Paper Money

Countries contest legitimacy of Russian-printed Libyan notes

The United States seized what it characterizes as counterfeit Libyan currency printed by Russia. Russian officials say the notes are legitimate.

Image courtesy of Malta Today.

The United States and Russia are in a counterfeit currency cold war over Libyan bank notes. Multiple news outlets at the end of May reported the September 2019 seizure by Malta of over $1 billion worth of supposedly counterfeit Libyan currency.

The U.S. State Department commended the seizure in a May 29 statement. It noted that the “counterfeit” currency was printed by Russia’s state-owned Goznak, the security printing and minting enterprise owned by Russia’s Ministry of Finance. It said the currency was not ordered by the Central Bank of Libya, located in Tripoli, but rather by an “illegitimate parallel entity.”

The statement continued, “The Central Bank of Libya headquartered in Tripoli is Libya’s only legitimate central bank. The influx of counterfeit, Russian-printed Libyan currency in recent years has exacerbated Libya’s economic challenges. … This incident once again highlights the need for Russia to cease its malign and destabilizing actions in Libya.”

The parallel entity is another central bank in the eastern city of Benghazi under the control of Libya’s eastern commander, Khalifa Haftar. Russia countered the State Department’s charge on May 30, stating: “We would like to note that under the conditions of actual diarchy in Libya, there are currently two central banks. One of them is located in Tripoli, where the internationally recognized Government of National Accord, headed by Fayez Sarraj, operates. Another central bank is located in Benghazi. Its head was appointed by the popularly elected Libyan parliament, the Chamber of Deputies, and, therefore, has the necessary international legitimacy. Thus, false are, not Libyan dinars, but the US statements.”

IsraelDefense magazine says that UN experts reported to the Security Council in December 2019 that Goznak delivered to the parallel central bank the equivalent of over $7 billion between 2016 and 2018. The Russian Foreign Ministry says Goznak is operating under a contract signed in 2015.

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