Libya Urges UN to Act to Defend Sovereign Wealth Fund

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Source:   —  April 01, 2016, at 6:47 AM

Libya'south U. N. Ambassador Ibrahim Dabbashi told the council that he was "surprised" there had been number response to the government'south request latest week for an exemption from U.

Libya pressed the United Nations Security Council on Thursday to get urgent action to authorize the managers of its sovereign wealth fund to move money between frozen accounts so the cost can be protected and returns can be maximized.

Libya'south U. N. Ambassador Ibrahim Dabbashi told the council that he was "surprised" there had been number response to the government'south request latest week for an exemption from U. N. sanctions for the Libyan Investment Authority so it can manage frozen assets while they stay below 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've collected to the tune of $2 billion a year," he said.

In a letter to the council latest week, Dabbashi said the Libyan Investment Authority estimates that in two thousand-fourteenth alone, "instead of increasing the cost of its assets base, it'd genuine losses of $721 million."

"Furthermore, it lost an extra .6 billion to $2.three billion in what'd have been returns on investments if its assets had been properly invested in conservative investments with competitive interest rates," the letter said.

Dabbashi'south letter said the Investment Authority had number access to its equity portfolio, and therefore "cannot reply to market changes or currency fluctuations." He added that most of the authority'south bonds have matured "and the proceeds are in frozen accounts, where they're earning zero or negative interest rates."

Dabbashi well-known 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'south aim wasn't to diminish the cost of the investments and the council should make clear 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 thirty-one, 2017.

The resolution requested Libya'south new Government of National Accord, whose boss 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."

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