End of Libya UN sanctions near with draft French deal

France said yesterday families of 170 people killed in the 1989 bombing of a French airliner were close to a compensation deal with Libya that would clear the way for a quick end to UN sanctions against Tripoli.

Foreign Minister Dominique de Villepin said the signing of the deal was imminent and that France would then drop a threat to veto the lifting of sanctions imposed after the 1988 bombing of a Pan Am airliner over the Scottish town of Lockerbie.

"The basis of an accord has been found, it remains to be finalised and that is what will be done in the next few hours," Villepin told French RFI radio.

Villepin did not disclose details of the payout but said it would be made to relatives of all the victims. People of 17 nationalities including Africans, Americans, Britons and Italians were on board the UTA plane, bombed over Niger.

Asked if France would allow the UN Security Council to pass a British draft resolution lifting sanctions against Libya as early as this week, he replied:

"We have always said we back the principle of lifting sanctions and of course this will lead us to draw the consequences very quickly."

Several hours after Villepin spoke, a family representative told Reuters that talks between their lawyer and a private fund run by Saif al-Islam, son of Libyan leader Muammar Gaddafi, had still not managed to clinch a final deal.

"The negotiations are on track and progressing but no deal has been signed," Françoise Rudetzki said by telephone.

The UN suspended sanctions on Libya in 1999 so the new resolution will have no practical impact, especially as Washington has vowed to maintain its own separate sanctions that include a ban on Libyan oil sales to the United States.

Britain moved to permanently end UN sanctions when Tripoli agreed last month to pay $2.7 billion to families of 270 people killed in the airliner bombing over Lockerbie.

That figure dwarfed the $34 million Tripoli paid four years ago after a Paris court had convicted six Libyans in absentia for the killings, including Gaddafi's brother-in-law. Some 70 of the families rejected the offer.

France said it would block any new resolution until the UTA families received a higher payout, raising the prospect of a another showdown in the Security Council, where Paris had spearheaded opposition to the US-led war on Iraq war.

A source familiar with the Libyan position told Reuters Tripoli had offered an extra payment of $300,000 per family.

In an address to the nation on Sunday, Gaddafi said President Jacques Chirac had called him to urge greater compensation for the UTA families.

"Chirac telephoned me asking for a solution for the problem over the compensation, saying he is embarrassed by the families of the victims who asked why the French victims got less money than the Americans (in the Lockerbie case)," said Gaddafi.

"I understand the position of the French president who asked for a human and friendly solution," he said on the anniversary of the 1969 coup that brought him to power.

"We are opening a new page in our relations with the West." He repeated that Libya had no role in the Pan Am or UTA bombings, saying Libya was blamed for both due to disputes with the United States and France in the 1970s and 1980s.

The White House said last month its unilateral sanctions against Tripoli will remain in force until concerns about Libyan weapons programmes were addressed.

Factbox on sanctions on Libya

France said yesterday it expected Libya and families of 170 people killed in the 1989 bombing of a French airliner to sign a compensation deal soon, clearing the way for the end of UN sanctions against Tripoli.

Following is a short factbox on sanctions on Libya.

Sanctions - what are they?
UN sanctions: The UN Security Council imposed an air and arms embargo and a ban on some oil equipment on Libya in 1992 and 1993 to pressure Tripoli to hand over two Libyan suspects for trial.

Sanctions were suspended when Libya turned them over in April 1999. Intelligence agent Abdel Basset al-Megrahi was convicted. The second suspect was acquitted.

To have the UN sanctions permanently lifted, Libya must pay compensation to the families of the victims, take responsibility for the attack, renounce terrorism and agree to cooperate in further investigations.

US sanctions: The United States banned imports of Libyan oil and some exports to Libya in 1982 following a deterioration of relations.

Sanctions were expanded after the 1986 bombing of a Berlin disco to include a total ban on direct import and export trade, commercial contracts, and travel-related activities.

The Iran-Libya Sanctions Act passed in 1996 and amended in 2001 allows the US president to punish non-US firms investing more than $20 million annually in the energy sectors in Libya or Iran.

Lifting bilateral US sanctions requires action by the US government, where there are sharp divisions on the issue. Diplomats and US officials do not expect any quick move.

Britain drafted a UN Security Council resolution to end UN sanctions on Libya when Tripoli agreed last month to pay $2.7 billion to families of Lockerbie victims.

France, a veto-holding Security Council member, threatened to block the move unless Tripoli increased compensation for the 1989 bombing of a French UTA airliner which killed 170 people.

The background - why where the sanctions imposed?
On December 21, 1988, Pan Am Flight 103 from London to New York blew up over Scotland, killing all 259 people aboard the Boeing 747 jumbo jet and 11 residents of the town of Lockerbie.

In late 1991 the United States and Britain accused Libyans Abdel Basset al-Megrahi and Al-Amin Khalifa Fahima of involvement.

In March 1992 UN Security Council Resolution 748 told Libya to surrender the suspects. Libya refused and sanctions were imposed on April 15.

Compensation - what has been offered by Libya?
On April 30, 2003 the Libyan government accepted responsibility for Lockerbie and set up a fund to compensate victims' families. Compensation could reach $10 million per victim.

Under the deal an initial $4 million would be paid for each victim once UN sanctions are ended.

That would be followed by another $4 million if the United States lifts its sanctions and by $2 million if it drops Libya from the US list of state sponsors of terrorism.

If Washington does not take these steps within eight months, the families would receive only $1 million more, bringing the total to $5 million per victim.

Though Libya has never admitted responsibility for the 1989 UTA bombing, it has already paid $34 million to France after a Paris court convicted six Libyans in absentia for the killings.