Releasing frozen overseas assets accumulated by the regime of Muammar Gaddafi could take six months, crippling the ability of Libya’s interim government to fund essential basic infrastructure work, a former UK ambassador to Libya tells MEED.
An estimated $100bn of overseas assets have been frozen across the globe, according to the National Transitional Council, the administrative body set up by opposition forces on 27 February. The US alone is believed to hold at least $30bn.
But releasing the assets could be complicated by political considerations. The freezing of the assets took place under the authority of the UN Security Council. The council voted on 27 February to freeze the assets of Gaddafi and four other officials. The decision was followed by moves in the US, the UK and elsewhere, to freeze the regime’s assets.
For the assets to be unfrozen, the decision may have to be approved by the Security Council. It is unclear, however, whether China and Russia, both permanent members of the Security Council, would immediately back the measure.
To persuade them of the legality of such a move, complex legal proceedings may have to be set in place, which could take several months to resolve.
“The unfreezing of assets is terribly important,” says Oliver Miles, former British Ambassador to Tripoli and chairman of business development company MEC International. “But it’s a matter of political will. Politically speaking, the Security Council froze the assets, so it has to unfreeze them, not necessarily by a resolution, but by agreement.
“I’d like to see the US, France and the UK standing up to Russia and China and telling them to agree to unfreeze the assets now. But I suspect that they might just hand it over to the lawyers, which could take six months. If that happens, all hell will break loose, because no one will be being paid.”