Cross-border trade between Libya and Tunisia was disrupted again after the Tunisian government passed a law on 5 January 2017 to counter cross-border smuggling. Libyan and Tunisian smugglers enjoy an attractive arbitrage opportunity of selling cheap subsidised Libyan goods in Tunisia, and this has become even more attractive as the Libyan Dinar plummets on the black market. The Tunisian border community town of Ben Guardane relies on this trade, especially because of the central government’s neglect. As a consequence, the anti-smuggling law was unpopular; sparking protests in Ben Guardane, and smugglers shut down the border road last week.

Tunisian officials from Medenine Province met Libyan officials from the western foreign ministry to discuss how to overcome the impasse. In mid-January, Medenine’s governor publicly stated that he had reached an agreement with the Libyan officials to attempt to resume cross-border trade on 23 January 2017. As part of the agreement, the tax on Libyan goods coming into Tunisia appears to have been lifted, which was an essential request from the Ben Guardane residents.

In the absence of strong state institutions, it is likely that this type of disruption will continue as Libya’s smuggling networks thrive in the vacuum. Besides subsidised goods, both people and money smuggling is also likely to continue, despite recent efforts by the EU to reach an agreement with the Government of National Accord (GNA) on how to more effectively combat the human trafficking networks. Tripoli’s Audit Bureau has also sought to intensify its own campaign of combatting money smuggling. On 19 January 2017 it announced a ban on 23 Libyan and foreign companies, and the freezing of accounts belonging to companies holding millions of dollars in smuggled money. At least five of the companies were based in the UAE, with others located in Tunisia, Malta, Hong Kong and Switzerland. It is unclear whether account freezes can be put in place, and the Prosecutor General’s office — which is responsible for policing these types of activities — does not have the capacity to do so.