The White House recently announced two phases of modification of the sanctions imposed on Libya under the International Emergency Economic Powers Act of 1977 (IEEPA). In addition, the provisions of the Iran-Libya Sanctions Act that involved Libya have been terminated. The recent changes mark the end of the decade-long sanctions against Libya that were imposed following the terrorist bombing of Pan Am flight 103 over Lockerbie, Scotland in 1988 and France’s Union de Transports Aeriens (UTA) flight 722 over the Niger in 1989. This relaxation resulted from Libya’s decision to compensate families of Pan Am 103 victims and Libya’s significant steps taken toward eliminating weapons of mass destruction. Libya has further pledged to abandon all support of terrorism. In response, the Treasury Department’s Office of Foreign Assets Control (OFAC) issued a General License (LSR § 550.575) which came into effect on April 29, 2004, authorizing most new transactions with Libya. U.S. companies and financial institutions are now allowed to conduct business activities with and invest in Libya.
OFAC issued an initial license on February 26, 2004 allowing U.S. citizens and businesses to enter into negotiations regarding future business arrangements in anticipation of termination of the U.S. sanctions, which seemed forthcoming. However, involved parties remained restricted from entering into any binding contractual arrangements, extending credit, purchasing securities, or importing or exporting any goods into Libya. On April 23, 2004, the White House and OFAC announced a further relaxation of the sanctions imposed against Libya, which came into effect on April 29, 2004. According to the Press Release given by the Office of Public Affairs on April 23, 2004, the OFAC General License will permit the following:
Despite the recent relaxations, some restrictions still apply. As long as Libya remains on the State Sponsors of Terrorism List, export items such as those with military potential, will remain prohibited. The transportation-related transactions that were not eased under the first License issued on February 26 of this year will likewise remain prohibited. Such prohibitions include flights to or from Libya by U.S. air carriers, flights to or from the U.S. by Libyan air carriers, and any flights that involve code sharing.2
For more information about current Libyan developments, please contact Conan P. Grames at 801-328-3600 or by e-mail at cgrames@kmclaw.com. Also included for your convenience are a few links to federal announcements/documentation relating to the Libyan sanctions.
1White House Press Secretary, “U.S. Eases Economic Embargo Against Libya,” http://www.whitehouse.gov/news/releases/2004/04/print/20040423-9.html
2Office of Foreign Assets Control, “Libyan Sanctions Regulations”, 31 CFR PART 550, http://www.treas.gov/offices/eotffc/ofac/actions/20040423.html