More than 500 abandoned containers are piled up in the Libyan port of Tobruk, largely as a result of trade-based financial crime using letters of credit (L/Cs).
The civil war-torn North African country has been plagued by a scramble for L/Cs that can be abused to make money from wide differences between the official and black market exchange rates and channel money abroad.
Tobruk’s deputy port manager, Omar Jilghaf has said that the stockpile of containers is a result of financial corruption, and that some have been in the port for more than 5 months.
”Financial corruption is behind these abandoned containers as some traders scramble for L/Cs from banks at the official exchange rate. They buy cheap or useless products and leave them inside the port after they receive their hard currency which they use as they wish,” Jilghaf told Libya’s News 24.
The official exchange rate is around 1.3 Libyan Dinar (LD1.3) to the US dollar for importers while black market exchange rates have reached as high as LD4.5 to the US dollar.
Because of Libya’s security situation, shipments arriving at its ports easily avoid inspections by customs officers to confirm that their contents tally with their pro forma invoice in value and specifications.
If the inspections of containers by customs officials at Libyan ports raise concerns, the L/Cs should be stopped.
But by bribery – or coercion in the case of militias – of customs, port and bank officials, over-invoiced transactions are allowed to slip through the net.
This means these fake traders, in collaboration with corrupt bank, port and customs officials, are opening millions of US dollars worth of L/Cs which are then banked abroad while Libya receives shipments of undervalued goods or no goods at all.
Categories: Trade Based Financial crimes News