Guidance

Financial sanctions guidance for Libya

Updated 18 March 2025

This guidance is produced by the Office of Financial Sanctions Implementation (OFSI), part of HM Treasury, the authority for the implementation of financial sanctions in the UK.

This should be considered supplementary to, and not a replacement for, OFSI’s general guidance. Further sources of information that may prove helpful can be found at the end of this guidance.

This guidance does not represent legal advice.

If you are unsure about your obligations in a given case, you should consider seeking independent legal advice.

1. What are financial sanctions?

Financial sanctions help the UK meet its foreign policy and national security aims, as well as protect the integrity of its financial system. Financial sanctions include restrictions on designated persons, such as freezing financial assets, as well as wider restrictions on investment and financial services.

Financial sanctions are organised into geographic and thematic regimes. You should consider your exposure to thematic regimes, even if you are operating in a jurisdiction not subject to a geographic regime.  

For general information on financial sanctions, your obligations, and licensing, OFSI provides general guidance available here.

2. The scope of UK financial sanctions

The global nature of the maritime sector means it is important to be aware of the wide-reaching scope of UK financial sanctions.

UK financial sanctions apply to all persons within the territory and territorial sea of the UK and to all UK persons, wherever they are in the world.

This means that:

• all individuals and legal entities who are within or undertake activities within the UK’s territory and territorial sea must comply with UK financial sanctions that are in force
• all UK nationals and legal entities established under UK law, including their branches, must also comply with UK financial sanctions that are in force, irrespective of where your activities take place

3. Understanding the Libya Regulations

The Libya (Sanctions) (EU Exit) Regulations 2020 (the Regulations) impose financial, trade, aircraft, shipping and immigration sanctions for the purpose of complying with the UK’s obligations pursuant to the sanctions regime set out in the United Nations Security Council resolution (UNSCR) 1970 (2011) as well as subsequent UNSCRs.

The Regulations also have the additional purposes of promoting respect for human rights in Libya, the peace, stability and security of Libya, the successful completion of Libya’s political transition to a democratic, independent and united country, and preventing migrant smuggling and human trafficking taking place from Libya.

The Sanctions and Anti-Money Laundering Act 2018 (the Sanctions Act) enables regulations to be made by the UK imposing sanctions to implement either the UK’s obligations pursuant to the UNSCRs or the additional purposes referred to above.

Certain parts of the Regulations entered into force on 30 December 2020 (the remainder entered into force on 31 December 2020) and replace EU sanctions relating to Libya.

3.1 How can this guidance help me?

This guidance aims to help stakeholders navigate the Regulations that specifically apply to the Libya financial sanctions regime. As well as a full asset freeze, the Regulations impose other prohibitions and requirements including a partial asset freeze (only the Libyan Investment Authority (LIA) and the Libya Africa Investment Portfolio (LAIP) have been designated in respect of this), and prohibitions on financial transactions in relation to Libyan oil aboard UN-designated ships.

In addition, the Regulations establish an enforcement mechanism through the creation of offences and penalties. These are set out in detail in the corresponding report under section 18 of the Sanctions Act.

While the Regulations impose different types of sanctions, this guidance, produced by OFSI, only covers financial sanctions.

The UK government has published statutory guidance to accompany the Regulations. This covers the wider restrictions detailed in the Regulations, including immigration and trade sanctions. It should be read alongside this guidance.

4. Asset freezes

4.1 Full asset freeze

The Regulations detail financial prohibitions in relation to Designated Persons (DPs). These are persons (natural or legal) who are subject to sanctions including financial prohibitions. These prohibitions consist of asset freezes along with restrictions on making funds and economic resources either directly or indirectly available to DPs, or to any person for the benefit of DPs. As well as DPs themselves, these prohibitions apply to persons owned or controlled by DPs.

4.2 Partial asset freeze

The Regulations also impose a partial asset freeze. This prohibits persons (including DPs) dealing with “relevant funds or economic resources” owned, held or controlled by persons designated for the purposes of the partial asset freeze (the LIA and the LAIP). “Relevant funds or economic resources” are defined in the Regulations as:

• those located outside Libya immediately before 17 September 2011
• funds credited on or after 17 September 2011 to a relevant account in discharge (or partial discharge) of an obligation which arose prior to the date on which the person became a DP
• any interest or other earnings on the funds referred to above credited on or after 17 September 2011 to a relevant account

There are also prohibitions on making relevant funds available (directly or indirectly) to the LIA and LAIP and on making relevant funds available to any person for the benefit of the LIA and LAIP. For the purposes of those prohibitions, relevant funds are defined as:

• interest or other earnings due on funds held in a relevant account which are frozen by virtue of the partial asset freeze
• funds due to a designated person by virtue of an obligation which arose prior to the date on which the person became a DP

Unless licensed by OFSI or subject to an exception, the above must be frozen when credited to a relevant account and must not be made available to DPs.

This includes interest or other earnings that have previously accrued or continue to accrue on relevant funds in the future. Failure to freeze relevant funds (including interest or other earnings) and making available relevant funds due to a DP (either interest or other earnings due on funds frozen under the partial asset freeze or funds due under a pre-designation obligation) is an offence which may result in civil or criminal enforcement action.

There is no prohibition on making economic resources and non-relevant funds available to, or for the benefit of, those designated for the purposes of the partial asset freeze (the LIA or the LAIP).

4.3 Subsidiaries of the LIA and LAIP

Both the LIA and the LAIP are subject to the partial asset freeze. Subsidiaries of the LIA and LAIP are not automatically subject to the partial asset freeze simply by virtue of being subsidiaries of these companies. However, it should be noted that some subsidiaries of the LIA and LAIP are designated independently by the UK under the full asset freeze, set out in the Regulations. Therefore, it is advised that you consult the OFSI consolidated list, and that you conduct your own due diligence to understand whether any such subsidiary is subject to financial prohibitions.

5. Exceptions and licences

There are exceptions to some of the asset freeze, partial asset freeze, and making available prohibitions under certain defined circumstances. Exceptions apply automatically and do not require you to obtain a licence from OFSI. These exceptions include:

• a relevant institution crediting a frozen or relevant account with interest or other earnings due on the account
• a relevant institution crediting a frozen or relevant account where it receives funds transferred to that institution for crediting to that account
• when funds are transferred to a relevant institution for crediting to an account held or controlled by a DP in discharge (or partial discharge) of an obligation which arose before the DP was designated

These exceptions require that all such funds (including any interest or other earnings) must not be made available to or for the benefit of DPs and should be credited to a frozen account, relevant account, or an account held or controlled by a DP as appropriate at which point they must be frozen. Where no exceptions apply, the DP or a representative may apply for a licence from OFSI to be able to, in certain circumstances, deal with funds or economic resources frozen under the full or partial asset freeze, or to allow for funds or economic resources or relevant funds, to be made available to or for the benefit of DPs.

Licences can be issued for additional purposes for the LIA and LAIP, as well as for those purposes applicable to other DPs. Additional purposes include for the provision of fuel for civilian use and the resumption of banking sector operations. For full details of the licensing grounds that apply, refer to the Regulations.

For further information on asset freezes, see OFSI’s general guidance.

6. Oil aboard UN-designated ships

The Regulations set out a prohibition on financial transactions relating to Libyan oil aboard vessels designated by the UN.

This includes all petroleum, crude oil and refined petroleum products that originate from Libya.

The prohibition of financial transactions in this context includes purchasing or the sale of oil, its use as credit or taking out transport insurance in respect of it. However, this does not include the payment or receipt of any fees following the entry into port of a ship carrying that oil.

7. Ownership and control

Entities that are majority owned or controlled, directly or indirectly, by a DP are subject to the financial prohibitions applying to the DP including an asset freeze but may not appear on the OFSI consolidated list. Regulation 7 sets out that ‘owned’ or ‘controlled’ includes both direct and indirect ownership or control. If the ultimate ownership or control of an entity rests with a DP (for example, they own a corporate body which owns another corporate body). OFSI takes the view that all entities that are part of the ownership chain are subject to financial sanctions (with the exception of some LIA and LAIP subsidiaries - see above).

Entities can have complicated ownership structures, where it may not be immediately clear if a DP holds ownership (beneficial or otherwise). Both OFSI guidance and the Regulations provide a framework to assist in determining ownership and control.

Article 7 of Council Regulation (EU) 2016/44 has not been reflected in the Regulations. Ownership and control criteria as explained below should be applied when considering whether to undertake dealings with a DP or its subsidiaries.

8. OFSI consolidated list and the UK Sanctions List

The OFSI consolidated lists reflect all financial sanctions designations made under UK legislation (the Sanctions Act and the Antiterrorism, Crime and Security Act 2001), but do not include those subject to other forms of sanctions such as immigration, trade or transport. The consolidated lists consist of a consolidated list of financial sanctions for those subject to asset freezes and a separate list for those subject to restrictions on financial markets and services.

The UK Sanctions List, published by the Foreign, Commonwealth and Development Office (FCDO) on GOV.UK, is the comprehensive list of persons, entities or ships designated under sanctions regimes set up using the powers of the Sanctions Act. The restrictions applied to such persons, entities or ships can include financial, immigration, trade or transport sanctions.

9. Compliance

Any person carrying out or involved with activities involving maritime shipping should be aware of the risks posed and the consequences of failure to ensure compliance.

Breaches of financial sanctions are a serious criminal offence.

OFSI is responsible for monitoring compliance with financial sanctions applicable in the UK and for assessing suspected breaches of the regulations. OFSI has powers under the Policing and Crime Act 2017 to impose monetary penalties of up to 50% of the value of the breach or up to £1 million, whichever is higher, for breaches of financial sanctions.

OFSI can also refer cases to law enforcement agencies for investigation and potential prosecution. Breaches of financial sanctions are considered a serious criminal offence and may be subject to custodial sentences. Offences relating to the principal prohibitions under UK financial sanctions carry a maximum of:

• 7 years imprisonment on conviction on indictment (applying to all of the UK)
• 12 months imprisonment in England and Wales on summary conviction (or, in relation to offences committed before section 154(1) of the Criminal Justice Act 2003 comes into force, 6 months)
• 12 months imprisonment in Scotland
• 6 months imprisonment in Northern Ireland

 For exact penalties, please refer to the relevant legislation. 

Financial sanctions are part of a wider sanctions framework targeting illicit activity. As such, OFSI works with other parts of government, supervisory bodies and regulators to consider all reported noncompliance, and shares relevant information accordingly in line with the relevant sanctions and data protection legislation.

For further information on enforcement and compliance, you should consult OFSI’s general guidance and its enforcement and monetary penalty guidance.

10. Further support

For further support with UK financial sanctions, you can:

• Consult OFSI’s general, geographic and sectoral guidance
• Access OFSI’s webinars for maritime and shipping
• Sign up to get UK sanctions email alerts.
• Email OFSI on ofsi@hmtreasury.gov.uk

OFSI works closely with the Export Control Joint Unit, which sits in the Department for Business and Trade. OFSI deals with financial sanctions and the Export Control Joint Unit with export-related trade sanctions.

For more information on export controls, please visit the Export Control Joint Unit.