Bush lifts Libya oil sanctions

US president George Bush has taken huge steps to restore normal trade and investment ties with Libya, resuming oil imports and most commercial and financial activities as a reward to Muammar Gaddafi for eliminating his weapons of mass destruction.

US president George Bush has taken huge steps to restore normal trade and investment ties with Libya, resuming oil imports and most commercial and financial activities as a reward to Muammar Gaddafi for eliminating his weapons of mass destruction.

Libya’s actions “have made our country and the world safer”, the White House said. But some significant sanctions remain as an inducement to Libya to resolve issues still pending.

In an extraordinary move, Gaddafi agreed last December to dismantle Libya’s biological, chemical and nuclear weapons programmes.

In response, the US lifted a ban on use of American passports to travel to Libya.

“Through its actions, Libya has set a standard that we hope other nations will emulate in rejecting weapons of mass destruction and in working constructively with international organisations to halt the proliferation of the world’s most dangerous systems,” White House press secretary Scott McClellan said.

Last year, Libya removed a major obstacle to more normal relations with the United States by meeting US demands stemming from the bombing of Pan Am flight 103 in 1988 over Lockerbie.

Libya accepted responsibility for the bombing and promised to pay £6.5m (€9.7m) compensation to each family of the 270 victims.

In addition to the economic steps the White House announced, fledgling diplomatic ties will be upgraded to permit the opening of liaison offices in Washington and Tripoli. This would be a prelude to the eventual establishment of normal diplomatic relations.

The easing of sanctions imposed in 1986 and those called for under a 1996 Libya sanctions law will allow a resumption of oil imports from Libya and permit most commercial activities, financial transactions and investments.

The 1996 measure also carried the threat of penalties against foreign companies that made significant investments in Libya’s energy sector. No penalties have been applied.

Democrat Senator Edward Kennedy said that while he welcomed Libya’s decision to disarm, he was surprised that Bush “would so quickly strengthen relations with a dictator who opposes democracy, persecutes his own people, and continues to cause instability in Africa”.

In Tripoli, a Libyan official called Bush’s action a “great step” that enhanced the Gaddafi government’s political stature.

He said the easing of sanctions would benefit US oil companies as well as the Libyan and American people.

According to oil experts, Libyan production nowadays is only about half of what it was in the peak year of 1970 when it reached 3.3 million barrels a day. They say the return of the American oil company technology to Libya should help reverse the decline in the country’s production capacity.

But Bush refused to resume a direct air service to Libya or to release hundreds of millions of dollars in Libyan assets frozen in the United States.

Libya also remains on the US list of state sponsors of terrorism. The State Department says Libya has curbed ties with some – but not all – terrorist groups. Officials says legal claims by Americans based on past terrorist acts are still pending.

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