2 January 2025: Internationals express concerns over independence of Audit Bureau
This week we look at efforts to relocate the Audit Bureau and replace its head, as well as concerns about Russia's transfers from Syria to Libya and the NOC's claims to have hit 1.4mbpd of crude.
Dear Libya Analysis LLC Newsletter subscribers,
Each week, we will continue to share for free our traditional newsletter content (one article from our Weekly Report on Libya and its overall table of contents, plus teasers and info on our other products) via Substack.
In addition, readers interested in accessing additional Libya content can subscribe to the Premium (pay for) version of the Substack which gives access to two additional subscriber-only Libya articles per week, drawn from our Weekly Report. These articles will cover key developments and analysis from that week, whether in the political, economic, security or energy sectors. The premium subscription also gives access to our premium archives.
Internationals express concerns over independence of Audit Bureau amid efforts to relocate the HQ, remove files and replace its head Shakshak
Incident: On 19 December, reports emerged that the Audit Bureau had been forced to relocate from its headquarters in the Dhara area of Tripoli to the Guest Palaces Complex in the Hay Dimashq area, with the Dhara HQ being cordoned off by armed groups and files being transferred to the new location.
The same day, the Deputy Head of the Tripoli-based Audit Bureau (AB) Atiyallah al-Saiti issued a clarification claiming that the Dhara building, leased from the General Maritime Transport Company, is not fit for use and that the Guest Palaces Complex was chosen through legal procedures approved by the Audit Bureau head Khaled Shakshak and is only a short-term lease. Saiti further added that the Dhara HQ was not cordoned off illegitimately but by the Facilities and Installations Security Authority with which the AB has concluded an official, legitimate contract to protect the AB. Finally, he said that only some files were transferred to the new building, noting this was with the approval of Shakshak, while also stressing that all files are digitalised anyway.
Shortly after the same day, UNSMIL issued a statement saying it was ‘deeply concerned about the escalating situation surrounding the National Audit Bureau, which poses a serious threat to the integrity of this sovereign institution. Tasked with safeguarding transparency, accountability, and good governance, the Audit Bureau’s operational independence must be upheld. UNSMIL urges all parties involved to respect the institution’s mandate and avoid politicising sovereign bodies essential to Libya’s stability and governance.’
Also on 19 December, US Charge d’Affaires Jeremy Berndt met with Khaled Shakshak underscoring ‘U.S. concern about pressures exerted against the integrity and independence of the Audit Bureau’ and reiterating UNSMIL’s call for ‘all parties involved to respect the Audit Bureau’s mandate and avoid politicizing sovereign institutions’. Over the following days, other international diplomats met with Shakshak and reiterated very similar messages, expressing their support and the need for the AB to remain free from political interference.
The situation then became more complicated and divisive following a judicial move to remove Shakshak as Audit Bureau head, and replace him with his deputy al-Saiti.
On 23 December, the Litigation Department of the South Tripoli Primary Court issued instructions to legal departments in key economic institutions, including the Central Bank of Libya (CBL) and the National Oil Corporation (NOC), to cease dealings with Shakshak and not implement decisions issued by him based on Judicial Order No. 2024/529. This is on the basis of the HoR’s Resolution No. 30 of 2014 dismissing Shakshak.
On 25 December, the Litigation Department sent another letter to Shakshak’s office accepting the appeal submitted by him and suspending the implementation of the order until the appeal is resolved. The appeal is scheduled for 8 January 2025. In response, al-Saiti wrote a letter to the same economic institutions in his capacity as acting AB head calling for the suspension of interactions with Shakshak due to the judicial ruling.
On 26 December, House of Representatives (HoR) Speaker Aqeela Saleh addressed a letter to Shakshak assigning him to continue as the head of the Audit Bureau in the western region, with all the requisite authorities, until an agreement is reached on the appointment of sovereign positions and a final judicial ruling is issued. PM Abdul Hameed Dabaiba has also given his support to Shakshak via a letter to key ministers and institutional heads, as has High State Council (HSC) head Mishri.
Comment: The General National Congress appointed Shakshak as head of the AB at the end of July 2013. The decision to remove him was passed when Libya’s politics and institutions split into two in 2014. In September 2024, the Office of the Presidency of the HoR issued a decision to completely withdraw its decision No.13 of 2024 regarding the appointment of the Deputy Head of the Audit Bureau, Atiyallah al-Saiti, and it is considered null and void, adding yet another layer of judicial and legislative complexity.
Since 2013, the AB has issued annual reports on Libya’s economic institutions. The report for 2023 was published a few weeks ago, with a litany of corruption and mismanagement highlighted. The Audit Bureau remains divided into two parallel institutions, with Shakshak the internationally recognised head leading the Tripoli-based institution and Omar Abdirba Saleh leading the Benghazi-based entity.
Significance: Although this move to remove Shakshak and politicise the Audit Bureau was not ultimately successful, or at least not yet, it highlights the increasing politicised and weaponised economic landscape whereby powerful armed actors and other elites are using their power and influence to ‘capture’ (both physically and administratively) the economic engines of the Libyan state. Furthermore, the convoluted legislative and judicial system can easily be manipulated to provide legal cover to such moves.
The strategy is clearly using the same playbook as the moves to take control of the CBL in August 2024 – taking physical control of the headquarters (in this case by trying to move it to a presumably more secure location) and using the judicial system (and Libya’s highly complex and overlapping legislative landscape) to remove the incumbent head and install a more friendly leadership. Unlike with the CBL, there was pushback from both Dabaiba and the HoR, as well as significant unified international pressure to halt the efforts to remove Shakshak from the Audit Bureau.
Given Saleh’s instructions and the international pressure around this issue it seems likely that the court will rule in Shakshak’s favour on this issue. However, this is not guaranteed and even if this particular challenge is put to rest in the short term, the lack of political progress and the increasingly unstable economic landscape means that renewed attempts by various political and/or security actors to take control of vital economic institutions are likely to persist, creating further instability and uncertainty.
Covered in our Premium Version:
Speculation about whether Russia intends to move its military bases from Syria to Libya ramps up as air traffic increases and Dabaiba rejects any such transfer
Incident: There has been a flurry of reporting on the possible transfers of Russian resources from Syria to Libya over the last two weeks and the implications. On 17 December, the Italian Minister of Defence (MoD) Guido Crosetto claimed that Moscow is transferring resources from the Syrian navy base in Tartus to Libya. Crosetto said that ‘This is not good’. According to him, Russian ships and submarines in the Mediterranean are always of concern for Italy, all the more so ‘if they are just a stone's throw from us’. On 18 December, The New Arab reported that Russia had moved about 1,000 soldiers and officers, including war criminals, from the former Assad army’s elite troops to Libya. Allegedly, they were flown from Hmeimim Air Base near Latakia to Benghazi.
NOC says crude production reaches 1.4 million bpd at end of 2024 and seeks to improve communication
Incident: On 24 December, three senior NOC directors gave an interview on TV discussing Libya’s oil performance in 2024, production challenges, shutdowns, and future expansion plans. They highlighted that Libya’s oil output reached 1.4 million bpd, despite frequent shutdowns. They also acknowledged some disturbing problems: over 2 billion USD in losses from shutdowns – causing the loss of 27 million barrels in 2024 alone – and outstanding debts to service companies, amounting to 6 billion LYD, which were attributed to operational budget shortfalls. Finally, they stressed Libya’s exploration achievements, citing the discovery of 90 million barrels of oil and half a trillion cubic feet of gas through 13 exploratory wells. On 31 December, the NOC announced that it had exceeded the production target rate for this year, noting that production amounted to 1,469,446 bpd comprising 1,417,382 barrels of crude and 52,064 of condensates.
For more...
The contents page for this week’s Libya-Analysis Weekly Report is set out below:
If you are interested in subscribing to our Weekly Report and would like to receive more information about the product, please contact Rhiannon Smith, Managing Director, at Rhi@Libya-Analysis.com.
Spotlight on... Due Diligence & Advisory Services
We offer discreet due diligence services to our clients, drawing on open-source and human source intelligence to provide detailed background and business intelligence on actors and entities operating in the Libyan space, helping our clients mitigate their legal and business risks. We also provide bespoke advisory services to meet our clients' needs.
We also have a weekly Substack for our non-profit sister project the Libya Security Monitor (LSM) which you can access here.
For more information, please contact Rhiannon Smith, Managing Director, at Rhi@Libya-Analysis.com.
From our Blog..
On 19 December, the Libya Herald published an op-ed by Sami Zapita, titled ‘Another UNSMIL Libya initiative, another Bouznika meeting – the domestic and international status quo conspiracy continues against Libyan citizens?’. Looking at the...read more
To read our other blog posts, click here.
About Libya-Analysis
Libya-Analysis® helps clients understand Libya. We are a boutique consultancy with years of experience producing nuanced, evidence-based research, analysis, and forecasting on Libya. Our strategic insights are used by multinational companies, international organisations, and democratic governments to make sense of the latest political, economic, commercial, and security developments in Libya.
Speculation about whether Russia intends to move its military bases from Syria to Libya ramps up as air traffic increases and Dabaiba rejects any such transfer
Keep reading with a 7-day free trial
Subscribe to Libya-Analysis to keep reading this post and get 7 days of free access to the full post archives.