Unfreezing Libyan assets

Stephen Beard Aug 24, 2011

Unfreezing Libyan assets

Stephen Beard Aug 24, 2011

BOB MOON: In Libya, now come the spoils. The United States is seeking to release up to $1.5 billion in frozen Libyan assets for use by the Libyan rebels. The European Union is planning a similar move, and British Prime Minister David Cameron says he’d like to follow suit. His government is sitting on around on around 30 percent of $70 billion worth of Libyan assets sequestered around the world under UN sanctions.

But as Stephen Beard reports from London, it may be a long time before the Libyan people get all of their money back.

STEPHEN BEARD: This is the most tangible asset owned by the Gaddafi family in London. A $16 million mansion on a small leafy road in Hampstead Garden Suburb. This neo-Georgian property has eight bedrooms, a swimming pool and a suede-lined cinema. It was occupied by anti-Gaddafi protesters back in March. Nobody seems to be here today.

The U.K. has frozen ownership of this and some $20 billion worth of other Libyan property in this country: bank accounts, stocks, bonds and real estate. Fawas Gerges is Middle East expert at the London School of Economics. He says Britain must start releasing these assets now.

FAWAS GERGES: Libya cannot wait till the oil starts flowing again. Libya needs money now.

He says the rebels need money for food and medical supplies. But perhaps more importantly, they also need it to consolidate their power. Here’s Middle Analyst Shashank Joshi.

SHASHANK JOSHI: One of the ways in which they will have to establish their authority is paying civil servants, policemen and other security forces, without which they are going to lose control of the streets.

Britain says it wants to send more than $1 billion worth of Libyan currency back to the rebel council. These are new banknotes impounded here after being printed by a British company. They could be returned within a week or so. But Joshi says Europe and the U.S. will be very cautious about releasing large sums given the complexity of the rebel coalition.

JOSHI: Nothing would be more embarrassing than to release $1 billion to a arm of the Libyan state only to find that money has gone into financing a insurgency against the rebels in Tripoli itself.

Lawsuits also seem likely to slow down the release of the frozen funds. Individuals whose assets were sequestered because of their links to Gaddafi will no doubt claim they did not loot the Libyan economy. And there are many other obstacles. Charles Gurdon runs a risk analysis group called Meenas.

CHARLES GURDON: It’s much easier to freeze assets than it is to unfreeze them because of both legal and practical reasons, and so I suspect it will be some time before the bulk of the assets will be unfrozen.

Take the Gaddafi mansion here in Hampstead Garden Suburb. On a second visit, I saw signs of life at the property, but the protesters inside were not putting out the welcome mat.

Well, somebody has just come to the window, opened it and then shut it again very swiftly and drawn the blind.

One of the neighbors, Israeli born writer Saul Zadka points out that the protesters have taken their anti-Gaddafi posters off the roof and seem to be settling in as regular residents.

SAUL ZADKA: I think they would like to stay. I’m sure about it! They keep saying all the time that the property belongs to the Libyan people but when the time will com to return the property they will find it very, very difficult to part with it.

Or so he believes. One thing seems certain — it’ll be many months, before the Libyan people will see the full return of the $70 billion worth of assets frozen around the world.

In London, I’m Stephen Beard for Marketplace.

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