Relations with Libya

• Having fulfilled the requirements of UN Security Resolution 1192, UN sanctions were lifted against Libya in September 2003 and the Pan Am 103 families received over $1 billion of a private, phased compensation settlement agreement.
• Libya’s historic December 2003 decisions to dismantle its WMD programs and MTCR-class missile systems and renounce terrorism created the foundation for a rapprochement in U.S.-Libyan bilateral relations.
• In February 2004, the United States Interests Section in Tripoli opened under the protection of the Belgian Embassy. At the same time, in response to the removal of nuclear weapon design documents, centrifuge components, and containers of uranium hexafluoride as well as SCUD C missile guidance sets, the U.S. announced the revocation of passport restrictions on U.S. travel to Libya and an invitation to Libya to establish an interests section in Washington.
• After further cooperation on WMD, in April 2004, the U.S. permitted the resumption of most commercial activity and financial transactions with Libya, terminated the Libya portion of the Iran-Libya Sanctions Act, and dropped objections to Libyan membership in the WTO.
• In June 2004, the U.S. Liaison Office in Tripoli opened and academic and professional exchanges between the two countries began. In July 2004, Libya established its Liaison Office in Washington.
• In September 2004, all of Libya’s WMD and MTCR-class programs were declared destroyed/removed or slated for destruction pursuant to trilateral agreements or international regimes. The President then terminated the national emergency for Libya and the remaining requirements for OFAC licenses, which resulted in the release of Libya’s blocked assets and authorization of aviation activities. The Pan Am 103 families received an additional $1 billion pursuant to their private settlement agreement.
• In May 2006, the U.S. began the process of rescinding Libya’s designation as a state sponsor of terrorism, upgraded the U.S. diplomatic presence in Tripoli to an embassy, and certified that Libya is cooperating fully with USG anti-terrorism efforts. On June 30, 2006, the U.S. formally rescinded Libya’s designation as a state sponsor of terrorism.
• In 2007, there were a series of senior-level meetings between U.S. and Libyan officials that focused on broad array of issues, including regional security and counterterrorism cooperation. Secretary Rice, in her meeting with Foreign Minister Shalgam on the margins of the UN General Assembly, discussed the resolution of outstanding issues and charting a path for future cooperation. On July 11, the President nominated career diplomat Gene A. Cretz as U.S. Ambassador to Libya.
• On January 3, 2008, Foreign Minister Shalgam made an official visit to Washington, the first official visit by a Libyan Foreign Minister since 1972. During which the United States and Libya signed the Science and Technology Cooperation Agreement, their first bilateral agreement since the downgrading of diplomatic relations.
• In January 2008, the 2008 National Defense Authorization Act was enacted. Section 1083 of that act enabled claimants with suits filed in U.S. courts against Libya for past acts of terror to seek pre-judgment attachment and liens against Libya and third-parties, such as U.S. companies, doing business in Libya. The same month, the D.C. Circuit court issued a judgment in the Union des Transports Aériens (UTA) flight 772 case for over $6 billion against the Libyan government and several of its officials.
• Recognizing the need for comprehensive resolution of all claims issues in order to pursue full normalization of relations, the U.S. and Libya began negotiations in May 2008 on a comprehensive claims settlement agreement to resolve outstanding claims of American and Libyan nationals against each country in their respective courts. Negotiators from both sides met regularly from May until August.
• On August 4, 2008, the President signed into law the Libyan Claims Resolution Act, a bipartisan bill which was passed by the U.S. Congress on July 31. The Act provides for the restoration of Libya’s sovereign, diplomatic, and official immunities before U.S. courts if the Secretary of State certifies that the United States Government has received sufficient funds to resolve outstanding terrorism-related death and physical injury claims against Libya.
• On August 14, the United States and Libya signed a comprehensive claims settlement agreement in Tripoli.