Libya's $200 Billion Frozen Fortune Remains Stuck in Legal and Political Limbo

Since the fall of Muammar Gaddafi's regime in Libya over a decade ago, Libyan assets remain frozen abroad, trapped by international sanctions and legal disputes.

While the Libyan Investment Authority (LIA), led by Ali Mahmoud Hassan, seeks to regain control over these funds, its efforts are thwarted by political and judicial obstacles, making the path to recovery fraught with challenges.

Under these circumstances, the LIA achieved a partial success with the UN Sanctions Committee on January 16, 2025, when it was granted the right to submit requests to the committee to retrieve looted funds on a case-by-case basis, with the committee holding the discretion to approve or reject them.

This marks a significant step in its efforts to lift the blockade on Libya’s frozen assets abroad since Gaddafi’s fall in 2011.

If an agreement with the sanctions committee is reached, the LIA will be allowed to invest its frozen cash reserves only in "fixed-term accounts" and "low-risk" instruments or in government bonds with fixed interest rates.

However, the profits from these investments will remain frozen, and the sanctions committee stipulates that these funds cannot be reinvested except in the same countries where they are currently held.

This raises several questions about the Libyan Investment Authority's ongoing battle to reclaim the country’s looted funds: What obstacles is it facing? What is the size of Libya's frozen assets? And where are these assets located?

Frozen Treasure

Following the fall of Muammar Gaddafi’s regime, the unknown became the defining theme for the approximately $200 billion of Libyan state funds that were frozen by a UN Security Council decision in March 2011.

Most of the efforts by the state, particularly the Libyan Investment Authority, to recover these funds have failed.

The ongoing political and economic uncertainty in Libya significantly reduces the chances of recovering these frozen assets, especially given the existence of two rival governments—one in Tripoli and the other in Benghazi—along with the division of the Libyan Central Bank between the east and the west.

The story of the frozen assets began when unrest erupted in eastern Libya against Gaddafi on February 17, 2011. At the time, the European Union and NATO, who supported the military campaign against Gaddafi, declared that loyalists of the regime could seize Libyan assets abroad to fund their opposition to the popular uprising.

In response, the UN Security Council convened twice, issuing resolution 1970 in its first session, which called for the freezing of all funds, financial assets, and other economic resources owned or controlled by Gaddafi’s regime.

The freeze specifically targeted assets belonging to Gaddafi himself, his daughter Ayesha, and his sons Saif al-Islam, Moatassem-Billah, Hannibal, and Khamis, as well as individuals or entities operating on their behalf or under their direction.

The resolution also emphasized that all UN member states must refrain from allowing any funds, assets, or economic resources to be made available to individuals or entities under sanctions.

Additionally, the Security Council froze the assets of five major Libyan institutions and financial entities: the Central Bank of Libya, the Libyan Investment Authority, the Libyan Foreign Bank, the Libyan African Investment Portfolio, and the Libyan National Oil Corporation.

On March 17, 2011, Resolution 1973 further confirmed the measures outlined in Resolution 1970.

Where is the Money?

Libyan local reports suggest that the publicly announced figure of $200 billion in frozen assets abroad is an underestimation of the true amount.

This assumption is based on various indicators, including the country’s revenue from energy resources such as oil and gas during Gaddafi’s four-decade rule, which could have reached up to $500 billion.

On August 2, 2024, the Libyan news outlet "Bawabat al-Wasat" reported that several major countries with close political and economic ties to the Gaddafi regime have yet to disclose any frozen Libyan funds or assets under their jurisdiction.

The report stated, "Therefore, the amount of money the UN Security Council instructed foreign governments to freeze is only the sovereign wealth, valued at $150 billion, in addition to 144 tons of gold. As for the remaining assets around the world, their whereabouts remain unknown."

"The United States leads in the amount of frozen Libyan funds, holding approximately $34 billion belonging to the Libyan Investment Authority, spread across a range of financial portfolios, each containing $500 million," the report added.

Following the U.S. is the UK, which has frozen around $19.2 billion belonging to Libyan individuals and entities. 

Italy ranks fourth with about $8 billion, while Germany has frozen Libyan assets, bonds, and funds estimated at $8 billion.

France, which led NATO’s intervention against Gaddafi, also froze around $11 billion in Libyan assets held by institutions in French banks. 

The Austrian central bank then announced it had frozen nearly €1.2 billion in Libyan assets deposited with Austrian institutions.

In March 2011, Canada revealed it had frozen about $2.4 billion, according to Reuters.

Furthermore, a report from the Libyan Investment Authority disclosed an investment portfolio worth $64.19 billion by the end of 2010, prior to the revolution. 

The authority also had foreign deposits totaling $20.2 billion, in addition to around $17.32 billion in deposits held at the Central Bank of Libya.

Libyan Investment Authority (LIA)

The Libyan Investment Authority (LIA) is the government entity entrusted with the task of reclaiming the country’s frozen assets abroad, engaging in legal battles with the governments, corporations, and banks involved.

The Libyan Investment Authority was established on August 28, 2006, by decree No. 208 issued by the former People’s General Committee (which was later replaced by the current Cabinet). 

The investment portfolio of the Libyan Investment Authority spans a wide range of sectors and asset classes, including agriculture, oil and gas, real estate, transportation, financial investments and their derivatives, industry and manufacturing, technology, media and communications, chemicals, utilities, entertainment, vehicles, consulting, and hospitality.

According to its official website, the LIA is considered the largest sovereign wealth fund in Africa, managing assets valued at over $68.4 billion across Africa, Europe, Asia, and North America, based on the most recent evaluation conducted in 2019.

The $15 Billion Battle

The Libyan Investment Authority (LIA) upholds a number of key principles through its online platform, including its mission to "preserve the wealth of the Libyan people entrusted to the authority, managing and growing it to secure a prosperous future for generations to come."

In its pursuit of this goal, the LIA achieved a significant victory on January 24, 2025, successfully recovering some of its frozen assets.

This was made possible by a ruling from the Brussels Court of Appeal, which lifted all judicial seizures imposed on the LIA's funds and assets held with the Euroclear Brussels financial services bank in Belgium.

The case in question revolves around €15 billion deposited with the bank.

Hassan Ali, the head of the Libyan Investment Authority, has made it a priority to bring the issue of the assets held in the Belgian bank accounts to the forefront of the institution’s agenda. 

Ali has been relentless in pushing this case as a matter of utmost importance.

This action is part of an ongoing legal battle between the LIA and Belgium at the International Centre for Settlement of Investment Disputes (ICSID), a dispute that has been unfolding since December 2023.

Libyan Asset Dispute

Libyan assets remain under judicial seizure following a decision by the Brussels Court of Appeal in July 2023, which appointed Euroclear Brussels as the custodian of these assets. 

The release of these funds requires a ruling from investigating judge Paul Gerard, who inherited the case from his predecessor, Michel Claise.

This seizure was part of a dispute between the Libyan Ministry of Agriculture and the Global Sustainable Development Fund (GSDT), a nonprofit organization founded by Prince Laurent, the brother of King Philippe of Belgium.

The case dates back to 2010, during the Gaddafi regime, when the Libyan Ministry of Agriculture terminated a contract for the replanting of trees with the fund established by Prince Laurent. 

The GSDT then sought €45 million in compensation, based on a final ruling from Belgian courts in 2015.

On another front, the Libyan Investment Authority is engaged in an equally fierce battle with HSBC Bank in Luxembourg. 

It is preparing to file a request to reinvest funds held in accounts at the bank’s Swiss branch in Luxembourg, despite facing significant internal challenges.

Political Obstacles

While recovering the frozen assets abroad since 2011 remains a primary priority for the Libyan Investment Authority and the Tripoli authorities, political divisions within the country continue to hinder the adoption of a unified approach to this issue.

The House of Representatives in Tobruk, in eastern Libya (which is internationally unrecognized), refuses to acknowledge Ali Mahmoud Hassan's legitimacy as the head of the institution.

Meanwhile, Mohamed Ramadan al-Mansali, the director-general of the Libyan State Funds Recovery Office, had been managing these matters until his arrest in early January 2025 by the Libyan Government's Anti-Organized Crime and Terrorism Force in Tripoli, under the leadership of Prime Minister Abdul Hamid Dbeibeh. His detention has been extended ever since.

Al-Mansali, a British national, faces charges of corruption and signing contracts without government authorization. 

His supporters, however, claim that his arrest is politically motivated, as he is closely aligned with the militia general Khalifa Haftar, who allegedly seeks to obstruct the work of the Libyan Investment Authority and undermine its role both domestically and internationally.

This situation has provided international actors and Western governments with a rationale for the continued freezing of assets, while pushing for the seizure of state assets.