UN ends sanctions on Libya bank
New York -The UN Security Council on Friday
lifted sanctions on Libya's central bank and a key investment bank freeing tens
of billions of dollars to ease a post-Gaddafi cash crunch.
The US immediately announced it would unblock
more than $30 billion of assets of the Central Bank of Libya and its
subsidiary, the Libyan Foreign Bank (LFB). Britain said it would release more
than $10 billion.
An estimated $150 billion of assets were
frozen around the world in February after the Security Council ordered
sanctions against late strongman Muammar Gaddafi, who was overthrown at the end
of an uprising in which tens of thousands died.
The new Tripoli authorities have stepped up
calls in recent weeks to release money to pay for salaries and key services
amidst a growing threat of economic deadlock.
Prime Minister Abdel Rahim al-Kib and
National Transitional Council chief Mustafa Abdel Jalil said the release of
funds was "essential for the economic stability of Libya" in a joint
letter sent to the council to plea for the freeze to be ended.
An official request for the lifting of
sanctions was made one week ago and no objections were made by any of the
council's 15 members enabling the assets freeze to be lifted on Friday.
On top of more than $30 billion blocked in US
accounts, Britain's Foreign Secretary William Hague said his government would
immediately act to free about $10 billion held in Britain.
The easing of the sanctions "marks
another significant moment in Libya’s transition," Hague said.
"It means that Libya's government will
now have full access to the significant funds needed to help rebuild the
country, to underpin stability and to ensure that Libyans can make the
transactions that are essential to everyday life."
Hague said Britain would pressure the
European Union to quickly release frozen sums.
The White House said it had "rolled back
most US sanctions on the government of Libya" - unlocking virtually all
Libyan government assets within US jurisdiction.
"These measures, along with the steps
taken today by the UN Security Council, will allow the Libyan government to
access most of its worldwide holdings," the White House said.
A global arms embargo and an assets freeze on
Gaddafi's family and associates remains in place, along with financial
institutions including the key Libyan Investment Authority sovereign wealth
Central banks around the world had been
nervous about releasing funds frozen under sanctions because they considered
there were not sufficient guarantees about where the money would go.
"There are huge amounts being held and
treasuries were nervous they could face legal action later," one western
diplomat said. "But now the central bank is operating again, free of Gaddafi,
we can have some confidence."
Diplomats warned however that the caution
meant that even with the lifting of sanctions Libya may still have to wait for
its missing billions.
A UN resolution in September eased sanctions
on Libya's national oil company.
Fighting essentially ended in Libya when Gaddafi
was killed in October and the UN Security Council authorised the release of
about $18 billion to help the government. But by late November only about $3
billion of that had been made available to Tripoli because of the legal
Libyan Foreign Bank was until recently more
widely known as the Libyan Arab Foreign Bank. Entirely owned by the central
bank it was set up to carry out transactions abroad, especially for Libya's
Libyan officials say the country, despite its
oil wealth, desperately needs cash to pay for services and get the post-Gaddafi
economy moving again.
In their letter to the Security Council,
Jalil and al-Kib said lifting sanctions was "essential for the economic
stability of Libya; for confidence in the banking sector; for the smooth
execution and settlement of both domestic and international banking
transactions; and to underpin the social and micro stability of the new