Libya signs Lockerbie settlement: $10 million per victim

Thursday, August 14, 2003

LONDON Libya has settled a $2.7 billion compensation claim with the families of the victims of the 1988 bombing of a U.S. passenger jet over Lockerbie Scotland.

The North African country was said to have assumed responsibility for the downing of Pan Am Flight 103, in which 270 people were killed. Libya signed an accord to pay $10 million in compensation for each victim.

The settlement was concluded and signed in London on late Wednesday in a meeting between Libyan representatives and attorneys for the families of the victims. This was the last meeting of a four-year effort led by Britain and the United States, neither of which announced the accord.

Western diplomatic sources said Libya formally agreed to the compensation package during a meeting with British and U.S. officials in London on Monday, Middle East Newsline reported. London and Washington were said to have decided to wait until Tripoli issues an announcement of responsibility.

"After 11 hours of session here in London, we signed an escrow agreement with the Libyan delegation and the Bank of International Settlements [BIS]," James Kreindler and Steven Pounian, who represent the families, said in a statement. "We expect the 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. When both events occur, we expect the UN Security Council to enter a resolution lifting the UN sanctions against Libya, which will trigger the payment of four million [dollars] per case."

Under the resolution, Britain and the United States will work to lift the UN embargo from Libya. The embargo was imposed in 1992 and suspended in 1999 after Libya transferred two security agents charged with the Lockerbie bombing to an international court in the Netherlands.

Such an announcement could take place on Thursday, when Libya was expected to relay a letter to the Security Council that identifies Abdel Basset Ali Megrahi as a Libyan agent.

The letter, approved by London and Washington, would not refer to Libyan ruler Moammar Khaddafy. Saad Djebbar, a London-based lawyer familiar with the case, told the Financial Times newspaper on Thursday that Britain and Washington had assured Libya that any admission of responsibility for Lockerbie would not result in additional legal action against Khaddafy or his regime.

The diplomatic sources said that once the Libyan letter is submitted Britain and the United States would respond with a determination that Tripoli has fulfilled the terms of the UN sanctions resolution. The council could then meet as early as next week to lift the sanctions.

In 2001, Ali Megrahi was convicted by a Scottish court in the Netherlands in 2001 for his role in the bombing. A second alleged Libyan agent was cleared.

The sources said Libya would deposit the $2.7 billion in several stages into an escrow account at the Basel-based BIS. The first Libyan payment of $4 million would be relayed once UN sanctions are lifted.

An additional $4 million per victim would be deposited once the United States ends sanctions against Tripoli. But U.S. officials said they expect a vigorous debate within the Bush administration over this issue.

The remaining $2 million per case would be paid when Libya is removed from the State Department list of terrorist sponsors. The timetable for the U.S. steps is eight months from the deposit of the $2.7 billion in the escrow account.

France, a permanent member of the Security Council, could delay the implementation of the deal. The sources said France wants Libya to increase compensation for the victims of a 1989 bombing of a French passenger jet in which 170 people were killed. A French court determined that Libya was behind the bombing and the family of each victim received up to $30,000.

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