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Keep Libya’s assets frozen to keep us safe

By Patrick Basham - posted Thursday, 13 July 2017

Combating terrorism in Libya was the timely subject of a recent UN meeting in New York. Libya’s status as an exporter of terrorism was reaffirmed when Western intelligence officials established that Manchester suicide bomber Salman Abedi met with Islamic State contacts in Libya, his parent’s home country, before returning to England in late May to murder 22 people at a pop concert.

Abedi should serve as Exhibit A in the case against unfreezing the $67.5 billion in Libyan Investment Authority (LIA) assets held in foreign banks since the overthrow of the late dictator, Muammer Gaddafi, six years ago. The unfreezing of LIA assets is being actively discussed both inside and outside Libya, according to government officials speaking on condition of anonymity.

Libya’s assets were seized under respective American and EU directives and are frozen under a UN Security Council resolution that makes it illegal to sell off assets, redeploy funds, or return them to the Libyan people until a strong, stable, democratic government is formed. It would be incredibly naïve for policymakers to ignore the very high probability that a substantial proportion of the unfrozen asset pool would be ultimately transferred into the coffers of Libyan-based Islamic terrorists.


After the revolution that overthrew the Gaddafi regime, the Libyan state collapsed. Libya has been chaotic ever since.  In fact, the situation has gone from bad to worse, with the country racked by civil war and political power struggles, and with her ungoverned spaces growing. Due to its easier transport routes across the Mediterranean, Libya is now the main hub for illegal migration to Europe.

The past six years also have witnessed the rise of political and religious extremism. On the brink of failed statehood, Libya has become a haven for regional jihadists and their training camps. This is epitomized by the exponential growth of Islamic State’s Libyan branch, which carved out an area extending approximately 180 miles around the coastal town of Sirte, Gaddafi’s birthplace.

Islamic State’s Libyan branch is considered to be the most lethal outside the Levant. By early 2015, Islamic State had extended its presence to the Libyan Sahara. Consequently, in 2015 the internationally-recognized government was forced to leave the capital, Tripoli, where Islamist militias claimed authority. 

Last year, some assumed that the threat from radical Islamic terrorists would wane after militias allied to the UN-imposed Government of National Accord (GNA) removed Islamic State from its stronghold in Sirte. Yet, Islamic State still counts 500 militants while, in practice, Libya’s 3,000 total jihadists reflect tremendous membership overlap between Islamic State, al Qaeda, and other terrorist organizations.

The GNA is weak, with little influence beyond the capital, and has practically no control over southern Libya. Crucially, the GNA is unable even to challenge the power of those militias allied with it. For the past year, Libya has actually had three parallel governments, as the GNA is locked in power struggles with two rival governments in eastern and western parts of the country.

Unfreezing Libyan assets at this time would be highly irrational. Based upon the evidence of the past six years, it is clear that such funds would fuel further violence, domestically and internationally, and those funds not earmarked for violent ends would be stolen.


The Libyan people would be the least likely beneficiaries from the unfreezing of assets. Jihadi terrorists, political factions, and warring militias would reap the benefit of international naïveté over the probable destinations for, and uses of, the presently frozen funds.

With so much more money sloshing around an already corrupt political culture, even more bloodshed, domestic and international atrocities, human trafficking, and refugees are certainties. At that point, it is highly probable that Libya would devolve, and in very short order, from its present status as a failing state to actual failed state status.

The jihadist attack on Manchester vividly demonstrated the irrationality of assuming that unfreezing Libyan assets will bring peace. On the contrary, it will become that much harder to reconcile warring factions who would possess greater financial resources and, consequently, more fighters and more weaponry.

One way to limit the reach of Islamic State and al Qaeda’s Libyan branches is to deprive them of the funds that keep them fighting. Preventing these terrorists from strengthening their financial position will at least hamper their ability to spread additional levels of violence, death, and suffering throughout the West.

The UN meeting was a wake-up call for Western policymakers regarding Islamic State’s capacity for external operations. The likelihood that Libya’s unfrozen assets would fund further attacks upon Western targets should make one fearful of such an ill-advised policy change.

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About the Author

Patrick Basham directs the Democracy Institute and is a Cato Institute adjunct scholar.

Other articles by this Author

All articles by Patrick Basham

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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