‘Reckless folly’ to allow Libya access to frozen funds

Senior British MP says restrictions on Libya’s sovereign wealth fund could be eased

Libya's leader Muammar Gaddafi adjusts his glasses at the Africa-South America Summit on Margarita Island in this September 27, 2009 file photo. Gaddafi died of wounds suffered in his capture near his hometown of Sirte on October 20, 2011, a senior NTC military official said. National Transitional Council official Abdel Majid Mlegta told Reuters earlier that Gaddafi was captured and wounded in both legs at dawn on Thursday as he tried to flee in a convoy which NATO warplanes attacked.  REUTERS/Carlos Garcia Rawlins/Files (VENEZUELA - Tags: POLITICS) *** Local Caption ***  SIN303_LIBYA_1020_11.JPG

A senior British MP said it would be “reckless folly” to let Libya’s sovereign wealth fund invest frozen assets before the country settled terrorism compensation claims connected to the regime of Muammar Qaddafi.

Simon Hoare, chairman of a parliamentary committee on Northern Ireland, said some of the frozen funds could be used to pay the injured and bereaved from Libyan-backed terrorist attacks in the UK.

A tweet sent from the committee's official account features Mr Hoare's letter in full.

Quote
Until the issue of compensation to victims of Libya-facilitated IRA terrorism is resolved, I am sure that you would agree it would be reckless folly to allow any modifications of the terms under which Qaddafi-era assets are frozen in the UK

The Qaddafi regime supplied guns and explosives to the Irish Republican Army during three decades of violence that killed more than 3,500 people.

Mr Hoare's intervention came after the head of Libya's sovereign wealth fund said last month that it would ask the UN to let it invest billions of dollars sitting idle in its accounts after nearly a decade of sanctions.

The chairman of the Libyan Investment Authority, Ali  Mohamed, told Reuters that he wanted a partial lifting of the terms to allow the fund to recoup some of its losses.

“Until the issue of compensation to victims of Libya-facilitated IRA terrorism is resolved, I am sure that you would agree it would be reckless folly to allow any modifications of the terms under which Qaddafi-era assets are frozen in the UK,” Mr Hoare wrote in a letter to the UK Foreign Secretary, Dominic Raab.

The worldwide assets of the Libyan sovereign wealth fund were valued at $67 billion (Dh246bn) in 2012. About £11.2bn (Dh55.5bn) is held in the UK.

Mr Hoare said there might be a way to resolve the issue by paying the victims of Libyan-backed terrorism during the armed conflict in Northern Ireland known as the Troubles, which ended with a 1998 political agreement.

He also demanded that Mr Raab publish a report examining the compensation issue.

The independent report was sent to the British government in March but has not yet been made public.

Mr Hoare said the report needed to be published to achieve a “just outcome”.

Victims of Libyan-backed terrorism have said they are preparing legal action to force the report's publication.

The families of victims of the Libyan-provided Semtex explosive have been told they should launch individual claims rather than rely on the Conservative government of Boris Johnson to negotiate with a future Libyan government.

But they said the suggestion was impractical and compared the government’s stance to that of the US, which passed laws in 2008 that allowed the Qaddafi regime to pay $1bn in compensation to American victims.

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