APNewsBreak: UK seeks to release Libyan funds

AP News
Posted: Aug 26, 2011 1:19 PM

Britain is seeking approval to release about $1.6 billion in seized Libyan bank notes to help the country's rebel government pay the salaries of public sector workers, a government official said Friday.

British diplomats have opened discussions with members of the U.N. Security Council committee monitoring sanctions against Libya to authorize a proposal to urgently provide the funds.

The British official, who requested anonymity to discuss the details, said the government hopes to release about 1 billion pounds worth ($1.6 billion) of Libyan dinars which were printed in the U.K.

In March, Britain blocked the export of the bank notes, which are manufactured by British currency printer De La Rue.

Mahmoud Jibril, the head of Libya's rebel National Transitional Council, said Friday the interim government needs about $5 billion in frozen assets to pay state salaries and maintain essential services in Libya, including the army and police force.

The United States won approval on Thursday to release $1.5 billion in frozen Libyan assets held in American banks to help the cash-strapped rebels. About $500 million were earmarked to pay for fuel. South Africa had initially blocked agreement in the Security Council committee, but relented Thursday following international pressure.

British Prime Minister David Cameron called South African President Jacob Zuma to push him to back the U.S. plan. In the call, Cameron "emphasized the need for strong international leadership in support of the Libyan people," the British leader's office said in a statement.

Following an African Union summit, Zuma said Friday that the regional bloc would not yet recognize Jibril's council as Libya's new government.

Italy said Thursday that it hopes to be able to release about $505 million for the rebels, while about $110 billion in Libyan assets are being held in banks worldwide, according to analysts.

Diplomats at the U.N. are working on a new United Nations Security Council resolution which would lift the sanctions on Libyan assets, freeing up tens of billions of dollars for the country's interim government.

The British official said that it is expected a resolution could be drafted next week.