According to public broadcaster RTBF, which cited anonymous sources familiar with the money flows, the money may have gone to accounts controlled by Libyan militia groups that have been accused of human rights abuses.
Back in 2011, as NATO bombs were falling over Tripoli, the United Nations voted to sanction Libya and freeze all assets belonging to the Gaddafi regime that were being held abroad.
As Politico explained, the regime had spread its capital across Europe and North America, investing in companies as diverse as the Italian bank UniCredit to the British publisher Pearson. But Brussels-based Euroclear, which had custody of four of the regime-linked accounts, chose not to halt the interest payments flowing out of those accounts. That’s because in the EU, where national governments were charged with enforcing the sanctions, it was decided that only the assets themselves would be frozen, not the interest payments stemming from those assets.
Instead, capital continued to flow from these assets into accounts controlled by the Libyan Investment Authority, a nebulous quasi-state affiliated organization that controlled the seized assets when Gaddafi was still in power. These interest payments stemmed from stock dividends, bond coupon payments and other sources of revenue. So far, Belgian authorities have denied any responsibility for allowing the loophole in the sanctions regime. Belgian Foreign Minister Didier Reynders told reporters on Tuesday that he wasn’t involved in the decision to unblock interest on deposits.
Since then, Libya has fractured into separate fiefdoms ruled by competing warlords. A UN-recognized government still rules in Tripoli, while a rival administration has seized power in the eastern port of Tobruk, across the country, Islamist insurgencies also contribute to the instability.
While Gaddafi’s wealth is meant to be held in trust for the Libyan people until the war-shattered country stabilizes, interest payments flowed from frozen accounts in Brussels to bank accounts in Luxembourg and Bahrain over recent years.
The LIA’s finances remain murky, and the only aspect of this situation that is clear is that the interest payments are going to someone. But the individual or individuals who ultimately control the disparate LIA accounts remain a mystery. Though we’d be willing to wager that, whatever the money is being used for, it has nothing to do with the welfare of the Libyan people.