EU-backed system fuels Libya’s flourishing trafficking industry

Libya’s rapidly expanding smuggling economy has become a core part of the country’s political system, driving cycles of detention, ransom, and forced labor. This week’s shipwreck off the Libyan coast, which left 42 migrants presumed dead, reflects how deeply this economy shapes every stage of migration through the region.

A very profitable, very violent business model

In Libya, smuggling has evolved from a simple payment for passage into a central pillar of Libya’s conflict economy. The market is  violent and highly profitable.

This growth rests on the collapse of the Libyan state. The 2011 ousting of Muammar Gaddafi shattered the state’s monopoly on violence and borders. In its place, competing militias, tribes, and quasi-state bodies carved out fiefdoms. Libya remains split between the Government of National Unity in Tripoli and the LAAF-backed authorities in the east. That fragmentation creates porous borders and weak security.

Within this vacuum, a web of armed groups and state-affiliated forces rose. Many operate under government ministries or security agencies while also behaving like criminal networks. They control the Directorate for Combating Illegal Migration, segments of the Libyan Coast Guard, and many detention facilities.

The money is shocking. A Chatham House study in 2016 estimated US$978 million from smuggling and trafficking in one year. A later UN assessment suggested that armed groups earned around US$1 billion annually from trafficking and EU-funded detention contracts.

EU funding a “direct subsidy for the trafficking industry”

The Week reports,

The EU’s ‘border externalisation’ policy is one such case, which funnels hundreds of millions of euros into Libya to manage migration. Eventually, it became a direct subsidy for the trafficking industry. The policy continues to exist, which primarily funds, trains, and equips the LCG to intercept boats in the Mediterranean and return migrants to Libya. However, it has created a dire situation, where instead of returning migrants to safety, the LCG brings them to the DCIM-run detention centres. From there, the migrants are abused and illegally trafficked, generating revenues for the very militias the LCG aligned with.

In other words, interceptions at sea feed Libya’s detention-for-ransom economy. Migrants rarely find safety when they are taken back. Instead, they move through a three-stage cycle. First, smugglers move them from nearby countries into southern hubs like Sabha and Kufra. Second, they are sold or transferred to coastal groups. Third, they are funneled into official and unofficial detention centers.

The UN has described these centers as places of “unimaginable horror.” People face torture, sexual violence, starvation, and forced labor. Families receive ransom demands. Those who cannot pay remain trapped, are sold again, or are forced onto unsafe boats.

Powerful figures across Libya benefit from this system. They then use the threat of migration to extract concessions from Europe. Libya’s migrant smuggling economy is a regulated and systemic part of the country’s political economy, supported by European money and border first policies.

This is why Freedom United continues to call for an end to EU cooperation with Libyan authorities while migrants face trafficking, forced labor, and extortion in Libya. Add your name to our campaign demanding that governments stop funding this abusive system and instead create safe, rights-based migration pathways.