The Tripoli-based Central Bank of Libya (CBL) has announced several new conditions concerning letters of credit (L/Cs).

The conditions, which come into effect this month, include more stringent credit checks on individuals and entities seeking to open new L/Cs.

Goods verification

Under the new conditions, deposits made by importers will not be returned to the buyer until the Libyan authorities are convinced that the goods shown on L/C documents have actually been delivered to a destination in Libya.

Checks will also be made prior to an L/C opening that an importer has paid all outstanding customs, tax and banking duties.

The CBL has also demanded that correspondent banks conduct due diligence on exporting firms and their owners, to look for evidence of money laundering and corruption amongst other things.

Certification checks

Only specified international inspection companies and certification may be used to verify that goods shipped to Libya match the goods named on L/C documentation.

The new conditions also stipulate that goods may no longer be shipped across Libya's land borders.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.