U.S. to Ask U.N. Security Council to Unfreeze Libyan Assets

The United States said Wednesday it will ask the U.N. Security Council to unfreeze $1.5 billion in Libyan assets for the cash-strapped rebels in a move to bypass opposition from South Africa, which has close ties to Libyan leader Muammar Qaddafi.

The Obama administration has been trying for more than two weeks to get the Security Council committee that monitors sanctions against Libya to unfreeze the assets, but diplomats said South Africa objected. In the committee, agreement of all 15 council nations is required.

To overcome the opposition, the United States decided to introduce a resolution before the full Council, which does not need a unanimous vote.

"We have called a meeting today and will introduce a resolution that would unfreeze roughly $1.5 billion of Libyan assets to meet urgent humanitarian needs," said Mark Kornblau, spokesman for the U.S. Mission to the United Nations.

"We expect it to have the necessary support to pass," a U.S. diplomat said, speaking on condition of anonymity because he was not authorized to speak publicly. "It's unfortunate it had to come to this point, but South Africa is being difficult."

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The U.N. Security Council in February and March ordered all countries to freeze billions of dollars in assets of Qaddafi, key relatives, and members of his regime as well as the Libyan central bank, Libyan investment organizations and the National Oil Corporation. The aim was to punish the regime and cripple its response to protesters demanding change.

Britain, the U.S. and the European Union have called for the quick release of assets to help the opposition National Transitional Council -- now poised to take power -- to rebuild the Libyan economy, restore essential services, reform the police and the army, and pay government salaries.

While the resolution to be introduced Wednesday will just focus on assets frozen in U.S, banks, council diplomats said a second resolution that will cover the U.N.'s mandate in a post-Qaddafi Libya will include proposals to unfreeze assets in other countries.

Council diplomats, speaking on condition of anonymity because they were not authorized to speak publicly, said South Africa agreed to release $500 million for humanitarian aid, but the U.S. said the $1.5 billion was a package and they want release of the entire amount.

South Africa's government has long had ties to Qaddafi, who was a major funder of the now ruling African National Congress' campaign against apartheid.

Diplomats said South Africa wanted to hold up the unfreezing of assets until after a meeting of the African Union, which also has been supportive of Qaddafi, at the end of the week.

The U.S. State Department said Tuesday it wants to make between $1 billion and $1.5 billion in frozen assets available to the National Transitional Council, which appears poised to take control of the country.

The amount represents about half of the Qaddafi regime's liquid assets that have been frozen in the United States. Much of the more than $30 billion in frozen assets in the U.S. is in real estate and other property holdings.

According to a U.S. official, the U.S. has been seeking the release of funds for humanitarian aid administered through non-governmental organizations, for fuel to keep electricity going and lights on, and for the internationally monitored fund set up in May by 22 nations and organizations to help the rebels provide basic items like food and medicine.