Lockerbie deal reached

2003-08-14 08:39

New York - Lawyers for Libya and the families of 270 victims of the 1988 Pan Am bombing over Lockerbie, Scotland, signed an agreement to set up a US$2.7bn (about R20bn) compensation fund, a key step to lifting UN sanctions against Libya, the families' lawyers said.

"Great news! After an 11-hour session in London today, we signed an escrow agreement with the Libyan delegation and the Bank for International Settlements," said an e-mail signed by attorneys James P Kreindler and Steven R Pounian and read to The Associated Press on Wednesday.

The Basel, Switzerland-based Bank for International Settlements, or BIS, confirmed earlier on Wednesday that it had been asked to manage an escrow account for the compensation claims.

Under the deal, UN diplomats said the Libyan government was to start transferring the US$2.7bn into the escrow account immediately and complete it on Thursday.

The Libyan government would then send a letter to the UN security council saying it has met the conditions for lifting sanctions by taking responsibility for the bombing, renouncing terrorism and paying compensation to the families, UN diplomats said.

The United States and Britain also would send letters to the council saying they believe Libya has met the requirements to have sanctions lifted, and Britain would circulate a draft resolution to lift sanctions, the diplomats said.

Friday is the target date for sending the letters and circulating the draft resolution as well as for a meeting at the US State Department in Washington with families of the victims of the 1988 bombing, the diplomats said.

"We expect that the US$2.7 billion will be deposited with the BIS soon and that Libya will be sending its letter accepting responsibility to the UN security council," Kreindler and Pounian said in the e-mail sent to family members Wednesday.

"When both of these events occur, we expect the UN security council to enter a resolution lifting the UN sanctions against Libya which will trigger the payment of US$4m per case to our New York trust account," the lawyers said.

- AP