(Last updated: 1 Mar 2011)

Business opportunities

Please note: Austrade’s Tripoli office, responsible for Libya, Algeria, Morocco, Sudan, Tunisia and Malta, is now temporarily closed. Trade or investment inquiries related to these countries should be directed to our Dubai office: + 971 4 508 7116.

Australians remaining in Libya are urged to remain in contact with the Department of Foreign Affairs and Trade's 24-hour Consular Operations Centre on +61 2 6261 3305 or the Australian Embassy in Cairo on +202 2770 6600.

Business etiquette

Business tips

In business dealings, personal relationships are crucial to establish trust and rapport with a potential buyer in Libya. It is almost impossible to reach business agreements without visiting Libya, usually more than once, and given the market risk, visiting the country to meet potential partners and inspect their businesses is wise anyway.

Libyans can be fierce negotiators, although price is often not the sole issue that they base decision upon. It is important to highlight the quality of your product as much as the price, and to frame the sales message delicately.

Shirtsleeves are acceptable business wear in hot weather but suits and ties are worn for more formal occasions.

Most business dealings take place with state organisations and English is often understood. Government policy is that all official documents are in Arabic (or translated into Arabic) and that official business is conducted in Arabic.

It's also worth noting that appointments are necessary and business cards are useful, although not widely used.

Please also note: Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

Tariff

Single-column tariff, based on the CCC Nomenclature. Tariff (single column) ad valorem on the cost, insurance and freight (CIF) value, plus a 10 per cent customs surcharge, is charged. The exceptions are goods imported by oil or petroleum firms, which are generally not taxed.

Non-tariff barriers

Import restrictions

UN sanctions against Libya have been lifted temporarily, and trade may be resumed normally except for some sensitive products or services, which need prior approval from the DFAT or Department of Defence in Australia, depending on the type of product. Commitments of a long-term nature must be treated with caution since sanctions could be reimposed.

The provision of services associated with the training of Libyan pilots, flight engineers, or aircraft and ground crew associated with the operation of aircraft and airfields within Libya, is still considered a sensitive issue and advice should be sought prior to commitment.

The export from Australia of commodities, such as live animals, processed food products and mechanical handling equipment, oil exploration and agricultural services can be undertaken freely.

The Libyan Government is able to pay for goods and services, by direct payment from Libya to the supplier. Australian companies requiring further information on the UN sanctions imposed on Libya may contact:

The Department of Foreign Affairs and Trade, Canberra
Tel: +61 2 6261 2179
Fax: +61 2 6261 2640

Applications to export defence and strategic goods should be directed to:

The Department of Defence, Canberra
Tel: +61 2 6266 2586
Fax: +61 2 6266 2997

Import trade by private companies and partnerships is permitted for goods which are not classed as strategic and for goods not contained in the annual Commodity Budget. The importer is subject to licensing, administered by the Secretariat of Economy and Foreign Trade.

Goods listed in the annual Commodity Budget may be imported only by state owned enterprises.

Foreign exchange is allocated through the Exchange Control Department of the Central Bank. Allocation is dependent upon the establishment of a firm contract and the issue of an import licence.

It would be prudent to exercise caution when entering into any financial commitment concerning export of goods or services to this country in view of certain changes in regulations which are not pre-advised. It is advisable that exports are covered by pre-opened letters of credit duly confirmed by a first class bank outside Libya. CAD terms of payment should be avoided. Preferred currency US dollars or DEM.

Product certification, labelling and packaging

Labelling

Outer containers should bear the consignee's mark and port mark and be numbered (to accord with packing list) unless their contents are such that they can be otherwise readily identified. Although not compulsory, it is advised that all printed contents be in Arabic or French.

The usual documentation includes:

• pro forma invoice (if requested by the buyer)
• commercial invoice
• certificate of origin
• bill of lading (number required varies

There are special certificates required for plants, meats, foodstuffs, and medical goods.

For foodstuffs, the date of manufacture, expiry date of fitness for human consumption and the conditions of storage and preservation should all be written in Arabic. Trademarks should be clearly shown.

Packaging

There are no specific packaging requirements, although packaging should be strong and should guard against extreme heat in summer, humidity in winter, and possible brief periods of storage in the open.

Special certificates

All plants and plant products require import permits as well as phytosanitary certificates.

Meat requires a halal certificate to the effect that it has been slaughtered according to the Islamic laws. This must be legalised by an Arab Embassy if no Libyan Embassy is established. Such a certificate is not required for meat cuts of less than two kilograms in weight.

All foods require a health certificate.

A certificate of purity legalised by the Embassy is required for all medical goods and drugs.

Methods of quoting and payment

Quotations should be C&F Libyan port in US dollars or DEM or any other major currency agreed upon between the parties concerned - preferably by pro-forma invoice. Quotations in Australian dollars should be avoided.

CIF quotations are acceptable for CAD shipments only. Payment is usually by letter of credit but CAD should be avoided at all costs.

Documentary requirements

Fax signatures are not permitted.

Pro-forma invoices are not compulsory but will usually be requested by importer and will greatly assist in arranging insurance.

Commercial invoice

No prescribed form, but must be signed by exporter and be certified by an approved authority (see 'Guidelines', section 2.3) prior to legalisation by an Arab Consulate. Importer will specify number of copies. The invoice must show the following:

• detailed description of goods
• number and description of packages, marks and numbers of individual packages
• gross and net weights or quantities
• freight, insurance and any other charges
• any information in respect of value of goods at place of purchase
• country of origin
• place of shipment and destination of goods

Where customs duty varies according to composition of goods, eg. textiles, a statement showing the percentage composition must be included.

Certificate of origin

A certificate of origin is required for all imports. No prescribed form, but the original is required by Libyan Customs. It must include name of company or factory which produced the goods and be certified by an approved authority (see 'Guidelines', section 2.3) and then by the Libyan Embassy.

Goods re-exported to Libya through intermediate countries must be accompanied by a certificate of origin from the original source of manufacture.

Certificates issued for Australian goods by Maltese or UK Chambers of Commerce are not acceptable.

The following statement must appear in the certificate of origin and be signed by the shipper: 'We hereby certify that the goods enumerated in this invoice are not of Israeli origin nor do they contain Israel materials. Also the goods are not shipped by a vessel on the Arab Blacklist or calling at any Israeli port.'

Bill of lading/airway bill

No special requirements. The number of copies will be specified. The bill of lading must include:

• marks of identification, name and address of consignee
• quantities, weights and value (which must agree with those shown on the commercial invoice)

Public health requirements

Plants and plant products are subject to inspection by the Libyan Phytosanitary Service before release by customs (see also 'Special certificates' below).

Drugs and pharmaceuticals are subject to special regulations laid down by Ministry of Health. These may be imported only by qualified and registered medical and veterinary practitioners and pharmacists.

Eggs must be marked with the name of the exporting company, the country of origin and the date of production.

The import and use of insecticides is subject to special regulations.

Insurance

Must be effected through a Libyan company or agency if importer wishes to establish letters of credit. Normal practice may be followed with CAD shipments.

Weights and measures

The metric system.

Taxation

The taxation system in Libya is not particularly transparent or effective, with tax often charged on deemed income rather than from company records. Potential investors should engage a local accountant if investing in Libya, and get full information on the tax implications of their operations. Imports are subject to a 10 per cent customs surcharge of the applicable customs duty.

Tax exemption for approved projects

Austrade works in conjunction with the Australian Taxation Office ('ATO') to administer the income tax exemption available under section 23AF of the Income Tax Assessment Act 1936 ('Tax Act').

Section 23AF should assist the international competitiveness of Australian companies and governmental organisations competing to win international tenders. Further information is available.