Libya begins $2.7 billion transfer

Libya has begun transferring $2.7 billion to the Bank for International Settlements to compensate families of the victims of the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland, a US official said yesterday.

"The Libyans are beginning the transfer of funds. Because it is such a large sum, $2.7 billion, it will not be deposited all at once. Some will go in tomorrow. Some could go in Friday," said the official, who asked not to be identified.

After years of negotiations, Libya and most of the families of the 259 people killed on the Boeing jumbo jet and the 11 who died on the ground last week signed an agreement under which Libya would pay up to $10 million in compensation per victim.

The transfer of the funds would meet the final British and US condition for permanently lifting United Nations sanctions that were imposed on Libya in 1992 and suspended in 1999 after it turned over two Libyan suspects for trial in the bombing.

Under the deal between Libya and the victims' families, an initial $4 million would be paid once UN sanctions are ended. This would be followed by another $4 million if Washington lifts its sanctions - something US officials have said will not happen any time soon - and $2 million more when Libya is dropped from the US list of state sponsors of terrorism.