Libya

Researcher4118: There is no evidence that effective controls over asset disposal have been implemented since the previous Transparency International Government Defence Anti-Corruption Index report in 2013, which stated there was no evidence or knowledge of any controls.

Researcher4118: Given the weak internal audit and financial control mechanisms of Libya's defence and security institutions--which were highlighted in the Libya Audit Bureau's 2014 external audit--it is highly unlikely that the scruntity of asset disposals has improved since the previous Transparency International Government Defence Anti-Corruption Index report on Libya (which stated there was no evidence of any oversight).

Researcher4118: Under Gaddafi the expenditure on security organizations was not recorded, as the government budget did not itemize spending in any level of detail (Mattes). The current government's most recent two budgets have not contained any reference to secret budgets or programs.

Researcher4118: Experts interviewed for this project agreed that even though it is mandated with an oversight function over the defence budget, the General National Congress (GNC) is generally not provided with detailed information on security sector spending. Thus, although there should be GNC oversight of these programs, the amount of information provided to GNC members on secret items is likely even more restricted.

The last two budgets passed by the Libyan government have been very broad, without much detail about specific programs. However, according to the Constitutional Declaration and its rules of internal procedure, the General National Congress (GNC) does have the power to choose not to divulge certain information as well as to hold sessions in secret for reasons of national security. According to one expert, the government uses this lack of budget specificity to fund secret programs, chief among them the Libyan Intelligence Service.

Researcher4118: The Libyan Audit Bureau has published an external audit report on government expenditure, including defence. In the defence and security institutions, serious issues were raised. However, no audit reports have been released which deal with secret items or programs. It is unlikely that secret expenditures are being audited, or that any such information is provided to legislators.

Researcher4118: Libya's State Fiscal Law and associated executive regulations &quoute;stipulate that the budget expenditures be executed within the authorized appropriations in the budget law&quoute; (IMF, 2013: 32). The same laws and regulations &quoute;also stipulate a two-stage procedure of funds allocation to line ministries to prevent budget overrun&quoute; (IMF, 2013: 22). The Ministry of Finance Budget Department issues budget allotments on a quarterly basis, in order to reduce the risk of overspending.

In practice, however, the Libyan Ministry of Defence (MOD) routinely uses funds outside of the defence budget authorization. A report by the Libyan Audit Bureau found that the MOD exceeded its budget in 2012/13, using emergency funds without providing the Audit Bureau with a statement of expenditures or an accounting of what the funds were used for. More generally, it found that a wide range of defence expenditures were not properly documented and that there were a number of large funds transferred to individuals and private banks outside of defence institutions. The report was critical of the lack of transparency and improper documentation.

Researcher4118: In practice, there are substantial off-budget military expenditures. The Libyan Ministry of Defence (MOD) routinely uses funds outside of the defence budget authorization. A report by the Libyan Audit Bureau found that the Libyan MOD exceeded its budget in 2012/13. The MOD used emergency funds and did not provide the audit bureau with a statement of the actual expenditures nor an accounting of what the money was spent on.

Overall, the report found that a wide range of defence expenditures were not properly documented and that there were a number of funds transfers to individuals outside of defence institutions. The report was critical of the lack of transparency and improper documentation. No evidence could be found establishing a link between these payments and any illicit activity.

It is more likely that the funds were used to foster and maintain informal security networks involving the country's many militia groups. As there are a range of government-sponsored militias that are legitimized under law, payments to these groups would not necessarily be illicit.

Researcher4118: There are no official mechanisms to classify information in Libya on the grounds of protecting national security. A senior official at the Ministry of Justice stated that there were no laws regulating the classification of information to protect national security. However, according to the Constitutional Declaration and its rules of internal procedure, the General National Congress (GNC) does have the power to choose not to divulge certain information as well as to hold sessions in secret for reasons of national security.

More specifically, as one report noted: &quoute;While Article 66 provides that the sessions are public, the majority may close meetings on the request of at least twenty GNC members or a member of the government. International experiences suggest that the temptation is high in case of controversial issues to have meetings behind closed doors.&quoute; (Democracy Reporting International, 2013).

Researcher4118: There is no evidence of the defence institutions holding any significant commercial beneficial ownership.

A senior international business official noted that the Libyan government has in the past entered into joint ventures with arms manufacturers, most notably the Italian firm Finmeccanica. The two parties agreed to build a helicopter plant and in April 2010 Finmeccanica and the Libyan Company for Aviation Industry &quoute;opened a new facility, the Libyan Italian Advanced Technology Company (LIATEC) plant at Abou Aisha near Tripoli.&quoute; LIATEC was established in 2006 by three shareholders – the Libyan Company for Aviation Industry (50%), Finmeccanica (25%) and AgustaWestland (25%). The Libyan Investment Authority became Finmeccanica's fourth largest shareholder (per the CAAT).

According to the interviewee, &quoute;the government is in the business of defence,&quoute; and these kinds of public-private partnerships are common in Libya, but do not feature the kind of transparency normally associated with this type of work. However, while there are examples of joint ventures between the Libyan government and Libyan investment authority and international arms manufacturers, these ventures are not specifically owned by Libyan defence institutions.

Researcher4118: There is no evidence that defence institutions hold any significant business ownerships. An official interviewed has stated that there are examples of joint ventures between the Libyan government and Libyan investment authority and international arms manufacturers. For example dealings with Italian firm Finmeccanica and its subsidiary AgustaWestland. The Libyan Italian Advanced Technology Company (LIATEC) plant at Abou Aisha near Tripoli was established in 2006 by three shareholders – the Libyan Company for Aviation Industry (50%), Finmeccanica (25%) and AgustaWestland (25%). However, the official noted that these ventures are not specifically owned by Libyan defence institutions, but rather government investment agencies.

Researcher4118: Research found no evidence of any current laws on the topic of private enterprise by state security forces. There is evidence of links between government actors and militia groups who are involved in organized crime, including the cross-border movement of goods, arms, people and drugs. Historically these illicit economies were tolerated by Gaddafi and have persisted in the transitional period.

One report (Lacher, 2012), noted that &quoute;smuggling was managed by senior officials until the demise of the Qaddafi regime.&quoute; In fact, the ability to profit from Libya's black market economy was given out to officials, tribes and regions as a form of patronage. Evidence indicates that the practice of members of the defence and security institutions taking part in the illicit economy continues in the post-Gaddafi era. There is no evidence that officials engaging in this behaviour have faced sanctions. Indeed, a recent arrest of a militia member in possession of two kilograms of hashish &quoute;did not lead to prosecution because the individual was freed by his colleagues.” (Shaw and Mangan, 2014)

Researcher4118: Libya's Prime Ministers have made public statements against corruption. For instance, Prime Minister Ali Zeidan said that &quoute;corruption is a disease that requires persistent treatment to eradicate it from society,&quoute; and that &quoute;the government [would] undertake all necessary measures to do that” (see Libya Herald). Another report noted that “Zeidan’s government promised to make serious efforts to enhance transparency and fight corruption, but these promises are yet to translate into real action on the ground.” (see Eljarh).

The former Defence Minister (the current acting prime minister) Abdulla Altheni, appeared on Libyan TV in August and December 2013 to speak about building a national and professional army and reintegrating armed groups.

Researcher4118: Corruption and bribery are felonies, as stipulated in Article 226 of the Libyan Penal Code. Other financial crimes include &quoute;article 230 on the embezzlement of public funds; article 231 on the abuse of power for illicit gain; article 233 on using a public position to achieve a private interest.&quoute; Conviction of any of these crimes would carry the penalty of imprisonment.

A senior official at the Ministry of Justice interviewed for this study noted that several bribery cases have been referred to the Attorney General's office for investigation and trial. However, he said that members of the judiciary as a whole, including the Attorney General, are under threat by various armed groups. As a result, the Attorney General's office--fearing assassinations--has been unable to proceed with these kinds of cases, or any other significant cases more generally.

The policing and prosecution of government-affiliated militia groups has in particular been an ongoing problem, with no effective or consistent response to their corruption or involvement in organized crime.

Researcher4118: There is no evidence of legislation surrounding whistleblowing in Libya. In addition, Libya's deteriorating security environment makes it difficult for the military or defence ministries to credibly claim the capacity to protect any whistleblower from reprisals. In Benghazi, one report noted that &quoute;More than 100 prominent figures, senior security officials, judges and political activists have been assassinated in two years... [and] political assassinations have become so systematic that officials, legislators and activists from the region describe them as a concerted campaign to extinguish Libyans’ hope of building a stable, functioning, democratic nation&quoute; (Gall, 2014).

The fear of attacks by armed groups has eroded the ability of security and justice institutions to function. Threats to judges, prosecutors and police are widespread. One report noted that “Prosecutors lament that they cannot confront armed groups or defend themselves against possible retaliation should they do so; as a result, they often feel compelled to comply with their requests” (International Crisis Group, 2013). The result of this environment, according to a Libyan security sector analyst, is that &quoute;whistleblowers are very few and far between.&quoute;

Researcher4118: While there may be a recognition by officials that some positions are more vulnerable to corruption than others, there is no evidence of special attention being paid to personnel in sensitive positions. As one expert noted, this may be more due to the fact that Libyan security and defence institutions are relatively young and they have not yet developed the necessary human resources procedures or even the institutional mechanisms that could support such procedures. The expert noted that the legacy of Gaddafi's informal rule and purposeful weakening of defence institutions have hindered attempts at reform during the transitional period.

Researcher4118: Researchers have published estimates about the number of active personnel in the Libyan armed forces and the MOI. However, the presence of &quoute;ghost soldiers&quoute; and role of militia groups makes it unlikely that these numbers are known with any degree of accuracy. These figures are not publicly available on Libyan government websites. According to Global Fire Power, Libya has 35,000 active frontline personnel, and 81,000 active reserve personnel.

Researcher4118: Experts have published information on the rates of pay for members of the armed forces and their civilian counterparts but these figures are not official. Official figures on pay rates and allowances are not publicly available.

Researcher4118: No publicly available information could be found on the system for payments. One expert interviewed indicated that some major security challenges were a direct consequence of government incompetence, saying that &quoute;petroleum facilities guards only went rogue when they didn’t receive their pay checks,&quoute; because the government was unable to set up adequate payroll system to ensure they were paid on time.

Another Libyan official stated in an interview with the Financial Times that payments to brigades associated with the Ministry of Defence and Ministry of Interior were made in large cash transfers to commanders, with no mechanism for accountability. Members of Libya's revolutionary brigades are reportedly largely paid by check made out to the head of the militia, and &quoute;to date, many fighters complain of late payments; others have registered two or three times with other security entities” (Wehrey and Cole, 2013: 6).

Another report noted that &quoute;because of the system of unregulated, direct payments to commanders of armed groups and the absence of an effective registration system, a young man might be a member of a Shield, his local armed group that had been subsumed under the Shield but still operated independently, and the police all at the same time&quoute; (Wehrey).

The government is thought to be planning concrete steps to avoid duplication in its payroll system. Most notably, by issuing a National Identity Number to all Libyan citizens. As one analyst wrote: &quoute;By giving each person a unique number, the government will be able make sure that transfers and payments are going to the right people and avoid manipulations to the system.&quoute;

Researcher4118: Libya has no published system for appointments, objective job descriptions or any associated oversight. Libyan security and defence institutions suffer from a general lack of expertise. As one expert noted, those who had the experience are excluded by the Political Isolation Law. Though the internationally-recognized government in Libya revoked this law in February 2015, it remains to be seen what impact this will have on recruitment and professionalization (Al Jazeera, 2015).

There has been significant turnover at the senior levels of security and defence institutions, mostly related to the country's ongoing political crisis. One international official noted that within 6 months his interlocutor at the MOI changed four times; there was no Minister of Interior for 9 months; and, that most senior figures are highly politicized. According to this official, the General National Congress and the government are all party to this scramble for key posts in the bureaucracy with all sides competing to consolidate control of key ministries. In this politicized environment, it is highly unlikely that merit is the key criterion used to determine appointments.

Researcher4118: There is no evidence that formal appraisal processes or promotions boards operate in Libya. In fact, there is little evidence of outside scrutiny of any kind. As such, there is no reason to believe that all promotions are based on merit using objective criteria. One report measuring the transformation toward democracy and market economy as well as the quality of political management in 129 countries noted that &quoute;recruiting procedures are no more transparent than under the former regime, and securing a position still depends very much on connections.&quoute; In interviews, experts agreed that the highly politicized climate in which these institutions are operating made it very difficult for objective, meritocratic promotions to take place.

Researcher4118: Under Gaddafi, &quoute;the Compulsory Military Service Statute of 1978 made all eligible males between the ages of 17 and 35 subject to a draft commitment of three years of active service in the army or four years in the air force or navy.&quoute; (Library of Congress). However, as of Gaddafi's 2011 ouster, the People's Militia no longer exists and there is no evidence that compulsory conscription continues in Libya.

Researcher4118: Under Gaddafi, &quoute;the Compulsory Military Service Statute of 1978 made all eligible males between the ages of 17 and 35 subject to a draft commitment of three years of active service in the army or four years in the air force or navy.&quoute; (Library of Congress). However, as of Gaddafi's 2011 ouster, the People's Militia no longer exists and there is no evidence that compulsory conscription continues in Libya. In terms of voluntary conscription, there is no evidence of any policies to confront bribery for preferred postings.

In general terms, corruption and bribery are felonies, as stipulated in Article 226 of the Libyan Penal Code. Other potentially relevant crimes include &quoute;article 231 on the abuse of power for illicit gain; article 233 on using a public position to achieve a private interest.&quoute; Conviction of any of these crimes would carry the penalty of imprisonment. However, none of these relate specifically to the bribery to solicit preferred postings.

Researcher4118: Libya has a problem with &quoute;ghost&quoute; employees across the civil service. A report by the IMF noted that a national system for the identification of individuals (discussed below) would help &quoute;reduce ghost workers in the civil service.&quoute; Another report discussed &quoute;widespread corruption&quoute; which sees &quoute;many public servants receive double or triple salaries without showing up at their workplace.’” (Rettman). The Libyan Ministry of Planning estimated in 2014 that 200,000-300,000 ghost workers had duplicate jobs (IHS).

Dealing specifically with the defence sector, international experts interviewed for this study expressed confidence that there remained &quoute;ghost soldiers&quoute; and other officials receiving multiple salaries. For the overall security sector, including the police and armed forces, there are approximately 50,000 on the government payroll; however, one expert estimated that perhaps half of those are actually fulfilling their duties. In 2013, it was revealed that a program that paid a stipend of $2,300 a month to revolutionaries had widespread issues with fraud; then Prime Minister Ali Zeidan said that there were 250,000 duplicated names on the list &quoute;meaning the state may have paid out hundreds of millions of dollars a month until the program was halted late last year because of the abuses” (Associated Press).

The government is taking concrete steps to avoid duplication in its payroll system. Most notably, by issuing a National Identity Number to all Libyan citizens. As one analyst wrote: &quoute;By giving each person a unique number, the government will be able make sure that transfers and payments are going to the right people and avoid manipulations to the system.&quoute;

Researcher4118: Militia groups which are part of one of Libya's hybrid (state and non-state, formal and informal) security arrangements--the Supreme Security Committees (SSC) and the Libya Shield--form the majority of manpower and military strength in the country. The system used to pay these armed groups is badly in need of reform. One report noted that &quoute;brigade members have largely been paid by cheques made out to the head of their outfit&quoute; (Wehrey and Cole).

Another report noted that while Libyan government officially requires an official process for any amount greater than $8,000, these accountability measures are reportedly routinely ignored for payments to revolutionary brigades (Daragahi). Another report noted that &quoute;because of the system of unregulated, direct payments to commanders of armed groups and the absence of an effective registration system, a young man might be a member of a Shield, his local armed group that had been subsumed under the Shield but still operated independently, and the police all at the same time&quoute; (Wehrey).

The weakness of Libya's payroll management stems from Gaddafi-era policies. Under Gaddafi, &quoute;the Ministry of defence and the chief of staff’s office did not have an institutional base and staffing functions.&quoute; (Wehrey). This legacy undermines the ability of the Ministry of effectively control its payroll, including affiliated armed groups.

Researcher4118: There is no evidence that the Ministry of Defence (MOD) has a Code of Conduct policy covering corruption. No experts interviewed for this project were aware of a Code of Conduct for the MOD or the armed forces.

Libya's Penal Code contains anti-bribery provisions applying to public officials, which would theoretically cover military personnel. Corruption and bribery are felonies, as stipulated in Article 226 of the Libyan Penal Code. Other financial crimes include &quoute;article 230 on the embezzlement of public funds; article 231 on the abuse of power for illicit gain; article 233 on using a public position to achieve a private interest.&quoute; Conviction of any of these crimes would carry the penalty of imprisonment.

Researcher4118: Libya does have an institution called the Military Integrity and Reform Commission. However, it is mandated to remove officers who fought with Gaddafi during the civil war. It does not actively investigate cases of corruption or breaches of established codes of conduct (as mentioned in the comments for question 47, there is no known code of conduct for the MOD or the armed forces). As one expert noted in an interview, the corruption allegations are very much interwoven with the antagonistic politics of the country, and allegations of corruption have become a political tool.

Libya's Penal Code contains anti-bribery provisions applying to public officials, which would theoretically cover military personnel. Corruption and bribery are felonies, as stipulated in Article 226 of the Libyan Penal Code. Other financial crimes include &quoute;article 230 on the embezzlement of public funds; article 231 on the abuse of power for illicit gain; article 233 on using a public position to achieve a private interest.&quoute; Conviction of any of these crimes would carry the penalty of imprisonment.

Researcher4118: One influential report noted that under Gaddafi, &quoute;training and development programs that could strengthen the force, especially at the lower levels, were non-existent&quoute; (RAND, 2014: 11). International partners have agreed to provide training for soldiers in the Libyan army. These programs &quoute;say they are training to ‘NATO standards.’” (Hauslohner and DeYoung). The UK, specifically, will train up to 2,000 members of the Libyan Armed Forces in &quoute;basic infantry skills and junior leadership training&quoute; (UK Government). Despite the leadership components of these training programs, they are focused primarily on operational effectiveness. They do not provide specific anti-corruption training.

Researcher4118: There does not seem to be a policy of making cases public. However, a senior official at the Ministry of Justice interviewed for this study noted that several bribery cases have been referred to the Attorney General's office for investigation and trial. Nevertheless, he said that members of the judiciary as a whole, including the Attorney General, are under threat by various armed groups. As a result, the Attorney General's office--fearing assassinations--has been unable to proceed with these kinds of cases, or any other significant cases more generally.

The involvement of government-affiliated militias in corruption and organized crime has not been effectively policed or prosecuted. As one example, a2014 report noted that &quoute;a recent arrest of a militia member in possession of two kilograms of hashish... did not lead to prosecution because the individual was freed by his colleagues” (Shaw and Mangan, 2014: 24).

Researcher4118: As one expert noted in an interview, Libya is still primarily using Qaddafi-era laws. Although a new constitution is being developed, procurement and corruptions laws have not changed. As this expert put it, procurement requirements under the Qaddafi-era system were mainly focused on allowing corruption to happen as opposed to not allowing it to happen.

A Libyan official noted that contracting is still conducted the same way as during the Qaddafi regime, which is based on nepotism and corruption. Facilitation payments are therefore not likely to be discouraged. A public opinion survey conducted in 2013 found that &quoute;Forty-three percent of respondents indicate that informal payments are at least slightly useful for navigating government bureaucracy, and 48 percent think such payments are at least slightly useful for obtaining a government job&quoute; (National Democratic Institute). This suggests that informal payments are perceived by many to be part of the process of conducting business in Libya.

Researcher4118: There is no evidence that Libya has military doctrine addressing these issues for operations within or outside the country. In terms of international missions, there is no evidence that Libya has contributed personnel to any UN or EU mission since 2011 and its personnel have therefore not been exposed to any international doctrine or pre-deployment training that would introduce them to these issues.

Researcher4118: During the Gaddafi era, the Libyan Armed Forces took part in a number of international missions; during this era, there was &quoute;no indication of military doctrine addressing corruption issues, anti-corruption training for commanders on deployment...or steps taken to monitor corruption issues in the field&quoute; - as indicated in the results of the 2013 Government Defence Anti-Corruption Index assessment of Libya. There is no evidence that this training has been provided during the transitional period.

Researcher4118: The Libyan Armed Forces do not deploy personnel for corruption monitoring for operations undertaken within the country. The Libyan Armed Forces have not taken part in any international missions during the post-Gaddafi transitional period and have therefore not deployed any personnel for corruption monitoring. No such personnel were deployed during missions undertaken in the Gaddafi era.

Researcher4118: The Libyan Armed Forces have not taken part in any international missions in the post-Gaddafi transitional period. However, there is no evidence of any policy, guidelines or training on corruption risks occurring during deployments. There is also no evidence of such policies, guidelines or trainings for domestic deployments.

Researcher4118: According to the US Department of State's Overseas Security Advisory Council (OSAC)'s 2014 report on Libya, &quoute;Private security firms now operate in Libya; some claim to have obtained “no objection certificates” from the Transitional National Council, the predecessor to the General National Congress. The firms assert that a “no objection certificate” permits them to operate in Libya.&quoute; (OSAC, 2014). Nevertheless, a senior international embassy official noted that there is almost no presence of international security contractors in Libya. This official stated that Libyan officials are extremely reluctant to entertain the presence of such contractors in their country. As a result, this official was aware of only two companies in the whole country, which are authorized to provide diplomatic security services for embassies.

According to a report on conducting business in Libya, &quoute;current legislation bar[s] foreigners from being involved in security in Libya. Expats are not allowed to be armed, nor is it advisable to employ armed Libyan escorts unless under formal arrangements with the MOI, MOD or an alternative authorized unit; few, if any, armed private security providers are internationally accredited and armed escort in Tripoli is likely to exacerbate incidents&quoute; (Allurentis Limited and UK Trade and Investment).

One private security company's website (GardaWorld) states: &quoute;Due to restrictions put in place by the Libyan Government on foreign security companies in Libya, we operate within the country as an authorized national entity licensed specifically for Safety and Security known as Safety International. In this way GardaWorld’s wealth of security expertise, project management and security specialist oversight is meshed with high-quality and well-trained local Team Leaders, Security Officers and Drivers employed by our own Libyan entity&quoute; (GardaWorld).

No evidence could be found that international private security companies have been involved in corrupt practices.

Researcher4118: Defence and security procurement processes are covered by the Regulation of Administrative Contracts Number 563, passed in 2007. As one report noted, &quoute;where a contract is entered into with a public sector entity, such contract will be subject to the Administrative Contracts Regulation no. 563...There are tender rules and other special rules for state contracts&quoute; (Technical Review Middle East).

As one expert interviewed for the research indicated, in practice the procurement process is not driven by any overarching strategy however, and is therefore prone to opportunism and corruption. Regardless of the processes laid out in the legislation, the expert mentioned that most procurements are done through single-source, third parties, or brokers. Formal processes of procurement are largely ignored by the Libyan government and international firms. A report published by UPI in 2013 described a procurement process driven more by personal connections and affiliations than legislation.

Researcher4118: There is no evidence of any publicly available information relating to the defence procurement process. A senior military official indicated that &quoute;there is no legal obligation on public institutions to disclose contract implementation to the public. The defence ministry has never shared its defence contracts publicly.&quoute;

A senior international business official said in an interview that the procurement process is &quoute;absolutely not&quoute; governed by an overarching strategy and that in fact even the different departments within the Ministry of Defence are fighting for budgets and equipment.

Researcher4118: A senior military official stated that there has never been a defence procurement oversight mechanism whatsoever. Libya has not changed the law and regulations in this respect. The Qaddafi regime considered these kinds of contracts as classified national security subjects.

However, according to the UN Panel of Experts Report on Libya, the Libyan government took steps to centralize weapons procurement by making the Military Procurement Department in the Ministry of Defence &quoute;the only focal point for arms procurement by all ministries and agencies&quoute; (UNSC, 2014: p16). The authors of the UN Panel of Experts Report found that &quoute;the creation of the Military Procurement Department and the official designation of authorized individuals was a significant development that allowed for a more accountable procurement process&quoute; (UNSC, 2014: p16).

In practice there are still several streams of weapons procurement in the MOD and throughout the Libyan government. The Panel of Experts noted that &quoute;The fact that several channels still exist within the Ministry of Defence that negotiate arms contracts indicates that there is no centralized oversight of weapons procurement. On several occasions, the Panel contacted the Military Procurement Department to verify notifications submitted to the Committee. However, the authorized officials at the Department were not always aware of the materiel listed in the notifications&quoute; (UNSC, 2014: p17). There is no evidence that the Military Procurement Department has had any success providing oversight and accountability.

Libya has general procurement mechanisms which provide some degree of oversight for defence contracts. For instance, the Financial Audit Agency (FAA) &quoute;is in charge, by virtue of law, of clearing all procurement contracts exceeding LYD 500.000 (or approximately USD 375,000). The clearance is performed ex ante, before the contract is signed, and is binding on the respective spending unit. All documents and invoices (irrespective of their amounts) corresponding to the implementation of these contracts (more than LYD 500,000--or approximately USD 375,000) are also submitted for the pre-approval of the FAA&quoute; (IMF, 2013: p36). Though the FAA's official powers give it significant scope to provide oversight, no evidence of its effectiveness could be found.

Researcher4118: Actual and potential defence purchases by the Libyan government are reported in international business media. However, there are typically no associated official statements from the Libyan government informing the public of the actual or potential sale.

Researcher4118: No publicly available information was found on this topic during research. One expert interviewed for this research indicated that companies wishing to bid for work for the Ministry of Defence (MOD) or armed forces are required to register with the Procurement Department of the MOD. However, as the expert noted, the registration process has more to do with the status of the corporation (for instance providing tax statements) than any anti-corruption requirement. There is no formalized system of requirements relating to the US Foreign Corrupt Practices Act (FCPA), for instance.

Researcher4118: A senior international business official said in an interview that the procurement process is &quoute;absolutely not&quoute; governed by an overarching strategy and that in fact even the different departments within the Ministry of Defence are fighting for budgets and equipment.

With international assistance from the UN mission (UNSMIL), the Libyan government is attempting to develop a comprehensive defence policy. According to UN reports, a draft White Paper has been developed. However, the process has since stalled and the country continues to operate without a formal defence policy.

Researcher4118: There is still no evidence of any comprehensive procurement plan or any stated requirements from the Libyan defence institutions. An expert interviewed for this project noted that Libyan procurement has been a &quoute;free for all,&quoute; where even the different departments within the Ministry of Defence (MOD) are fighting for a share of the budget and to get the equipment they want.

The press has quoted Col. Abdel Nasser Busnina, a senior Libyan air force officer, as saying that &quoute;the new regime in Tripoli is prepared to allocate the $4.7 billion in energy revenues to acquire advanced weapons systems&quoute; (UPI, 26 March 2013). This report also stated that it is &quoute;not clear whether Tripoli has drawn up a formal program since post-Gadhafi Libya is subject to a U.N. embargo imposed during the country's eight-month civil war in 2011. But the sanctions were eased two weeks ago to allow the new government to buy non-lethal military equipment to help boost security&quoute; (UPI, 26 March 2013).

Researcher4118: In principle, the Libyan government committed to improving its procurement legislation by joining the COMESA Free Trade Area in 2005. However, as one expert interviewed for this research noted, while the Libyan government attempts to show that there is open competition in government procurement, this remains more of a conceptual idea than an actual fact. The expert stated that most purchases continue to be done as single-source contracts through third party intermediaries and brokers. Indeed, the expert argued that there remains no formalized process for tendering and although tenders are occasionally published, in practice they are ignored by both the industry and the Libyan government.

Published accounts of Libyan weapons procurement reinforce this assessment, tending to focus on direct relationships between the government and a particular defence firm. One report, on the potential sale of T-129 attack helicopters and Hurkus turboprop trainer from Turkish Aerospace Industries (TAI), quoted an official as saying that &quoute;TAI is optimistic that Libyan officials and the company will start discussions regarding a possible sale, which could be an entry point into for Turkey into the Libyan weapons market. Other planned procurements, including satellite equipment from an Italian firm, and US small arms, all indicate single sourcing.

Researcher4118: No direct evidence of this was found during research. In 2013 the government of Prime Minister Ali Zeidan announced their intention to establish a central bidding committee to manage the awarding of contracts (Libya Business News, 2013). However, no evidence could be found that any such policy was adopted.

An interviewee has indicated that, in addition to requiring GNC and Ministerial approval, the Libyan government uses technical committees for large procurements. The use of the emergency / crisis budget has circumvented this process however. Moreover, most procurements are done as single source contracts, rather than competitive tenders. Published accounts of Libyan weapons procurement support the view that most contracts are single-source procurements.

Researcher4118: According to a senior military official, procurement contracts are still managed the same way as they used to be during the Qaddafi regime, which is based on nepotism and corruption (Interviewee 13). Bribery and corruption are felonies, as stipulated in Article 226 of the Libyan Penal Code. However, these laws do not specifically deal with collusion in bidding for security contracts, nor do they cover the defence sector in particular. Another expert noted that there were &quoute;no laws on the books&quoute; covering collusion in bidding for defence and security contracts (Interviewee 15).

Researcher4118: The Libyan government has taken steps to centralize weapons procurement by making the Military Procurement Department in the Ministry of Defence &quoute;the only focal point for arms procurement by all ministries and agencies.&quoute; (UNSC) The authors of the UN Panel of Experts Report found that &quoute;The creation of the Military Procurement Department and the official designation of authorized individuals was a significant development that allowed for a more accountable procurement process.&quoute; In practice there are still several streams of weapons procurement in the MOD and throughout the Libyan government. The Panel of Experts noted that &quoute;The fact that several channels still exist within the Ministry of Defence that negotiate arms contracts indicates that there is no centralized oversight of weapons procurement. On several occasions, the Panel contacted the Military Procurement Department to verify notifications submitted to the Committee. However, the authorized officials at the Department were not always aware of the materiel listed in the notifications.&quoute;

It is likely that the Ministry of Defence Procurement Office faces serious staff shortages and a lack of adequately trained staff. One of the defining characteristics of the post-Gaddafi state is weak administrative capacity. Major government ministries and agencies in the security sector and beyond lack the basic materials to operate, as well as skilled bureaucrats to manage the security forces. Libyan government officials lack the capacity to absorb large amounts of funds or manage complex processes of institutional change. The lack of capacity on the part of Libyan institutions to absorb assistance has been a major roadblock. As one expert noted in an interview, &quoute;the international community’s ideas for assistance are built on an assumption of Libyan capacity that is not there.” In this context, it is unlikely that the office has the ability to reliably ensure that defence contractors meet their obligations. Research found no specific information on undue influence from higher grades, but this can reasonably be assessed as likely to occur given the overall governance context in Libya.

In an attempt to build the capacity of procurement staff, the UN Mission in Libya (UNSMIL) has supported training in procurement issues. The mission's website indicates that &quoute;the Ministry of Defence Procurement Office and the Libyan Armed Forces Military Procurement Department held a seminar on military procurement which highlighted modern trends and procedures in military procurement.&quoute; The website continues that &quoute;the Military Procurement Department and UNSMIL are now developing training initiatives aimed at capacity building in the field.&quoute;

Researcher4118: A legal expert has written that &quoute;in general, the only method of resolving commercial conflicts in Libya is to resort to litigation...In Libya there is no Arbitration Act as such. However, arbitration measures are mentioned in general in the 1953 Code of Civil Procedures. It should be noted that, contrary to many other countries in the MENA region, Libya permits a foreign party to a state contract (Public Contract) to choose arbitration as a method for dispute resolution.&quoute; In such cases, &quoute;Article no. 147 of the Libyan Civil Code states that a contract that is signed and is enforceable among the parties shall be the first source of law in any conflict resolution process.&quoute;

Research found no evidence of companies that have attempted to complain being unfairly disadvantaged or debarred from future procurements. As one expert noted in an interview however, while there are likely informal mechanisms through which to complain if a procurement has gone through, these would only be available through the use of influence. There is thus no safeguard for companies unable to exert influence on officials in the Libyan government.

Researcher4118: The fact that Libya has been victimized by corruption both from within and in its dealings with international companies and governments is clear. In August 2014 Bloomberg published a revealing report detailing the litany of corrupt deals that have cost Libya billions of dollars since before the revolution began (Bloomberg, 2014). Several high profile cases are discussed in Transparency International's blog (Transparency International, 2014).

In the case of contract disputes between foreign parties and the Libyan government, the Regulation of Administrative Contracts Number 563 and Commercial Code (amended in 2010), provides that the all disputes be referred to Libyan courts unless arbitration can be agreed upon. Nevertheless, there is no evidence that corrupt activities are punished in a formal legal way. Instead, individuals accused of corruption have tended to be exposed in a public way in order to discredit them (Interviewee 15). People in government positions have been accused of corruption, and have been publicly ridiculed in the media, but have ultimately continued in their positions (Interviewee 15). According to a senior military official, office contracts are managed the same way as they were during the Qaddafi regime, which is based on nepotism and corruption (Interviewee 13).

Researcher4118: The Government of Libya has not implemented an offset program, although according to a report by EPICOS, an information portal on aerospace and defence procurement, it has been discussed in the past. There is no clear evidence of offset contracts in place in Libya at the moment, although they are not banned by law. Due to the secrecy that surrounds the defence sector in Libya more generally, it is not possible to rule out the practice, but there is no available evidence either way in the public domain.

Researcher4118: The Government of Libya has not implemented an offset program, although according to a report by EPICOS, an information portal on aerospace and defence procurement, it has been discussed in the past.

There is no clear evidence of offset contracts in place in Libya at the moment, although they are not banned by law. Due to the secrecy that surrounds the defence sector in Libya more generally, it is not possible to rule out the practice, but there is no available evidence either way in the public domain.

Researcher4118: The Government of Libya has not implemented an offset program, although it has been discussed.

There is no clear evidence of offset contracts in place in Libya at the moment, although they are not banned by law. Due to the secrecy that surrounds the defence sector in Libya more generally, it is not possible to rule out the practice, but there is no available evidence either way in the public domain.

Researcher4118: One 2013 report discusses the use of commercial agents under the Commercial Code and Commercial Agency Law of 2004, stating that &quoute;Only a Libyan national or a wholly Libyan owned company can act as commercial agent&quoute; (Amereller, 2013). Research found no evidence of a policy relating to the use of intermediaries within the procurement process.

In a report detailing the business environment in Libya, the Libyan Ambassador to the UK and Northern Ireland gave the following advice about the use of brokers in the procurement process: &quoute;I would also advise avoiding indirect third party dealings, when tenders and business opportunities with the Government are announced. It is vital that all business relationships are formed with transparency&quoute; (Allurentis and UK Trade and Investment, 2014).

Notwithstanding this advice, it is highly likely that brokers and intermediaries are widely used in the defence procurement cycle with no government control. For instance, the case against Marc Turi--who was indicted in the US for acting as a broker for an arms deal in Libya without the approval of the US Department of State's Directorate of Defence Trade Controls (DDTC)--implicated several other individuals who may still be acting as brokers. Those interviewed for the project also stressed the importance of connections and influence in defence contracting.

Researcher4118: There are some tenders which are made public (see GlobalTenders), but overall purchases do not all seem to be made public. For instance, the US defence Security Cooperation Agency at the Pentagon notified Congress of a procurement deal with Libya, but there didn’t seem to be a corresponding Libyan disclosure (UPI).

Researcher4118: There is no publicly available evidence that any such requirements exist. An official interviewed for this research, who has overseen a number of procurements with the Libyan government, has indicated the Libyan government does not require any of these measures. Many international firms bidding on contracts in Libya will be covered under their country's anti-corruption legislation however (for instance, US firms covered under the Foreign Corrupt Practices Act-FCPA).

Researcher4118: According to an expert in the industry, it is very common for defence acquisition to be based on political influence by the selling nation. Reports of Libyan officials travelling to other countries are often accompanied with announcements of prospective procurement arrangements (see Nkala, 2014 for instance).

Most procurements under consideration are political in nature and brokered at the highest levels of leadership. As one example, after Italy's donation of 20 Puma armoured vehicles, Libya's defence minister stated that Italy would receive &quoute;priority status for new armaments acquisitions&quoute; (DefenceWeb). This suggests that future procurements involving Italy or Italian firms will not be based entirely on stated specifications, but rather will account for the country's political influence.

In April 2015, along with other allegations of corruption and incompetence, it was suggested that officials were pressured to buy weapons from France (Financial Times, 2015).

Response to peer reviewer:
Agreed. Score changed from 2 to 1.