Chapter Eight: The Financial System

Article (170)Principles of Public Finance

The public finance of the State is based on the following fundaments:

1- Action of the financial system of the State as one unit.

2- Respect of principles of transparency and accountability.

.3- Distribution of national incomes in an equal and fair way between the local and national levels of    government, considering population density, distribution of population in the local unit, the level of infrastructures and services and the indicators of spatial and human development.

4- Elaborating government budgets as to ensure efficient and fair services and to promote the efficiency of national economy.

5- Rationalizing the use of resources as to achieve a sustainable development and preserve futures generations rights.

6- Empowerment of local government units in order to achieve independence and justice according to this Constitution.

Article (171) Revenues of the State

All revenues of the State shall devolve to Public Treasure. No part of Public Treasure money or spending there from , for any purpose whatever, should be taken but on basis of a law.

Article (172) Public budget

The government submits the draft budget to the House of Representatives in the end of September, as latest, in each year, for study and adoption in no later than the end of December, each year. It is not allowed to postpone its submission after the stated deadline but with an authorization from the House of Representatives in emergency and necessary cases. The Public budget is promulgated as a law.

Article (173)Opening of provisional monthly supplies

In case the budget is not adopted before the beginning of the financial year, the Prime Minister may spend on basis one twelfth (1/12) of last year budget, by virtue of a presidential decree, relating to salaries and assimilated and public spending, for a period that does not exceed three months, to start from January the first and end on March 31.

Article (174)Out of Budget Spending

Any spending not stated in the budget, or exceeding the initial amount provided for in the budget, shall be submitted to the Legislative Authority for study and adoption. No exceptional spending out of law limits.

Article (175)Loans and financial obligations

The State cannot engage loans or commit obligations that imply spending from Public Treasure but in compliance with the provisions of State’s financial system law.

Article (176) Closing accounts

The State submits the final accounts, as they are closed in the end of December, to the House of Representatives for discussion and adoption, in no later than the end of April of the financial year. No delay after this deadline is allowed and the government is responsible of any delay and the Central Bank stops supplying funds to the budget. The House of Representatives shall discuss the final accounts on light of the Accounts Department report, and adopt it in sixty days of its submission.

Article (177)The two accounts of emergency and  budget subvention

The State’s financial system organizes the opening of a strategic emergency account to face the crises that are beyond the financial capacity of the government by virtue of the adopted budget, such as cataclysms, disorder or decrease of national economy and cases of emergency.

The State’s financial law also organizes the opening of subvention account for the budget in case of a decrease in State’s financial resources or an extension in development spending or to face prices increase in regional and international markets. Both accounts are funded and consumed according to a law.

Article (178) Central Bank of Libya

The Central Bank of Libya is a public institution which enjoys the legal personality and financial, technical and administrative autonomy. It works with transparency within the State’s general policy. It established the monetary policy and national currency as well as monitoring its stability. The Central Bank also manages the State’s reserves in foreign currencies and organizes credit policy and controls its implementation. It is responsible for monitoring the performance of banks sector, beside any other competences state by law.

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