How Much Do You Know About Embargoed Countries? Part 2

By Michael Jones (michael.jones@tsiglobalconsulting.com)

One country that can be confusing to deal with for those in the exporting business is Libya.  Under the dictatorial regime of Colonel Muammar Gaddafi, the U.S. classified the country as a “state sponsor of terrorism”: a label which led to the U.S. creating an embargo against Libya which would be enforced, with varying degrees of intensity, throughout his regime.  However, U.S. policy would change drastically after the 2011 Libyan Civil War.  With Gaddafi and his supporters gone and along with them, the main reason for antagonism in the first place, the U.S. began to form a partnership with Libya’s new civilian government.  Since this former dictatorship had fundamentally changed the core of its government, many thought that the U.S. would wipe the slate clean for its dealings with the new Libya.  However, this has not been the case: despite the government change, Libya continues to be the subject of trade restrictions by the U.S.

While perhaps not severe enough to constitute a full-blown “embargo,” the trade restrictions that the U.S. has with Libya still deserve some explanation.  As the situation currently stands, the goods that cannot be exported to Libya are primarily weapons.  Up until this summer, all armaments were prohibited: since then, the system has opened up to military training and non-lethal equipment, provided that the exporter goes through a long licensing process.  Certain lethal equipment can also be exported if its end use is for the security purposes by the Libyan government.  Additionally, there are some other restrictions as well surrounding the U.S.’s involvement in the freezing of the assets of the Gaddafi family and its supporters – exporters to Libya should take special care that they know who the end users of their products are.

On the surface, it seems strange that the Gaddafi-era restrictions on trade have persisted after the revolution’s end.  However, the situation starts to make sense when one takes into account the turbulence that Libya has been through in the last few years.  Immediately after the revolution, Libya had lost the stability that Gaddafi’s dictatorship had brought for so many years before: while he may have been a monster, Gaddafi at least kept his country out of the hands of groups like Al-Qaeda and other radicals – something which has been one of the U.S.’s top priorities for the region for the last decade.  While the new Libyan government does not seem to have been overrun by these extremists, events such as the attack on the U.S. embassy in Benghazi suggest that it is not yet capable of protecting American interests.  Without that reassurance, it is unlikely that the U.S. will fully open trade with Libya.

Despite being a risky choice for business, there are many opportunities for those who are looking to invest in exporting to Libya.  Contact TSI Global Consulting today at 210-757-0618 for a consultation to see if your company can do business with Libya or any other country around the world.

Please check back soon for the next article in this series, in which we will look at some of the reasoning behind the U.S. embargoes against more well-known countries.

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