By Louis Charbonneau
UNITED NATIONS (Reuters) - Britain has circulated a draft resolution that would ease U.N. sanctions against Libya to members of the Security Council and hopes to vote on it this week, diplomats said on Wednesday.
The draft would have the council begin lifting six-month-old punitive measures imposed on Libya when its former leader Muammar Gaddafi was overseeing a crackdown against pro-democracy demonstrators across the country.
According to the draft resolution, obtained by Reuters, the resolution would ask the 15-nation council to ease sanctions against Libya's National Oil Corp and central bank to enable those two key institutions to start functioning.
The draft would have the council declare "its determination to ensure that assets frozen pursuant to (U.N. sanctions resolutions) shall as soon as possible be made available to and for the benefit of the people of Libya."
The National Oil Corp would become free of sanctions, which should enable the oil-producing OPEC member to begin exporting crude more easily once the resolution is approved. But some of the sanctions on other firms would remain in place.
Assets of the central bank, the Libyan Foreign Bank, Libyan Investment Authority, and the Libyan Africa Investment Portfolio that have been frozen abroad by U.N. member states are to remain frozen for the time being, unless they have been exempted from the freeze by the council's sanctions committee.
Such assets, the draft says, can only be released on the basis of a decision of the Security Council's Libya sanctions committee, which one senior Security Council diplomat said has already unfrozen $16 billion of Libyan assets to date.
The council diplomat described the easing as a "progressive or controlled lifting of the asset freeze." Speaking on condition of anonymity, he added that Britain, the drafter of the resolution, hoped to put it to a vote by Friday.
ARMS EMBARGO, NO-FLY ZONE REMAIN IN PLACE
Libya's frozen assets have been held by various governments over the last half year in compliance with the U.N. sanctions regime imposed in February and March.
The draft resolution does not call for an end to the no-fly zone over the North African state or an end to NATO's authorization to protect civilians.
But it does call for an easing of the arms embargo to enable Libyan authorities and U.N. security officials to import weapons needed to maintain security.
The draft resolution also follows recommendations from U.N. Secretary-General Ban Ki-moon, who asked the council to establish a U.N. mission to help advise Libya's transitional leadership on restoring public order and security and preparing for democratic elections.
The initial order for a mission would be valid for three months. The mission would not include peacekeepers or U.N. police to help maintain order in the country. But the mission, which diplomats say would have up to 200 staff, would help the government promote human rights, the draft says.
Little resistance to the resolution is expected in the council, diplomats say, since nearly all members have concluded that Gaddafi is effectively no longer in control of Libya.
Russia and China, which worked hard to prevent the Security Council from waiving certain sanctions to aid the rebel forces during the Libyan civil war, are expected to support the resolution, diplomats say.
Moscow and Beijing were highly critical of the U.N.-approved NATO intervention in Libya but both have recently recognized Libya's National Transitional Council as the country's legitimate government.
(Editing by Vicki Allen)