Britain set to unfreeze nearly $140 million in Libyan assets for use by rebel government

Following William Hague’s announcement that the UK recognizes the National Transitional Council (NTC) as the “sole governmental authority” in Libya, the foreign secretary further announced that he would unfreeze funds to support the NTC.

Mr. Hague said that Britain was ready to unfreeze £91 million of assets held in the UK and belonging to the Arabian Gulf Oil Company, a firm controlled by the NTC, explaining that “This Company is operating under the control of the National Transitional Council and we are assured its activities will not benefit any listed entity under (UN) sanctions.”

Mr. Hague also announced that he would work to unfreeze further assets that would be used to support the NTC.

He said that in line with the UN Security Council resolutions, “the UK continues to explore how to unfreeze assets to support the NTC”, and added that “we will work hard with our international partners in the coming weeks to unfreeze further Libyan assets frozen in the UK… including stocks of Libyan currency and other assets of the Libyan central bank.”

However, an article published in Thursday’s Guardian, highlights the fact that, although Mr. Hague assured that the assets unfrozen will be done so “to meet basic needs,” questions have been raised about whether these funds could be used to buy arms for the rebel forces. Arms sales of any kind to Libya are banned under UN sanctions.

A Foreign Office source said that they will be “closely monitoring” the management of the funds made ready to the NTC, and assured that “the assets were unfrozen after the NTC gave assurances that the funds would be use to purchase fuel not arms.”

The Foreign Office furthered that “The Treasury will license out funding for particular transactions in order to ensure that the requests comply with UNSCRs 1970 and 1973 and do not benefit individuals or entities listed under the UN sanctions regime.”

The London-based organization Global Witness, is urging for “Transparent, publicly available accounts for any recovered or unfrozen assets.”

Brendan O’Donnell, a senior campaigner at Global Witness, said that “The most important point is that in order for this to benefit the Libyan people, there needs to be transparent mechanisms to move the funds, so that those handling them are accountable, with very specific details about how the money is managed, signed-off for release and then accounted for in auditable budgets.”

It is reported that £12 billion of Libyan assets have been frozen in the UK, including that of 39 individuals linked to Gaddafi, in addition to banks, investment authorities and other companies as well as £900 million cash in Libyan dinars, which had been produced by a specialist currency printing in northeast England.

(Lucy Stuart of Al Arabiya’s London bureau can be reached at: [email protected])