UNITED NATIONS – Libya pressed the United Nations Security Council on Thursday to take urgent action to allow the managers of its sovereign wealth fund to move money between frozen accounts so the value can be protected and returns can be maximized.
Libya's U.N. Ambassador Ibrahim Dabbashi told the council that he was "surprised" there had been no response to the government's request last week for an exemption from U.N. sanctions for the Libyan Investment Authority so it can manage frozen assets while they remain under U.N. sanctions.
Without an exemption, Dabbashi said, the council will be responsible "for all the losses recorded by the Libyan body."
"These are profits that we could have collected to the tune of $2 billion a year," he said.
In a letter to the council last week, Dabbashi said the Libyan Investment Authority estimates that in 2014 alone, "instead of increasing the value of its assets base, it had real losses of $721 million."
"Furthermore, it lost an additional $1.6 billion to $2.3 billion in what would have been returns on investments if its assets had been properly invested in conservative investments with competitive interest rates," the letter said.
Dabbashi's letter said the Investment Authority had no access to its equity portfolio, and therefore "cannot respond to market changes or currency fluctuations." He added that most of the authority's bonds have matured "and the proceeds are in frozen accounts, where they are earning zero or negative interest rates."
Dabbashi noted in the letter that experts monitoring sanctions against Libya acknowledged the problem in a March 3 report to the Security Council. It said the council's aim wasn't to diminish the value of the investments and the council should clarify the matter "preferably by including an explicit exemption for fund management in a future resolution."
The Libyan ambassador spoke after the council unanimously adopted a resolution extending sanctions against the country until July 31, 2017.
The resolution requested Libya's new Government of National Accord, whose leader arrived in the country by ship on Wednesday, to confirm to the Security Council committee monitoring sanctions against the country "as soon as it exercises sole and effective oversight over the National Oil Corportation, the Central Bank of Libya, and the Libyan Investment Authority."