Libya sets up Lockerbie fund, U.S. to lift sanctions

Wednesday, April 30, 2003

LONDON The United States plans to lift sanctions and remove Libya from the State Department list of terrorist sponsors as part of a $2.7 billion compensation package pledged by Tripoli for its role in the 1988 bombing of a U.S. airliner over Lockerbie, Scotland.

Western diplomatic sources said the compensation package was approved in March and will be implemented over the next few months. They said the settlement would formally end Libya's isolation in the international community and restore diplomatic and trade links between Tripoli and Washington.

On Tuesday, Libya outlined the Lockerbie compensation package and said it agreed to pay $10 million for each of the 270 people aboard the Pan Am airliner that exploded in 1988. In exchange, Libya said, the United Nations and the United States would remove all sanctions from Libya.

Neither Britain nor the United States responded to the Libyan report. Representatives from the three countries were said to have last met in London on March 11, Middle East Newsline reported.

Libyan Foreign Minister Abdel Rahman Shalgham detailed the Lockerbie settlement in a series of interviews with Arab and Western media on Tuesday.

Shalgham said Libya has agreed to provide an initial payment of $4 million for each victim of Lockerbie. At that point, he said, the UN would lift sanctions from Libya imposed in 1992 and frozen in 1999.

The United States would then lift its separate sanctions after Libyan payment of another $4 million for each Lockerbie victim. When Tripoli fulfills its compensation requirements, Washington would then remove Libya from the State Department list of terrorist sponsors, Shalgham said.

The foreign minister did not provide a timetable for the payments. But he said Libya is establishing a compensation fund that could begin operations over the next few weeks.

The first payment of $4 million, Shalgham said, has been arranged between Tripoli and attorneys for the families of Lockerbie victims. The two other payments would be coordinated with the U.S. government.

Shalgham said Libya has also agreed to accept responsibility for the air attack. In January 2001, a Scottish court convicted one of two Libyan agents charged with the bombing.

U.S. officials confirmed the settlement. But they said other unspecified measures would have to be taken for the restoration of U.S. diplomatic relations with Tripoli.

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