Maltese companies owed hundreds of thousands of euros are sceptical the ceasefire brokered in Libya by the UN in early September will help them get paid as the payment system seems to have ground to a halt.
Many of the payments fell under the remit of the Libyan Investment Authority, which had an office on St Barbara’s bastion, in Valletta.
Attempts to contact the office by phone and e-mail failed, the website is not functioning and people working nearby said the majority of the personnel based there had left.
The LIA, which also operates from Tripoli, has been hampered for years by two contesting claims over its control. This has plunged its diplomatic status into a sensitive area and even the Libyan Embassy in Malta was unable to help establish contact.
Local banks are telling customers they were instructed not to handle payments to and from Libya, even via internet banking.
This left letters of credit as the next option but these needed to be signed by the Central Bank of Libya, which was not functioning, a source said.
Getting paid is not exactly straightforward
“There are ways to skirt these legal channels but not everyone wants to go into that grey territory. Unfortunately, large international companies often have ways to get the money out through their network, which puts smaller companies at a disadvantage,” an executive of a company owed substantial amounts told the Times of Malta.
The ongoing instability is affecting not only companies already operating there but also those eyeing the North African country.
The manager of a company involved in a project in Libya last February admitted that getting paid was “not exactly straightforward”.
The company was eventually paid through third parties but his lament was that everything was on hold with regard to future projects.
“We have submitted quotes for projects but heard nothing back. To be honest, even if we were awarded a contract now we would not accept the responsibility of sending people there. Even if our team members were willing to take the risk, we would not want them to go.
“But we still have great faith in the potential of this beautiful country and still believe we have a role to play in its reconstruction,” the manager remarked.
The problem with payments does not appear to be of a legal nature. A spokesman for the European Commission confirmed there were no general sanctions in place on bank movements from Libya.
Only transactions to or from designated individuals or entities and those relate to activities subject to sanctions were banned, he added.
When contacted, a spokesman for the Malta Chamber of Commerce, Enterprise and Industry said it was following the situation but had no comment to make.