Fulbright Briefing : Libya: Companies Wanting to Compete for New Business Opportunities with the TNC Should Begin Taking Steps Now

By: Stefan Reisinger, Marsha Z. Gerber and Stephen M. McNabb

With forces loyal to the Libyan Transitional National Council ("TNC") appearing to control the streets of Tripoli and to be battling the last remaining vestiges of Qadhafi's forces, the collapse of the Qadhafi regime appears imminent. The fall of the Qadhafi regime will inevitably open doors to lucrative business opportunities in Libya including Libya's oil reserves, which are the largest in Africa. Multiplying the potential opportunities for U.S. companies is a statement from the TNC that suggests it may reallocate billions of dollars of oil exploration and construction contracts that had previously been awarded to Chinese, Russian and Brazilian companies to U.S., European and Qatari companies given the lack of support that the TNC received from China, Russia and Brazil during the rebel uprising.

Companies that are considering how best to compete for these opportunities with the TNC should begin making concrete plans to do so as early as possible. This is particularly critical, given that many international companies have already begun their efforts to enter or re-enter the Libyan market. For example, earlier this week, the TNC signed a memorandum of cooperation with a European oil field services company agreeing to work together to create conditions allowing the company to restart its pre-uprising operations in Libya. Additionally, other European corporations are also believed to already be engaged in efforts to reach out to the TNC in order to enter the Libyan market once the current situation in Libya stabilizes.

Although the U.S. still has sanctions in place under Executive Order # 13566 that block the property of, and prohibit any transactions with, any entity that is owned or controlled by the Qadhafi regime or any other Specially Designated Nationals ("SDN"), U.S. persons should, nevertheless, be able to begin fostering business deals with the TNC now under General License No. 6, issued by the Office of Foreign Asset Control effective July 15, 2011. Under General License No. 6, all transactions involving the TNC (including its agencies, instrumentalities and controlled entities) are authorized so long as the transactions do not involve any entities owned or controlled by the Qadhafi regime or SDNs or any other blocked property.

Members of Fulbright's International Trade Practice group will continue to monitor developments in Libya closely, including whether and when revisions to the current U.S. Libyan Sanctions Regulations will be implemented.

Visit the Fulbright & Jaworski Publications page for more analysis of international and foreign law issues.

For more information about LexisNexis products and solutions connect with us through our corporate site.