notify them thereof through publications issued by the governor.

Article (14)

Respecting the Confidentiality of Information

All entities must preserve the confidentiality of the information or data acquired in accordance with the provisions of this law. They shall only disclose the same to the extent required for use in investigations, legal actions, and lawsuits related to money laundering and other crimes stated in this law.

Article (15)

Anti-Money Laundering Judicial Cooperation with Other Countries

  1. Based on the request of a judicial entity of another country, the Public Prosecutor may order the tracking, freezing, or retention of proceeds generated by a money laundering crime or its instrumentalities, if the incident falls under the description provided by the provisions of this law and the country of the requesting judicial entity has concluded a judicial cooperation agreement with Libya, or if such is effected on the basis of the rules of reciprocity.
  2. The binding force of a judicial ruling or order issued by the court or competent judicial entity of another country, which stipulates the confiscation of funds, proceeds, or instrumentalities pertaining to a money-laundering crime or related crimes, may be acknowledged if the incident falls under the description provided by the provisions of this law and the country of origin of such court or judicial entity has concluded a judicial cooperation agreement with Libya, or if such is effected on the basis of the rules of reciprocity.

Article (16)

Executive Regulation of the Law, and the Directives and Publications issued in accordance therewith

  1. The executive regulation of this law shall be issued by a decision of the General People’s Committee based on the proposal of the National Anti-Money Laundering Committee and the governor of the Central Bank of Libya.
  2. The governor of the Central Bank of Libya shall be responsible for issuing the publications and directives relating to the implementation of the provisions of this law and its executive regulation. He shall notify all the concerned entities thereof.

Article (17)

Entry in Force

This law shall enter into force from its date of issuance and shall be published in the Legal Register and the various media outlets.

General People’s Congress – Libya

Issued in Sirte

On 12 January 1373 FDP/2005 AD