US scraps trade embargo on Libya in WMD reward
US President Bush on Monday formally ended the broad U.S. trade embargo on Libya to reward it for giving up weapons of mass destruction but left in place some U.S. terrorism-related sanctions.
The president's action is partly symbolic because it simply makes permanent his April decision to suspend most commercial sanctions and allow U.S. firms to invest in Libya and buy its oil for the first time since 1986.
But the moves, which take effect on Tuesday, will also end remaining restrictions on U.S.-Libyan aviation and the State Department said they will unblock about $1.3 billion in frozen Libyan and other assets -- steps Bush did not take in April.
The decision to scrap the sanctions outright showed Bush's confidence that Libya had kept its Dec. 19 promise to give up nuclear, chemical and biological arms and that verification procedures were in place to ensure it stayed that way.
Libya has permitted the physical removal of much of its nuclear weapons program, secured its chemical agents and destroyed chemical munitions, opened up suspect sites and agreed to stop military trade with military trade with nations that may proliferate.
"Libya's efforts open the path to better relations with the United States and other free nations," White House spokesman Scott McClellan said in a statement.
Bush's decision was also expected to trigger the release of an additional $4 million in Libyan compensation to families of each of the 270 people killed when Pan Am Flight 103 blew up over Lockerbie, Scotland in 1988, killing everyone on board.
But Bush did not drop Libya from the U.S. list of state sponsors of terrorism and the White House said it was "seriously concerned" about allegations Libyan leader Muammar Gaddafi ordered the assassination of Saudi Crown Prince Abdullah.
Libya's presence on the list bars it from receiving U.S. arms exports, controls sales of items with military and civilian uses, limits U.S. aid and requires Washington to vote against loans from international financial institutions.
Bush revoked four executive orders that had barred most trade with Libya, restricted aviation, froze Libyan assets in the United States and prevented the import of Libyan oil.
In so doing, he terminated a "national emergency" declared by former U.S. President Ronald Reagan in 1986 after a series of what Washington viewed as Libyan-sponsored terrorist acts.
Bush's moves end the need for U.S. Treasury Department licenses to do business with Libya and permits direct air service and regular flights between the two nations.
Texas-based Continental Airlines Inc. applied on Monday for permission to provide air service to Tripoli by selling tickets under its name on Dutch airline KLM, a part of Air France-KLM, that would fly the route.
"Those steps would not be taken until we were satisfied on the WMD front and we are," said a senior U.S. official who followed the talks closely, saying Washington had "reasonable confidence" Tripoli had met its Dec. 19 commitments.
Bush acted after Tripoli agreed to establish a U.S., U.K., Libyan commission to address any future WMD concerns and to eliminate its Scud B missiles over five years, meeting a U.S. demand it give up missiles able to carry a 1,100-pound payload at least 185 miles, the U.S. official said.
The dramatic improvement in U.S.-Libyan relations began after Libya last year took responsibility for the Lockerbie bombing and turned over $2.7 billion, or $10 million per victim, as part of a phased compensation agreement.
The families got $4 million last year after the U.N. ended its sanctions on Libya. They are due to get another $4 million now that U.S. commercial sanctions are lifted and $2 million more if Washington drops Tripoli from the state sponsors list.