At a glance

• The United Nations Security Council has extended the sanctions regime against Libya until 2026, while amending the specificities to allow for the reinvestment of $70bn (£56.8bn) frozen assets from their sovereign wealth fund.

• For Libyan readers, this action will preserve the country’s wealth from further depreciation and provide some prospects towards political unity; however, international actors such as Turkey, Egypt, and Russia could influence these outcomes.

• With the current sanction regime running until May 2026, the prospects of political unification remain unclear. While political will exists, specificities concerning elections as well as international influences will remain difficult obstacles.

What is happening in Libya?

On 16 January, the United Nations Security Council (UNSC) extended and amended the sanction regime and arms embargo against Libya. The resolution 2769 was introduced by the United Kingdom (UK) and passed with 14 members voting in favour and only Russia abstaining from the vote. The primary modification allows for the Libyan Investment Authority (LIA) to reinvest frozen assets from Libya’s sovereign wealth fund into low-risk time deposits, with the total assets estimated at around $70bn (£56.8bn).

The LIA was formed in 2006 under the dictatorship of Muhammar Ghaddafi, to strategically invest the revenues earned from Libya’s crude oil reserves into international and domestic investments. In 2011, as part of the campaign against Ghaddafi during his suppression of the Arab Spring popular uprisings, the UN froze the majority of the assets, many of which were located in Germany, Belgium and the UK.

Even after Ghaddafi was deposed the assets remained frozen as two rival authorities began fighting for control in the Second Libyan Civil War. In the western part, the Tripoli-based and UN-recognised government emerged as a contender yet was challenged by the eastern Benghazi-based government, backed by General Khali Haftar. Attempts towards political unification have been unsuccessful as elections previously scheduled in 2021 were postponed due to disagreements around electoral rules.

The resolution also included additional modifications to the sanction regime:

• The arms embargo will exempt any technical assistance and training, which aids in the development of a reunified security force.

• Renew targeted sanctions against entities and individuals actively involved in the illicit sale and export of petroleum and crude oil.

What is in it for you?

For Libyan readers, the sanctions review will have various repercussions. Firstly, the review and extension of the sanctions regime until 2026 will mean that the political and economic isolation of Libya will ease but continue. Daily repercussions could include higher scrutiny concerning financial transactions and travels, as institutions and governments have stricter diligence practices for countries associated with on-going conflicts. Sending international transfers, opening international bank accounts, and applying for visas will remain more difficult for Libyans.

The second aspect concerns the LIA’s assets. Due to  the freeze in 2011, funds that were held as cash deposits—around 50%—were unable to appreciate in value and by virtue of inflation lost significant value. The remaining assets were within real estate as well as stakes in a variety of corporations.

While some of these may have appreciated, the inability to manage these assets has meant they may have lost significant value as well. Based on the last audit, it is estimated that by 2019 the LIA had already lost around $4.9bn (£3.9bn) simply by virtue of being frozen. Depending on the currency and persistent inflation since, this figure could now be higher. The criteria for reinvestment is restricted to low-risk time deposits within foreign and stable financial institutions, meaning that none of the assets will be directly invested back into the Libyan economy.

The easing of sanctions on the LIA and permitting technical assistance that aids towards the unification of the security forces in Libya will provide more momentum towards political unification. Last month, the UN introduced a plan to form an advisory committee to settle political divisions around electoral laws and facilitate genuine political unity through a popular mandate. Whether this prospect will materialise largely depends on the Tripoli and Benghazi-based governments, as well as the militias that back them.

For readers globally, countries have used mechanisms outside the UN to impact the political situation in Libya. Türkiye has stood close with the Tripoli government, providing military advisors and drones in 2019, when General Haftar’s forces attempted to besiege Tripoli. On the other hand, during the same period Egypt supported Haftar and the Benghazi government, providing air assistance and minimal troops. Tensions between Türkiye and Egypt have since eased considerably with state visits between the two occurring and stated commitments towards cooperation in Libya. This turnaround is likely grounded around access to the vast offshore oil reserves, for which Turkish Petroleum and Egyptian Ministry of Petroleum have expressed interest in.

On the other hand, Russia has historically provided military arms to Haftar and the Benghazi government specifically through the private military contractor Wagner Group. Since the deposition of al-Assad in Syria, Russia has lost a pivotal ally. In the wake of this, flight data revealed a stark jump of Russian military flights from Syria to Libya. This has worried western think tanks such as the Atlantic Council and the Center for Strategic and International Studies, who believe Russia may attempt to sabotage attempts towards Libyan political unity to benefit their own position. This has become particularly relevant as reports of Wagner Group activities have become more commonplace on the whole African continent. 

What happens next?

The sanctions regime has been extended until May 2026, and without a considerable shift towards peace and stability, will only be reviewed towards the end of the deadline. According to Armed Conflict Location and Even Data (ACLED), Libya had a total of 209 violent events last year with casualties reaching 146, while January 2025 already reported 6 violent events. Despite this, both the Benghazi and Tripoli parliaments passed the National Reconciliation and Transitional Justice Law as a signal towards political unification. The details of this law and the possibility of it leading to political unification remain unclear and non-public, yet signify some political will on part of domestic fractions.  

The Polis team in New York