U.N. unfreezes assets of 2 Libyan banks

UNITED NATIONS - The U.N. Security Council on Friday ordered assets of two Libyan banks that had been under the control of Muammar Qaddafi to be unfrozen, clearing the way for the return of more than $40 billion to help the new government rebuild the country.


The transitional government had asked the council's committee monitoring sanctions against Libya to lift the asset freeze on the Central Bank of Libya and its subsidiary, the Libyan Foreign Bank. There were no objections from any of the 15 council nations who comprise the committee by the deadline Friday evening so the sanctions were immediately lifted.


Soon after, the U.S. government announced that it has rolled back most sanctions against Libya's banks, unblocking more than $30 billion in assets. And British Foreign Secretary William Hague said his government is seeking swift European Union action to pass the regulation required to release about 6.5 billion pounds ($10 billion) in assets frozen in Britain.


Billions of dollars more in Libyan assets frozen elsewhere are also expected to be released.


EU to unfreeze Libya assets once UN approves


The Security Council froze the assets of five key Libyan financial institutions in March following the uprising against Qaddafi's 42-year rule and his deadly crackdown on protesters.


After Qaddafi's death and the end of the eight-month civil war in October, the Security Council eased some financial restrictions to allow a resumption of trading. But the freeze on assets that the Central Bank and Foreign Bank held before March remained in place until Friday's delisting.


Britain's Hague welcomed the sanctions committee's decision, saying "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."


"The transitional government must now redouble its efforts to build a transparent and accountable financial system which will underpin a newly prosperous Libya," Hague said.


The White House said unfreezing the assets will give the Libyan government access to most of its worldwide holdings "and will help the new government oversee the country's transition and reconstruction in a responsible manner." The United States is helping Libya with the technical steps to make the assets available as soon as possible, it said.


Libya is still subject to U.N. sanctions, including an arms embargo, and assets of the Qaddafi family and members of his regime remain frozen along with assets of several other financial institutions.


Hague said Britain will continue working with the Libyan government and other countries "to agree the steps required to remove remaining sanctions, so that Libya's assets can be used for the benefit of its people."


The sanctions committee previously ordered the unfreezing of $18 billion of assets, but U.N. officials and diplomats said only about $3 billion had gotten through to Libyan authorities because of a number of problems.


These include concerns over who the money should be released to in Libya and whether it will be used for humanitarian purposes as required in some cases, the diplomats said, speaking on condition of anonymity because discussions were private.
(cbsnews.com)