Letters of credit (L/Cs) will no longer be needed for Tunisian goods entering Libya through land borders.

The move is part of the two neighbouring countries' efforts to restore and boost cross-border trade.

Policy rationale

The Tripoli-based Libyan government and its central bank had prohibited the opening of L/Cs for goods imported through the country's land borders and customs officials sporadically refused to clear foreign goods arriving at ports without L/C documentation.

The policy was introduced in an attempt to stop importers using hard currency purchased on the black-market to pay for foreign goods.

Trade revival

Annual trade between Tunisia and Libya has decreased to less than US$220 million from US$780 million before 2010.

In a further move to restore and boost cross-border trade, over 170 Tunisian entities from several sectors and over 1,200 Tunisian participants took part in the Libyan-Tunisian Economic Forum which convened on 22 May in Tripoli.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.