The Address | Benghazi – Libya
BRUSSELS – Belgium asked Libya to settle debts owed to Belgian firms from the Gaddafi-era while also raising the prospect of allowing payments from funds frozen by sanctions, a letter from Belgian Foreign Minister, Didier Reynders, has revealed.
On Wednesday, Belgian media published the letter from 2012, in which Reynders spelled out to the Libyan government that he wanted the bills of Belgian companies to be paid after mentioning the possibility of the frozen funds being unblocked.
Reynders wrote to then Libyan Foreign Minister, Ashour Bin Khayal, that Belgian troops had helped liberate Libya and “in this spirit” he now wanted to inform him about Libyan assets in Belgium. He noted the technical possibility “to liberate” these frozen assets, and then mentioned debts of a number of Belgian companies, including gun-maker FN Herstal and another business in the defense sector.
“Allow me to congratulate the Libyan government for the successful elections of July 1. I am very pleased for this development in the context of the friendship between our two peoples and of the active participation of the Belgian Forces in the liberation of your country. In this spirit, I would like to inform you on the remaining financial assets which Libya still holds with financial institutions established in Belgium. You will fain hereby a detailed overview of these considerable assets,” wrote in the letter dated August 1, 2012.
Reynders explained to Ben Khayal that there is a “formal possibility” under EU sanctions laws “to liberate frozen assets for inter alia humanitarian objectives.”
“In accordance with to the regulations of the European Union, part of these assets remain frozen in several Belgian financial institutions. However, there is a formal possibility – as specified by the same regulations – to liberate frozen assets for inter alia humanitarian objectives. In order to facilitate this liberation, I wish to consult you, by means of this letter, on the future use of these frozen funds envisaged by the Libyan authorities.”
Reynders attached a list of nearly €30 million in outstanding payments to eight Belgian companies. “In order to settle these arrears, I would greatly appreciate it if you could provide me with the payment orders for each individual contract. This will undoubtedly improve the conditions related to export finance and facilitate further commercial activities between our two countries,” he wrote.
The list of companies attached to the letter sent to Ben Khayal in 2012 includes firearm company FN Herstal (for grease spray, 536,000 euros) the egg producer Incubel (for hatching eggs, more than 900,000 euros due), the satellite communication company European Datacomm (for satellite communication, 145,000 euros), Siemens (for water supply, over 23 million), Metito (supply of valves, 159,000 euros) and JNC International (for designing a park in Suq Al Tulata in Tripoli, more than 1 million dollars).
The company of CK Technology, which sells shooting range equipment, appeared on the list in Reynders’ letter (more than 3 million euros for shooting range equipment). However, director of CK Technology, Sophie Dardenne, said that her company never carried out business in Libya.
She said that CK Technology signed a contract, which was not executed, with the Libyan state for €4.2 million. It received an advance of €600,000, an amount she said remains blocked in a bank account due to international sanctions.
“This money is blocked but as the contract was not executed it’s logical that it is reimbursed at some point,” she said, adding that the contract was originally for gear designed to protect Libyan security forces.
It is unclear, however, whether any of the money ultimately released from the Libyan accounts by Belgium was used to pay these specific debts. David Maréchal, a spokesperson for Reynders, said the minister has no knowledge of any decision to unfreeze the funds or whether Belgian businesses had been paid.
“We don’t know anything. It’s not the foreign affairs minister that would know this,” he said. “The foreign affairs ministry does not unblock money.”
In a letter on February 12 this year to Eric Van Rompuy, chairman of the Belgian parliament’s finance committee, Reynders played down any link between unfreezing of funds and the debts owed to companies in Belgium. He also sought to pass responsibility to the finance ministry.
Referring to the letter to Ben Khayal, Reynders said: “I want to draw your attention to the fact that this letter was written during a period and in a context in which, in accordance with the applicable rules, the possibility to unfreeze these funds for humanitarian projects in favor of the Libyan population was being studied. That required, however, the cooperation of the Libyan authorities,” Reynders wrote. “I also take the opportunity to repeat once more that the freezing or releasing of funds in Belgium falls under the competence of the finance minister.”
The emergence of Reynders’ 2012 letter is the latest development in an ongoing domestic and international battle over funds belonging to the Libyan Investment Authority (LIA) but located in Belgium.
Several international media reports accused the Belgian government of financing Libyan militias involved in human trafficking through frozen Libyan assets.
The United Nations Panel of Experts on Libya said in a final report in September 2018 that the payment of interest and other income contradicted the decision to freeze Libyan assets in general and violated sanctions on Tripoli.
Both the Belgian government and the Libyan Investment Authority (LIA) denied any wrongdoing.