Malta caught in diplomatic quarrel over seized counterfeit money to Libya

Malta has been caught in a diplomatic tug of war between Russia, the US and Libya over the seizure of $1.1 billion in allegedly counterfeit notes seized by the Maltese authorities.

The saga started when the US government issued a statement commending the Maltese government for the seizure of $1.1 billion counterfeit Libyan currency printed by a Russian state-owned-company called Joint Stock Company Goznak.

“The Central Bank of Libya headquartered in Tripoli is Libya’s only legitimate central bank.  The influx of counterfeit, Russian-printed Libyan currency in recent years has exacerbated Libya’s economic challenges,” the US Department of State said in the statement.

The counterfeit cash was seized by the Maltese authorities back in November 2019 and the shipment has been under lock and key ever since.

Now, the Russian government has denied reports suggesting that the Libyan money was counterfeit. The North African Journal quoted Russia saying, “we would like to note that under the conditions of de facto double power in Libya, there are currently two Central Banks”.

Libya is split between the internationally recognised Government of National Accord (GNA) in Tripoli and forces loyal to eastern-based Khalifa Haftar, who has waged a year-long bloody battle to try and capture the capital.

Russia said that Haftar had been properly elected, named by the Libyan parliament and had the required international recognition. Russia has been a supporter of Haftar’s incursions against the UN-recognised Government of National Accord based in Tripoli.

“What’s false are not these Libyan dinars but the American declarations,” the Russian government said.

The printing company Goznak issued a statement published on Russian news agencies saying that a UN committee had examined the delivery of cash but found no violation of sanctions against Libya.

The company also said the cargo was seized by Malta’s customs unit when it was on its way to Libya in September 2019, in breach of all norms.

In a December report to the UN Security Council, experts said the company had delivered the equivalent of $7.11 billion in Libyan money between 2016 and 2018 to the parallel Central Bank.

Meanwhile, the US has asked the Maltese government to keep the cargo as evidence of Russia’s backing of Haftar’s army while the UK has told Malta it should destroy the money.

Amid this global disagreement, Prime Minister Robert Abela paid a visit to Libya last week to sign a Memorandum of Understanding with the head of the GNA on migration. According to tthe MOU tabled in parliament by the Foreign Affairs Minister, Malta will ‘finance’ migration coordination centres in Tripoli and Valletta.

This followed reports of private jets flying in and out of Malta during the lockdown that Libyan media reported were related to western interests intervening in the country.