Print Edition
TT On-The-Go
TT Feed
580
| U.S. struggles to free money for Libyan rebels |
|
 |
 |
 |
Font Size 
 Despite newly won diplomatic recognition from the United States, Libyan rebels could face a long wait for promised financial relief, say U.S. officials who cite a thicket of red tape that continues to ensnare most of the $34 billion in frozen Libyan assets held in U.S.-controlled bank accounts.Obama administration officials held at least two rounds of meetings over the past week to explore ways to free the money, which the opposition Transitional National Council says it urgently needs to pay salaries and buy ammunition and other critical supplies. But so far, State and Treasury department officials have identified only a small fraction of the vast Libyan holdings that can be quickly freed for the rebels, according to current and former officials familiar with the talks. Even that modest sum—estimated by some officials to be as little as a few hundred million dollars—will likely be released slowly because of bankers’ concerns about possible legal risks in handing over money to someone other than the account holder, the officials said. “All these institutions want assurances that they’ll be protected,” said one U.S. government official who insisted on anonymity in describing internal discussions about money for the rebels. “This is something that is going to take some time.” The surprising difficulties over releasing money are latest in a series of frustrations for the rebel group, which had hoped that diplomatic recognition would lead to the freeing of billions of dollars in frozen assets controlled by autocratic leader Moammar Gaddafi. TNC officials say billions are needed urgently to keep the transitional government afloat and allow their troops to press their five-month-long fight against Gaddafi loyalists. Secretary of State Hillary Rodham Clinton announced on July 15 that the United States would recognize the TNC as Libya’s official government, a move that itself followed months of legal wrangling over whether Washington could grant formal recognition to a group that does not control large swaths of the country. But while the rebels hailed Clinton’s announcement, the opposition group has seen few benefits so far. On Friday, the TNC’s representative in Washington was still waiting for word on when he could move into the empty Libyan Embassy. Ali Aujali, who was Gaddafi’s ambassador before resigning earlier this year, said he needed “just the State Department to finalize the issue” before he moved back in. Aujali met with State Department officials this week to implore them to unfreeze some of the Libyan assets in U.S. institutions. But he acknowledged afterward that it would take weeks before the rebels would see the cash. “The money is really needed in Libya, badly needed,” he said. “I think the Americans recognize this is very important,” he said, adding that the U.S. diplomatic recognition “will help many other countries to change their position to send the money” to the TNC. Officials with the TNC have said they are not seeking the immediate handover of all $34 billion in frozen assets, a sum they acknowledge the council may not yet be able to handle. But Aujali said at least $4 billion was needed by his government would ensure that markets were stocked with critical supplies and the TNC could maintain credibility with the population. The rebels also need weapons, he said. “Gaddafi is not killing people using potatoes or tomatoes, he is using real weapons,” he said. One option, he said, might be using the frozen funds as collateral. “We can have loans against this frozen money. That’s what Turkey did,” Augali said, referring to a $200 million payment from the Turks. The TNC signed a contract last month with the lobbying powerhouse Patton Boggs to help them win diplomatic recognition from the U.S. government and gain access to the frozen funds. The contract allowed payments of up to $50,000 a month to the Washington firm, but also stipulated that Patton Boggs would not seek payment until the TNC was on sound financial footing. U.S. and Libyan officials cite several hurdles in releasing money to the rebels. Chief among them are legally binding economic sanctions imposed against the Gaddafi regime by the UN Security Council. Unfreezing the money, diplomats said, would require a consensus vote of the UN sanctions committee, which includes countries such as Russia and China that are skeptical of NATO’s military campaign in Libya. Other difficulties stem from the fact that Libya’s financial holdings are widely dispersed among financial institutions that are subject to the laws of foreign governments, some of whom do not yet recognize the TNC as Libya’s government, diplomats said. Indeed, some U.S. legal experts continue to question whether the U.S. recognition of the TNC was legally sound. John B. Bellinger III, who was department’s legal counsel during the George W. Bush administration, said recognition “raises difficult questions as to who has the international obligations of Libya under international law” -- such as upholding the Vienna convention, which requires governments to provide access to detained foreigners. “Who owes that obligation? Is it that the old Libyan government under Gaddafi or the new transitional council?” Bellinger asked in a Washington Post interview But other experts on international law note a long tradition by U.S. governments to use diplomatic recognition as a policy instrument, backing new governments whenever there’s a compelling U.S. interest for doing so. “Lawyers will always come up with elaborate arguments,” said Philip Zelikow, a former Counselor to the State Department. “The important questions are: What are the facts on the ground, and what is it that you want to achieve.” Rather than debating the issue for months, the administration should have granted recognition months ago, thus avoiding the current problems with frozen assets, he said. “Back then, it might have been a decisive factor,” he said. “It could have knocked the wind of Gaddafi’s sails.” (Source: The Washington Post)   Socialize this Subscribe to our RSS feed to stay in touch and receive all of TT updates right in your feed reader
|