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UN keen to free more Libyan assets

Published Dec 1, 2011


New York - The United Nations Security Council is working to speed up the flow of unfrozen assets to Libya's post-war authorities, which have received only a fraction of the country's oil-based wealth held overseas, a senior council diplomat said on Wednesday.

The move follows an appeal this week to the 15-nation council by the UN special envoy to Libya, Ian Martin, to tackle what he said was Tripoli's “urgent need for liquid funds” and popular resentment at the shortage of cash.

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When a rebellion broke out in February against the rule of leader Muammar Gaddafi, the Security Council froze Libyan assets stashed in foreign accounts, estimated at $150-billion accrued largely from oil exports.

More than a month after fighting ended with Gaddafi's overthrow and death, only about $18-billion has been released by special dispensations of the council's sanctions committee, but diplomats say only about $3-billion has been made available to Tripoli. The bulk of the $150-billion remains frozen.

Martin urged the council on Monday to speedily agree with asset-holding countries and Libyan authorities on a “co-ordinated approach,” adding: “The stabilisation of the country, the success of the government and the perception of the international community are all at stake.”

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“The contrast between the knowledge that Libya has great national wealth and the inability of citizens even to draw fully from their own bank accounts is an inflammatory one,” Martin said.

Following his briefing, council members “agreed that we're going to set up a little group, a task force, to look through this,” the senior diplomat said. “I think we're going to need to move quite quickly on that... weeks, not months.”

Libyan oil production to bring in new income is currently only about a third of what it was before the rebellion started, making the blocked assets vital.

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Diplomats have said the reason more assets have not been unfrozen is uncertainty in the countries that hold them over who legally owns them and concerns that in some cases the owners could be Gaddafi, his family or associates.

National treasuries are “very nervous about releasing the assets unless they're 100 percent certain that they're going to the right people, because they're worried about being sued if they hand over someone's assets to someone else”, said the envoy, speaking on condition he was not identified.

Another problem is that while several Western countries have obtained permission from the Security Council sanctions committee to release some money, some specified that this would only be for humanitarian purposes.

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But the diplomat said Libya actually required the funds to pay salaries and build infrastructure. “It's not humanitarian purposes that the money is now needed for, and therefore (the assets) need to be re-authorised for release,” he said.

The envoy said the council had no fixed plan yet on how to tackle the problem, although one option could be to take the Libyan central bank off the list of sanctioned entities, thereby freeing up all its assets.

India, a temporary council member, had suggested that should not be done until an elected government had replaced the current interim administration in Libya, but other countries had objected that could take many months, he said.

Libya's new leaders have repeatedly stressed the need for assets to be unblocked.

Prime Minister Abdurrahim El-Keib told Reuters earlier this month that he needed resources to take care of the security situation in his country, where former rebel fighters remain under arms. “They are our resources in fact,” he added. “We are not asking for a loan.” - Reuters

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