Important Reminder: new contractual obligation under Article 107 of the new ACR 600-2024

Important Reminder

NOTE: The previous ACR 563-2007 did not impose this obligation.

English translation of Article 107 (Paragraph 3) of the new ACR 600-2024: Within the framework of its social responsibility, the foreign contractor undertakes to allocate no less than 2% of the expected net profit derived from the execution of the contract to support healthcare, social, and cultural welfare, and similar community initiatives within Libya.

In the case of a Joint Venture (between two companies), each respective party to the venture shall be independently obligated to allocate no less than 1% of its share of the expected net profit toward these initiatives.

Non-compliance with Article 107 of the Libyan Administrative Contracts Regulation (ACR) No. 600 of 2024 may result in direct financial penalization, project suspension, potential termination, and strategic exclusion from future public sector contracts. Under Libyan administrative law, Corporate Social Responsibility (CSR) obligations are treated as mandatory contractual terms, meaning a breach gives the contracting public entity immediate executive power to enforce compliance or levy administrative sanctions.

The breakdown of specific financial and legal ramifications under the latest regulatory framework includes the following:

Financial Ramifications

• Withholding of Contractual Progress Payments: The public entity will freeze or delay your ongoing invoices and progress payments until the required 2% allocation (or 1% for joint ventures) is documented and paid.
• Direct Administrative Deduction: The contracting authority holds the legal authority to deduct the unallocated CSR percentage directly from your final accounts, performance bonds, or cash deposits.
• Unilateral Security Liquidation: Your performance bank guarantees and final security bonds can be partially liquidated by the administration to cover the unfulfilled CSR monetary value.
• Loss of Cost-Saving and Performance Bonuses: Non-compliant contractors forfeit their eligibility for the lucrative performance incentives introduced by the ACR (Article 139), such as the 2% early-completion bonus or the 25%–50% cost-saving capital rewards.

Legal and Administrative Ramifications

• Unilateral Contract Rescission: Under Libyan administrative law, the state entity can legally terminate the contract for a breach of core regulations without needing to obtain a prior court order or judicial ruling.
• Execution at Contractor’s Expense: The public authority can step in, allocate the funds to the local healthcare or social welfare initiatives directly, and bill the contractor for all administrative overhead and operational costs.
• Official Registry Blacklisting: The breach is recorded in your corporate profile with the Ministry of Planning and the Privatization and Investment Board (PIB), lowering your corporate classification tier and banning you from bidding on future public sector tenders.
• Mandatory Oversight Auditing: The public entity must formally report the non-compliance to the Libyan Audit Bureau and the Ministry of Finance, triggering mandatory, comprehensive financial audits of your entire local operation.

Below is the link to download the English translation of the new ACR 600-2024 (Google Drive):

https://drive.google.com/drive/folders/1_VsRnlCqN5cOcPZVbOKZY-lnlVueBBcC?usp=drive_link

Note: The available English translation is provisional and intended for informational purposes only; it may not completely reflect the source text with precision. A finalized version is currently being prepared for upload. Should you require an official, accurate translation of particular Articles, please contact me, and I will fulfill your request expeditiously.

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Mandatory LAB approval for public works contracts exceeding LYD 5 million

Summary: Libyan Audit Bureau Circular No. (2) of 2026 mandates that government bodies obtain prior approval for contracts exceeding LYD 5 million. LAB also urges all financial institutions and banks responsible for fund disbursements or transfers not to process any payments for contracts exceeding five million dinars unless LAB approval is attached. Furthermore, entities must ensure that contracts or transfers are not split to evade the LAB's financial oversight threshold. For more details, refer to the official circular issued on May 5, 2026 (provided in the link below):

https://lawsociety.ly/legislation/%D9%85%D9%86%D8%B4%D9%88%D8%B1-%D8%B1%D8%A6%D9%8A%D8%B3-%D8%AF%D9%8A%D9%88%D8%A7%D9%86-%D8%A7%D9%84%D9%85%D8%AD%D8%A7%D8%B3%D8%A8%D8%A9-%D8%B1%D9%82%D9%85-2-%D9%84%D8%B3%D9%86%D8%A9-2026-%D9%85-%D8%A8/

Note: Please let me know if you would like a full English translation of the circular.

CBL Decision No. 1-2026: Cash Limits Requiring Declaration

Decision No. (1) of the Central Bank of Libya for the year 2026: Regarding the amendment of the upper limit on amounts that must be declared upon entry into or exit from Libya

Issuance Date: April 23, 2026

Notice on Cash and Currency Disclosure
Pursuant to Decision No. (1) of 2026 issued by the National Committee for Combating Money Laundering and Terrorist Financing regarding currency declaration thresholds for travelers entering or leaving Libya:

• Foreign Currency (Entry): Travelers may bring in up to $30,000 USD (or its equivalent in other foreign currencies).
• Foreign Currency (Exit): Travelers may take out up to $5,000 USD (or its equivalent in other foreign currencies).
• Local Currency (Entry/Exit): Travelers may bring in or take out up to 1,000 Libyan Dinars.

Mandatory Declaration Requirement
Any amounts exceeding these limits must be formally declared by completing and submitting a Currency Declaration Form to the competent customs officer.

Warning: Failure to declare funds exceeding these thresholds constitutes a customs violation and subjects the offender to legal liability under applicable laws.

Below is the link to the full text of the Decision:

https://customs.gov.ly/%d8%aa%d9%88%d8%ac%d9%8a%d9%87%d8%a7%d8%aa-%d8%b9%d8%a7%d9%85%d8%a9-%d9%84%d9%84%d9%85%d8%b3%d8%a7%d9%81%d8%b1%d9%8a%d9%86-%d8%b9%d8%a8%d8%b1-%d8%a7%d9%84%d9%85%d9%86%d8%a7%d9%81%d8%b0-%d8%a7%d9%84/