Libya And Belgium Clash Over Fate Of Sovereign Wealth Fund’s Frozen Assets

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A dispute has broken out between Libya’s sovereign wealth fund and the Belgian government over assets frozen in the European country.

The Libyan Investment Authority (LIA) has criticised a plan by the Belgian government to ask the United Nations to allow a partial unfreezing of the fund’s assets in its territory.

According to the LIA, the request is being made on behalf of the Global Sustainable Development Trust (GSDT), an entity linked to Prince Laurent, the brother of the Belgian king. For some years the GSDT has been trying to reclaim money that it says it is owed as a result of a failed reforestation scheme signed with the late dictator Muammar Gadaffi in 2008.

Belgian media have reported that finance minister Vincent Van Peteghem told a parliamentary committee in late 2020 that he had no objection to such a move and that he had instructed the Foreign Ministry to start a notification process at the UN. It is not clear if that process has begun, with the ministry failing to respond to questions for this article.

There is certainly enough money to pay repay the GSDT. Politico reported in 2018 that the LIA’s assets frozen in Belgium were worth €14 billion ($17 billion), held in bank accounts managed by Brussels-headquartered Euroclear. However, the LIA insists it is independent from the Libyan state and was never in a contractual relationship with the GSDT or Prince Laurent and therefore it is not liable for any claims made against the Libyan government.

Libya’s ambassador to the UN Taher El-Sonni told the Security Council on 28 January that “some Belgian government institutions” had attempted to seize nearly $50 million in compensation for cases against the Libyan government. “We hold this Council responsible for standing firmly in front of this grave violation,” he said.

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UN sanctions on Libya were imposed in 2011 and, while the LIA has asked for changes to be made to the restrictions it faces, it says it does not seek the removal of sanctions – even though a report has shown that its portfolio could have been worth $4.1 billion more if it had not had to deal with sanctions over the past decade.

The lobbying effort by Tripoli to alter the sanctions regime continues. El-Sonni also told the UN Security Council late last month that his government intended to present a request in the coming days to speed up amendments to the sanctions regime which would “enable the Libyan Investment Authority to manage funds and assets without lifting the freeze on the funds at this point of time.”

Belgium has drawn criticism for its approach to sanctions on Libya in the past, reportedly allowing millions of euros worth of stock dividends, bond income and interest payments generated by the frozen funds to be transferred abroad to unknown beneficiaries.