The United Nations Panel of Experts on Libya has recommended that the UN Security Council impose sanctions on Ahmed Gadalla, a Libyan financier and permanent resident of Canada. Mr. Gadalla, 46, along with two of his foreign-based companies, is accused of violating the UN arms embargo against Libya, according to the panel's 2026 final report. The embargo, in place since 2011, prohibits the transfer of military equipment to Libya, with limited exceptions.
The allegations have not been tested by any independent judicial authority and are not legally binding. Mr. Gadalla denies all wrongdoing and is in ongoing dialogue with the UN panel, according to his Canadian lawyer, Peter Downard of Fasken Martineau DuMoulin LLP. In a statement to The Globe and Mail, Mr. Gadalla said, "I have conducted my business lawfully and will continue to do so."
Allegations of Arms Embargo Violations and Fuel Smuggling
The UN panel alleges that Mr. Gadalla breached the arms embargo through his shipping interests, including a delivery of over 200 armored vehicles to Libya, and used his companies to smuggle fuel out of the country. The report recommends that the Security Council consider sanctions on all parties deemed to have violated the embargo or engaged in energy trafficking supporting militias or criminal groups. Mr. Gadalla is among dozens of parties cited.
The Security Council's sanctions committee has not yet made a determination on the panel's recommendation. Separately, The Sentry, a U.S. investigative organization, published a report in April urging the UN, Canada, the U.S., Britain, and the EU to impose targeted sanctions on Mr. Gadalla under their respective Magnitsky-style regimes. Canada's Sergei Magnitsky Law allows for asset freezes and travel bans against foreign nationals responsible for human rights violations or corruption.
The calls for sanctions come at a critical time for Canada, which faces domestic and international criticism over its enforcement of economic restrictions against designated individuals and entities.
Mr. Gadalla's Background and Legal Status
Mr. Gadalla, born in Libya, obtained a Canadian visa in 2016 and became a permanent resident. He has not been charged with any crime. He is the chairman and owner of Alushibe Holding Group, a Dubai-based conglomerate. In response to the allegations, he stated, "I utterly reject and deny the accusations made against me by The Sentry. My lawyers are challenging those allegations. I also refute the claims made about me in the UN Panel of Experts report."
His lawyer, Mr. Downard, emphasized that UN panels are investigative bodies only and do not adjudicate facts or impose sanctions. "The UN has not made any determination to designate Mr. Gadalla or any of his businesses. There is no valid basis for any such designation," Mr. Downard wrote in a May 12 letter.
Details from the UN Panel Report
The UN panel found that Mr. Gadalla influenced politics and business in Libya, which has been divided since the 2011 ousting of Moammar Gadhafi. Eastern Libya is largely controlled by Field Marshal Khalifa Haftar and his son Saddam Haftar, while the west is ruled by Prime Minister Abdulhamid al-Dbeibah's transitional government in Tripoli.
The panel's investigation revealed a "mutually beneficial arms procurement pact" between the eastern and western regimes in 2022 to circumvent the embargo. This pact allowed armored vehicles to be jointly acquired under the guise of al-Dbeibah's government. The report stated that armed groups across Libya used a shipping line controlled by Mr. Gadalla. Consequently, Mr. Gadalla and his companies—Al Fooz Al Qadem Shipping Ltd. (Marshall Islands) and UDS Shipping Services LLC (UAE)—were found to be in violation of the arms embargo.
An example cited involved at least 240 vehicles transported to Libya by the Panama-flagged ship MV Aya 1 (later renamed Zulfa 1), owned by UDS Shipping Services and operated by Al Fooz Al Qadem Shipping. On July 18, 2025, the ship was intercepted by EU Operation IRINI, which found 12 militarized vehicles among 332 containers. The Libyan Ministry of Defence claimed to be the intended recipient of 154 vehicles and provided an end-user certificate signed by Prime Minister al-Dbeibah. However, the UN panel determined the exemption request did not cover the actual recipients and the certificate was "technically invalid."
The report also concluded that the MV Aya 1 was complicit in illicit exports of refined petroleum from Tubruq and Benghazi to the UAE, including at least 22 containers with flexi-tanks filled with heavy fuel oil.
Financial Allegations
The UN panel further claims that Mr. Gadalla, supported by Saddam Haftar, controls several banks in Libya and used the banking sector with armed group backing to fraudulently obtain letters of credit from the Central Bank of Libya. The report alleges that attempts to investigate were blocked by an Alushibe-owned bank in Benghazi. Mr. Gadalla allegedly resold foreign currency obtained through letters of credit at black market rates, amassing a significant financial position in Libyan dinars.
Mr. Downard denied these allegations, stating that Mr. Gadalla has only limited contact with Saddam Haftar and no business dealings with either Haftar. He also said Mr. Gadalla has small shareholdings in Wahda Bank and the Bank of Commerce and Development, and is not in a position to control them.
The UN panel also alleged that Mr. Gadalla used proceeds from financial fraud to purchase diverted fuel from armed groups and facilitated its illicit export for profit. Mr. Downard called the report a "one-sided story," noting that Mr. Gadalla's substantive engagement with the panel began only on March 30, after the report was dated March 24.
Links to a Canadian Drone Smuggling Plot
The Sentry report alleges that Mr. Gadalla enabled arms smuggling for Khalifa Haftar, including a Canada-based plot disrupted by the RCMP in 2024 involving the illegal sale of Chinese drones and military equipment to Libya. The RCMP investigation resulted in charges against two former employees of the International Civil Aviation Organization. Mr. Gadalla was not charged, but The Sentry claims a Dubai-registered company of his paid for the sea transport of the drones.
RCMP spokesperson Marie-Eve Breton declined to comment on potential investigations. Mr. Downard stated, "Mr. Gadalla has had no involvement whatsoever in 'transnational arms smuggling' or the 'illegal sale of Chinese drones' to Khalifa Haftar."
Mr. Gadalla's Business and Personal Life
Mr. Gadalla is linked to businesses in Libya, Malta, Britain, and Canada, spanning energy, steel, telecom, aviation, shipping, and cement. He is chairman of Libya United Steel Company for Iron and Steel Industry and a director of ANAMA INC., a Toronto-based company. He graduated from Indiana University Southeast and International Business University in Toronto. In 2015, he applied to the Quebec Investor Program and became a permanent resident in 2016. In 2023, he purchased a luxury condo in Toronto's Yorkville neighbourhood for $5.12 million. He is also a donor to the Sinai Health Foundation.
