LIA is a member of the International Forum of Sovereign Wealth Funds, a global network of sovereign wealth funds, dedicated to collaborative work and enhancing the impact of sovereign wealth funds through dialogue, research, and evaluation.
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The Santiago Principles ®️ are currently implemented by more than 30 members of the International Forum of Sovereign Wealth Funds around the world, including the Libyan Investment Authority.
LIA continues to apply the Santiago Principles ®️ in both its governance and risk management frameworks, and regularly tracks its progress to ensure it continues to build on its strengths and continues to develop in other areas.
Legal framework, objectives and consistency with macroeconomic policies
Overview: This category summarizes the laws and regulations related to the operations of sovereign wealth funds, as well as their contacts with the government, their objectives, and their approach to formulating their investment strategies.
Guideline principle: Sound practices and principles in this field support a solid institutional framework and governance structure for sovereign wealth funds, and facilitate the formulation of appropriate investment strategies consistent with the stated policy objectives of sovereign wealth funds.
The achievements of the Libyan Investment Authority in this context: The legal framework of the Libyan Investment Authority was defined in Law No. (13) approved by the Libyan government in 2010 AD. It defines the institutional framework that governs the Libyan Investment Authority. It also defines its objectives, Board responsibilities, and the financing and structuring mechanism.
We are working in the Libyan Investment Authority to give more clarity to our policy objectives, improve the means of disclosure of our approach in spending and withdrawals, in addition to enhancing our ability to disclose regular and accurate statistical information to government entities and others. We have appointed independent international consultants to support efforts to prepare a disclosure plan which enhances the ongoing reporting requirements under Libyan law and in line with international best practices.
Institutional Framework and Governance Structure
Overview: This category summarizes the SWF’s organization, functions, roles and responsibilities, as well as accountability, disclosure and reporting. Likewise, it covers the ability of SWFs to facilitate operational independence in their management away from political interference.
The guiding principle: Adoption of a sound governance structure that separates the functions of the owner, the governing body(s), and management functions, and facilitating operational independence in managing sovereign wealth funds in a manner that protects investment decisions and operations and investment operations away from political influences.
LIA’s achievements in this context: Law No. (13) defines the roles, responsibilities and overall governance structure of LIA, defines clear operational independence and sets general standards for accountability. LIA is an investment entity that enjoys legal and financial independence, namely, while the LIA is accountable to the Libyan government, it enjoys full operational independence. The Libyan Investment Authority prepares its financial statements annually based on accounting principles consistent with its unique status.
The Authority is currently witnessing the implementation of a comprehensive transformation program aimed at improving governance, transparency and accountability in line with the best practices followed internationally, and with the support of international consultants. We will soon issue financial statements that comply with international financial reporting standards.
Investment and risk management framework
Overview: This category aims to ensure that the investment policy and expectations of sovereign wealth funds are clear, appropriate and fully implementable and feasible, and to ensure that risks are managed and monitored properly.
The guiding principle: A clear investment policy embodies the commitment of sovereign wealth funds to a measured investment plan and practices, while a reliable risk management framework enhances the soundness and accountability of their investment operations.
The achievements of the Libyan Investment Authority in this context: The Libyan Investment Authority has developed a new statement of its investment policy and risk management framework as part of its ongoing efforts within the framework of the transformation strategy, taking into consideration the current work environment in which it operates. LIA is working on evaluating various relevant investment options and approaches to strengthen its asset management. LIA is well aware of its responsibilities as a global investor, and is keen to abide by them in accordance with the United Nations sanctions regime.
