Updated 7 August 2014. What can and can't be sold to Libya? This summary analysis looks at Libya's political, economic and business climate, its defence and security equipment needs, what is exempt from the UN and EU Embargoes (much more than you might think), what other export control issues might be relevant, what specifically has been approved for export recently and how to avoid delays with an export licence application. We can provide similar or more detailed analyses for all emerging markets, tailored to specific types of goods, and can help exporters navigate the UK export controls process.

1. Libya
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2. Libya: Headlines
 Political instability- five governments since the 2011 revolution -
autonomous militias, high levels of insecurity, large volumes of
unsecured light weapons, long uncontrolled borders
 Strong UK and Western political support and stake in promoting stability
and democratic reform following the NATO intervention
 UN Arms Embargo, with exemption for goods intended ‘solely for
security or disarmament assistance to the Libyan authorities’.
 In 2013, total value of licensed goods (excluding Open Licences):
£23.7m
 Concerns on human rights, internal conflict and risk of diversion e.g. to
militias or to Islamic radicals in the wider region. Given current crisis,
diversion has become a key risk
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3. 1.Political
2.Economic
3.Doing Business/Travel
4.UK Relations
5.Criteria Concerns
6.Recent Exports
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4. Political
 A former Roman colony originally inhabited by Berbers and settled
by Phoenicians, Libya saw invasions by Vandals, Byzantines, Arabs,
Turks and more recently Italians before gaining independence in
1951. Oil was discovered in 1959.
 Col Gaddafi came to power by overthrowing King Idris in a coup in
1969.
 In 2011, his autocratic government was brought to an end by a six-
month uprising and ensuing civil war.
 The UN Security Council passed a resolution authorising Nato air
strikes to protect civilians. After months of near-stalemate, the rebels
stormed into Tripoli August 2011
 In October, the main opposition group, the National Transitional
Council (NTC), declared the country to be officially "liberated" and
pledged to turn Libya into a pluralist, democratic state.
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5. Political
 The transitional government had the challenge of imposing
order, disbanding the former rebel forces, rebuilding the
economy, creating functioning institutions and managing the
pledged transition to democracy and the rule of law.
 One of the biggest challenges facing the new authorities is
the plethora of armed groups - some originating in the anti-
Gaddafi rebellion, others newly arisen - who have defied
attempts to disarm them, and have caused concerns about
the prospects for stabilisation.
 in March 2014, an oil tanker's defiance of a Libyan navy
blockade of a rebel-held port led to the fall of Prime Minister
Ali Zeidan.
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6. Political
 In June 2014, new Parliament elected
 But the Government is paralysed; and powerless to respond to
crises
 Fighting between rival militias – one established by the outgoing
parliament (with hardline Islamists in its ranks) and two funded by
the defence ministry - has spread northwards in the capital in
recent days.
 More than 200 people have been killed in Tripoli and the eastern
city of Benghazi in the past two weeks.
 UK and other Embassies closed and advised against all travel
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7. Political
 With no effective army to subdue the growing influence and
rivalry of militias, the country is trapped in a cycle of battles
risking civilian lives
 Tripoli has become a battleground. Tripoli's main airport,
which is the centre of the latest conflict, resembles a scrap
yard
 The only good news is that the export of crude oil is
gradually rising after almost a year of oil terminal blockades
by militias - up to some 500,000 barrels a day from a trickle
a couple of months ago
 But the distrust and absence of accountability means it will
be hard to contain the militias - up to 1,700 groups. Once
united in opposition to Gaddafi, now fighting for territory
and influence
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8. Economy
 Libya holds the largest proven oil reserves in Africa and
10th largest in the world: 47 billion barrels, close to
Europe, with low production costs and refineries close to
the oil fields. Also significant natural gas reserves – 3rd
largest in Africa. Oil and gas production accounts for 70%
of Libya’s GDP, 80% of government revenues and 95% of
its foreign export earnings.
 Libya’s significant reserves, high global oil prices and
Sovereign Wealth Fund estimated to be between £30-50
billion should enable the government to fulfill its financial
commitments
 As a result of the civil war, the economy contracted by -
61.4% in 2011. However the real GDP growth recorded an
increase of 92% in 2012 as oil production recovered and
reconstruction took hold.
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9. UK/Libya Trade
 UK has close political and defence relationship with the Libyan
authorities, including on security concerns.
 Recent political and security issues have in the short term
reduced both Libyan readiness to do business and British
companies’ readiness to pursue it
 market access issues affecting foreign companies, including
transparency, opaque bureaucracy, changing regulation,
ongoing security issues and resultant FCO travel advice
 However, on the upside these issues create opportunities.
Developmental and reconstruction needs remain enormous.
Libya has a small population, with significant state owned
wealth.
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10. Defence and Security Requirements
 police and army are underequipped, poorly trained, and some officers
are tainted with the Qadafi era
 Significant tensions over competing concepts for the Disarmament,
Demobilisation and Re-integration (DDR) of militias; specifically
between the ‘one Army and one Police’ policy (backed by the main
political parties) into which the Thuwwar (revolutionaries) are to
integrate on an individual basis, and the eastern Islamist-led concept
of a ‘third force’ for those who wish to retain their own identities
 The need for equipment & expertise in Libya is critical, particularly to
secure borders as internal and border security are poor and illegal
migration/smuggling are high. Libya borders a number of countries
where terrorist groups are active
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11. Defence & Security Requirements
There are a number of significant defence and security opportunities in
Libya for the short, medium and long term:
 Border security is a high priority for the Libyan government. Acquiring
the necessary equipment and training to secure Libya’s vast land, air
and sea borders is vital to the stability and future development of Libya.
 internal security
 re-equipping and associated training for the Air Force, Navy and
Army
 The Ministry of the Interior and the Police require advice, equipment
and assistance in all sectors and are keen to engage with the UK
 English language training is of great importance to Libya and is a key
requirement for most training packages requested by the Libyans
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12. Doing Business
Although the business climate in Libya is improving, obstacles remain e.g.
 bureaucracy, corruption, lack of clarity and transparency in the decision-
making process, poor tax administration and the slowness of the Libyan judicial
system. Libya still has under-developed infrastructure and no public transport
 Many companies do not have websites; there are few major projects properly
advertised except in the oil & gas sector; there are only a handful of private sector
Libyan corporates.
 absence of a level playing field for all companies, both Libyan and foreign;
 Increased commercial competition: all the world wants to share Libya's wealth;
 Information, whether statistics, data about institutions, contact information or
anything else, remains very hard to find.
 Ministries with little experience of specification writing, tendering and
procurement
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13. FCO Travel Advice: Don’t
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The FCO advise against all travel to Libya
British nationals in Libya are strongly urged to leave immediately
 fighting between militias has spread in a fairly fluid manner northwards
in Tripoli, including into the area where the British Embassy is situated.
the risks of being caught in crossfire have markedly increased in those
areas to which the fighting has spread.
 On 13 July 2014, Tripoli International Airport was closed following
clashes that broke out between armed groups in the area surrounding
the airport.
 There is a widespread and worsening shortage of petrol and lengthy
queues at fuel stations are common.
 Since December 2013, a number of foreign nationals have been shot
dead in Libya. Further attacks against foreigners are likely and could
be opportunistic.
 There is a high threat from terrorism including kidnapping. Since
January 2014, a number of foreign nationals have been kidnapped,
including in Tripoli.

14. Export Licensing Criteria Concerns
1. UK’s International Commitments (DECC, FCO, MOD)
2. Human Rights and Internal Repression (FCO)
3. Internal Situation of recipient country (FCO)
4. Regional Stability (FCO)
5. National Security of UK and allies (MOD, CESG)
6. Behaviour of recipient country (FCO)
7. Diversion (FCO, MOD)
8. Economic Sustainability (DfID)
+ Other Factors – commercial, political, strategic
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Criteria 1-4 are
mandatory

15. Criterion 1: UN & EU Arms Embargoes
 Following the conflict in 2011, the country is still subject to:
• UN arms embargo on all Military Listed goods: covers the sale, supply, transfer
of the ML equipment, as well as financial assistance, technical assistance,
training or other assistance, including the provision of armed mercenary
personnel, related to military equipment or to military activities.
• EU embargo on “internal repression items” that are not Military Listed (check
the Council Regulation Annex)
• Financial Sanctions: see HMT’s list of individuals and entities
 Importantly, there are exemptions
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16. Criterion 1 continued: UN Embargo
Exemptions
1) non-lethal military equipment intended solely for humanitarian or
protective use, and related technical assistance or training. No
notification required
2) Items temporarily exported by UN personnel, media, humanitarian
and development workers for their personal use only. Protective
clothing: no notification. Small arms, light weapons: notify for no
objection
3) arms and related materiel, including technical assistance, training,
financial and other assistance, intended solely for security or
disarmament assistance to the Libyan authorities. Non-lethal: no
notification. Lethal items: notify for no objection.
4) Other sales or supply of arms and related materiel, or provision of
assistance or personnel. Requires Sanctions Committee approval
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17. Criterion 2: Human Rights
 The Libyan authorities have made repeated public
commitments to human rights
 But there is a serious lack of capacity in the Libyan
system to deliver on such commitments and they are
yet to translate into tangible improvements and/or
investigations into past abuse
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18. Human Rights Concerns
a) the presence of assimilated and unassimilated militias under partial or
minimal Government control. There is no popular support for an islamist
or militia takeover of Government positions
b) the centrally-controlled military and police have little training in the use
of certain types of equipment, in human rights or IHL, including practical
training on how to act with legality, proportionality and necessity. They
lack robust command and control structure and would struggle to
control protests (likely to continue). However, to date, violations have
been caused predominantly by poor adherence to centralised
instruction, and a lack of training and equipment, not systematic abuse.
c) Detention facilities: compelling UN and Amnesty evidence of torture
and ill-treatment, and arbitrary arrest and detentions of migrants, human
rights activists and former Qadhafi loyalists.
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19. Human Rights: Mitigations
 Some reassurance may be provided by the technical specifications of the
equipment, particularly if it suggests that it is most likely to be used only by
groups under central government control, and the absence of any reports of its
being used in violations to date
 goods under the control of the Prime Minister’s Office are unlikely to be
misused. Its staff are some of the most trained/aware people in Tripoli with
regards to human rights.
 The UK has included several human rights projects (including relevant training)
in its package of proposed support to the new Libyan Government. Training has
already been given to the police, though none has been specifically on crowd
control. UK funded training for the army has not focussed on human rights or
crowd control.
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20. Criterion 3: Internal Tensions
 There are ongoing tensions as former militia members are
brought under government control and integrated into the
regular armed forces/police.
 HMG has to judge whether an export might exacerbate
internal conflict and be used by some groups against others
 Unlikely to do so if exports will be under the control of the
central government. Such equipment should increase the
ability of the military and police to exert control over hostile
militias and borders, and therefore exacerbation of internal
conflict through this equipment would be unlikely.
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21. Criterion 7: Diversion
 Risk of diversion to militias, through theft or
intentional release, corrupt police/army personnel,
capture of equipment by un-assimilated militias, or
distribution of goods from the MoI/MoD to poorly
controlled assimilated militias.
 Formerly, police and army have a strong record in
retaining equipment provided to them.
 But under current circumstances, this risk could lead to
more refusals
 hard to control borders and clamp down on radical Islamic
groups operating in, through and out of Libya into the
Maghreb and Sahel. Recent attacks in Mali and Algeria
have highlighted the Libyan authorities’ lack of capacity
and capability; they do not have control of their borders
and many of the weapons used by militants in Mali were
sourced in Libya.
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22. Libya: Licensing Statistics
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2013 57 £27.3m 4 n/a

23. Licence Approvals and Refusals
APPROVALS
- Technical assistance
- Personal protective equipment
- Disarmament
- Civil end use
- APCs
- Military technical assistance
- (more detail bellow)
REFUSALS
- Equipment for armed groups outside
direct central government control
- Body armour, military helmets
- IMSI grabbers, radio surveillance eqmt
- UAVs
- Military image intensifiers
- Demonstration equipment to Benghazi
- Imaging cameras – under Embargo
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24. Libya Approvals 2013
 Equipment for initiating explosives
 Bomb suits
 Munitions detection/disposal eqmt
 Military communuications equipment
 Eqmt employing cryptography
 Assault rifles, Pistols, hand grenades
 Small arms ammunition
 AWD vehicles with ballistic protection
 UAVs
 Pyrotechnic ammunition
 Military thermal imaging eqmt
 NBC detection eqmt
 Military field generators
 Laser weapon systems
 Combat shotguns
 Military support vehicles
 IED jamming eqmt
 Command & Control/comms eqmt
 Civil NBC protection eqmt and clothing
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25. What can you do to help?
 For Government end users – any specific unit?
 Website details for civilian end users
 Exactly what does the end user require this equipment for? Do they have any
involvement with international training?
 Detailed information on the equipment specs (especially in F680s)
 End user Undertaking signed by head of MOD/MOI
 Delays may be caused by the need to get confirmation from the Libyan
government and approval from the Sanctions Committee
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26. Any questions?
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Richard Tauwhare
Green Light Exports Consulting
Email: richard@greenlightexports.co.uk
Web: www.greenlightexports.co.uk
Phone: +44(0)770 311 0880