US Freeze on US$37 Billion in Libyan Assets to Remain For Now

The United States will keep in place its freeze on US$37 billion in Libyan assets until they are absolutely certain that Col. Muammar el-Qaddafi and his supporters can no longer access the funds, said a White House official on Monday.

The freeze had begun in February this year, when the Obama administration decided to impose unilateral sanctions against the Libyan leader and his family, including shutting off access to Libyan government assets.

The United States will keep in place its freeze on US$37 billion in Libyan assets until they are absolutely certain that Col. Muammar el-Qaddafi and his supporters can no longer access the funds, said a White House official on Monday.

The freeze had begun in February this year, when the Obama administration decided to impose unilateral sanctions against the Libyan leader and his family, including shutting off access to Libyan government assets.

Much of these assets were investments made for the Libyan sovereign wealth fund, which many believe to have been worth more than US$70 billion at the beginning of the year, though the value has since been lessened by recent turmoil in world markets.

According to the New York Times, a large portion of the investment fund’s assets, including those in the United States, are tied up in property and in publicly traded or privately held companies. An AFP report also confirmed that only 10 percent of Libya’s total assets had been in cash.

An official from the US Treasury Department told Reuters that while the US’ sanctions against Libya will remain in place for now, the Obama administration had been looking ways whereby some frozen Libyan government assets could be made available to the Transitional National Council (TNC).

Talks have already been ongoing between the US and its global partners on how to fund the Transitional National Council for the time being.

According to US Secretary of State Hillary Clinton’s spokeswoman Victoria Nuland, Mrs Clinton discussed the issue of funding the rebels in a conference call with the Contact Group on Libya, which includes the foreign ministers of France, Germany, Turkey, Norway, Sweden, Canada, Denmark and the United Arab Emirates as well as the prime minister of Qatar and a British Foreign Office minister. 

[quote]”We are trying to accelerate our ability to get some essential funding to the (TNC), particularly for humanitarian needs, particularly for maintenance of essential services,” said Nuland as quoted by AFP.[/quote]

However, most analysts believe that while financial aid from the US may be forthcoming, a full lifting of the sanctions imposed by the Obama administration would require more time.

[quote]“I expect they will use the lifting of sanctions as a point of leverage to make sure they get the kind of government they want to see,” said Mr. Stuart Levey, , a senior fellow for national security and financial integrity at the Council on Foreign Relations to the New York Times. “It is clear that the sanctions policy was a very effective tool. It yielded exactly the thing it was designed to yield.”[/quote]