Order Code RL33142
Libya: Background and
U.S. Relations
Updated August 6, 2008
Christopher M. Blanchard
Analyst in Middle Eastern Affairs
Foreign Affairs, Defense, and Trade Division

---

Libya: Background and U.S. Relations
Summary
Libyan-U.S. rapprochement has unfolded gradually since 2003, when the Libyan
government accepted responsibility for the actions of its personnel in regard to the
1988 bombing of Pan Am Flight 103 and announced its decision to eliminate its
weapons of mass destruction and long-range missile programs. In response, U.S.
sanctions were gradually removed, and, on May 15, 2006, the Bush Administration
announced its intention to restore full diplomatic relations with Libya and to rescind
Libya’s listing as a state sponsor of terrorism. Full diplomatic relations were restored
on May 31, 2006 when the United States upgraded its Liaison Office in Tripoli to an
Embassy. Libya was removed from the list of state sponsors of terrorism and states
not fully cooperating with U.S. counterterrorism efforts in June 2006.
From June 2006 through July 2008, U.S.-Libyan re-engagement was hindered
by disagreements over outstanding legal claims related to U.S. citizens killed or
injured in past Libyan-sponsored or supported terrorist attacks. Administration
officials argued that broader normalization of U.S.-Libyan relations would provide
opportunities for the United States to address specific issues of potential concern to
Congress, including the outstanding legal claims, political and economic reform, the
development of Libyan energy resources, and human rights. However, Congress took
several steps to limit U.S.-Libyan re-engagement as a means of encouraging the
Libyan government to settle outstanding terrorism cases in good faith prior to further
normalization. For example, Congress enacted Section 654 of the Consolidated
Appropriations Act FY2008 (P.L. 110-161, H.R. 2764), which prohibits the
obligation or expenditure of appropriated funds “to finance directly any assistance
for Libya” unless the Administration certifies that settlements have been completed.
On May 29, 2008, the U.S. Department of State and the Libyan government
announced that they had begun negotiating the terms of a “claims settlement
agreement” for outstanding legal cases. Many observers linked the announcement to
the enactment of Section 1083 of P.L. 110-181, the National Defense Authorization
Act for FY2008, which altered the legal environment in which terrorism cases
involving Libya are being considered by amending the Foreign Sovereign Immunities
Act (FSIA) (28 U.S.C.§§ 1602-1611) to make Libyan property subject to attachment
in relation to damages awarded to plaintiffs. In conjunction with apparent progress
in U.S.-Libyan negotiations, on July 31, Congress passed S. 3370, the Libyan Claims
Resolution Act, which authorizes the creation of an entity with legal immunity to
receive settlement funds from Libya and distribute them to U.S. plaintiffs. The
Administration’s certification of the receipt of sufficient funds would result in the
rescission of the applicability of the provisions of Section 1083 to Libya. Once
completed, the arrangements could clear the way for a series of long-anticipated
diplomatic steps, including the confirmation of the U.S. Ambassador-designate to
Libya or a visit to Tripoli by U.S. Secretary of State Condoleezza Rice.
This report provides background information on Libya and U.S.-Libyan
relations; profiles Libyan leader Muammar al Qadhafi; discusses Libya’s political
and economic reform efforts; and reviews current issues of potential congressional
interest. It will be updated to reflect major developments.

---

Contents
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background and Recent History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Qadhafi Era . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Green Book and Qadhafi’s Ideology . . . . . . . . . . . . . . . . . . . . . . . 3
Terrorism and Confrontation with the United States . . . . . . . . . . . . . . . 4
Qadhafi’s Arab-Israeli Intransigence . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
International Isolation and Signs of Change . . . . . . . . . . . . . . . . . . . . . 5
Current Issues in U.S.-Libyan Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Reestablishing Normal Bilateral Relations . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Congressional Efforts on Behalf of U.S. Terrorism Victims . . . . . . . . . . . . . 8
Background: Pan Am Flight 103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Background: La Belle and UTA Flight 772 . . . . . . . . . . . . . . . . . . . . . . 9
FY2008 Foreign Operations Request and Assistance Prohibition . . . . 10
New Embassy Construction Delayed . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Ambassador Nomination Held . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1083 of P.L. 110-181 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Analysis and Potential Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
FY2009 Foreign Operations Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Post-9/11 Counterterrorism Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Libyan Foreign Fighters in Iraq . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Lockerbie Appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
The Return of U.S. Oil Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Political and Economic Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Muammar al Qadhafi: A Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Political Dynamics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Government Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
The “Authority of the People” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Opposition Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Exiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
The Muslim Brotherhood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Libyan Islamic Fighting Group (LIFG) . . . . . . . . . . . . . . . . . . . . . . . . 23
Political Reform and Human Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Legal and Institutional Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Human Rights Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Fathi al Jahmi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Libyan Foreign Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Energy and the Libyan Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Economic Reform and Infrastructure Development . . . . . . . . . . . . . . 29
Oil Reserves and Production Capacity . . . . . . . . . . . . . . . . . . . . . . . . . 29
New Exploration and Production-Sharing Agreements . . . . . . . . . . . . 30
Natural Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Military Profile and WMD Disarmament . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
The Libyan Military . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

---

Structure, Training, and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Arms Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
WMD Programs and Disarmament . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Nuclear, Chemical, and Ballistic Missile Programs . . . . . . . . . . . . . . 33
Termination of WMD and Missile Programs . . . . . . . . . . . . . . . . . . . 35
Motives for Disarmament . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
International Controls and Inspections . . . . . . . . . . . . . . . . . . . . . . . . 36
Further Reading and Historical Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Appendix A: Libya’s Pre-Qadhafi History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Libya’s Colonial Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
The Ottoman Empire and Qaramanli Dynasty . . . . . . . . . . . . . . . . . . . 39
“The Shores of Tripoli” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Italian Annexation and Post War Uncertainty . . . . . . . . . . . . . . . . . . . 40
Independence and Monarchy, 1951-1969 . . . . . . . . . . . . . . . . . . . . . . . . . . 40
List of Figures
Figure 1. Map of Libya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
List of Tables
Table 1. Libyan Military Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

---

Libya: Background and U.S. Relations
Recent Developments
On July 31, 2008, Congress adopted S. 3370, the Libyan Claims Resolution Act,
which states the support of Congress for “the President in his efforts to provide fair
compensation to all nationals of the United States who have terrorism-related claims
against Libya through a comprehensive settlement of claims by such nationals against
Libya pursuant to an international agreement between the United States and Libya as
a part of the process of restoring normal relations between Libya and the United
States.” The bill authorizes the Secretary of State to create an entity with legal
immunity to receive settlement funds from Libya and distribute them to U.S.
plaintiffs. U.S. State Department officials continue to negotiate with Libyan
government representatives over the final terms of a comprehensive settlement
agreement. Libya reportedly is seeking compensation for civilian victims of 1986
U.S. air strikes on Libya.
Under the terms of S. 3370, once the Administration certifies the receipt by the
claims entity of sufficient funds from Libya, several terrorism liability provisions will
no longer be applicable to Libya, including Section 1083 of P.L. 110-181, the
National Defense Authorization Act for FY2008. Section 1083 altered the legal
environment in which terrorism cases involving Libya are being considered by
amending the Foreign Sovereign Immunities Act (FSIA) (28 U.S.C.§§ 1602-1611)
to make Libyan property subject to attachment in relation to potential damage
awards. The passage of S. 3370 is being viewed by some supporters of U.S.-Libyan
engagement as an important step in facilitating the resolution of outstanding legal
claims, which have delayed a full reestablishment of U.S. Libyan relations since
Libya was removed from the U.S. list of state sponsors of terrorism in 2006.
Section 654 of the Consolidated Appropriations Act FY2008 (P.L. 110-161,
H.R. 2764, signed December 26, 2007), prohibits the obligation or expenditure of
appropriated funds “to finance directly any assistance for Libya,” unless the Secretary
of State certifies “that the Government of Libya has made the final settlement
payments to the Pan Am 103 victims’ families, paid to the LaBelle Disco bombing
victims the agreed upon settlement amounts, and is engaging in good faith settlement
discussions regarding other relevant terrorism cases.” A certification issued pursuant
to S. 3370 would satisfy the Section 654 requirement. The Administration had
requested $1.15 million in funding for FY2008 and is requesting $1.1 million for
military education and training and border security assistance for Libya for FY2009.
On March 31, 2008, the U.S. Department of State issued a statement urging “the
Libyan government to fulfill their promise to release without condition” prominent
political activist Fathi el Jahmi. As of early August 2008, El Jahmi remained
detained and was reported to be in poor health.

---

CRS-2
Background and Recent History
The north African territory that now composes the Great Socialist People’s
Libyan Arab Jamahirriya1 has a long cultural history as a center of Phoenician,
Carthaginian, Roman, Berber, and Arab civilizations. Modern Libya’s distinct
regions and tribally-influenced society create a complex political environment that
is made up of diverse constituencies from northwestern Tripolitania, northeastern
Cyrenaica, and the more remote southwestern Fezzan (see Figure 1). Significant
economic and political changes have occurred since Libya became independent in
1951. These changes have been fueled by the country’s emergence from Italian
colonization, the discovery of vast oil and natural gas reserves, and the domination
of political life by the authoritarian government of Muammar Al Qadhafi,2 who
overthrew the Libyan monarchy on September 1, 1969. The legacies of anti-Italian
insurgency and World War II combat, international pressures associated with the
Cold War, and complex relationships with Arab and African neighbors have all
shaped Libya’s development. See Appendix A for a discussion of Libya’s pre-
Qadhafi history, other background information, and a list of historical resources.
Figure 1. Map of Libya
Source: Map Resources. Adapted by CRS.
1 The Arabic word jamahirriya means “state of the masses” or “peoples’ authority” and was
added to Libya’s official name in 1978 by Col. Muammar Qadhafi to reflect Libya’s
nominally decentralized political system. The adjective ‘great’ was added in 1986.
2 Multiple spellings of Muammar Al Qadhafi’s first and last names are used in the Western
press. This report uses a phonetic spelling; others reflect varying pronunciations.

---

CRS-3
The Qadhafi Era

On September 1, 1969, a cabal of Libyan military officers led by army Captain
Muammar al Qadhafi seized important government institutions in the eastern city of
Benghazi and abolished the Libyan monarchy. Facing negligible internal resistance,
the leadership of the Movement, known as the Revolutionary Command Council
(RCC), established authority and announced that it would direct the activities of a
new cabinet. The RCC also made statements affirming Libya’s Arab and Islamic
identity and its support for the Palestinian people. After renaming the country the
Libyan Arab Republic, the RCC announced the promotion of Captain Qadhafi to
Colonel and named him commander in chief of Libya’s armed forces.3 Like Qadhafi,
the other members of the RCC were pan-Arabist and socialist ideologues from rural
and somewhat marginalized communities. The United States did not oppose the
1969 coup, as the RCC initially presented an anti-Soviet and reformist platform.
Colonel Qadhafi and the RCC focused intensely in their early years in power on
taking steps to safeguard “national independence” and consolidate their rule through
populist and nationalist political and economic programs. The members of the RCC
were determined to secure the immediate and full withdrawal of British and U.S.
forces from military bases in Libya, which occurred on March 28 and June 11, 1970,
respectively. Italian expatriates were expelled and their assets were confiscated on
October 7, 1970. All three dates subsequently were declared national holidays. The
new government also pressured U.S. and other foreign oil companies to renegotiate
oil production contracts and cede a larger share of production revenues. Some
British and U.S. oil operations eventually were nationalized. In the early 1970s, the
RCC gradually reversed its stance on its initially icy relationship with the Soviet
Union and extended Libyan support to revolutionary, anti-Western, and anti-Israeli
movements across Africa, Europe, Asia, and the Middle East. These policies
contributed to a rapid souring of U.S.-Libyan political relations, although economic
relations, particularly U.S. oil purchases from Libya, remained steady.
The Green Book and Qadhafi’s Ideology. Beginning in the early-1970s,
Muammar al Qadhafi and his regime carried out drastic and frequent reorganizations
of Libyan political and economic life in line with his “Third Universal Theory.” The
theory, which blends pan-Arab, Islamic, and socialist values, is enshrined in
Qadhafi’s three volume Green Book. The redistribution of land and wealth, the
allocation of fluctuating oil revenues, and a near total decentralization of political
institutions reshaped Libya’s social landscape in line with Qadhafi’s principles.
These trends also helped Qadhafi and his supporters maintain political control.
Overseas, Qadhafi promoted his political and economic “Third International Theory”
as an alternative to the capitalist and communist systems of the United States and the
Soviet Union for the developing countries of the Third World. Qadhafi’s
confrontation with the United States was both a catalyst for and product of the Libyan
government’s violent and destabilizing activities abroad, Qadhafi’s ideological
fervor, and his regime’s gradual drift into the Soviet sphere of influence.
3 Over time, Qadhafi stopped using his military title and identifying himself with a formal
government position. Although he retains de facto control over Libya’s affairs, he is now
commonly referred to as the “Guide of the Revolution” or “Brother Leader.”

---

CRS-4
Terrorism and Confrontation with the United States. In line with his
ideological precepts, Muammar al Qadhafi long characterized Libyan backing for
anti-colonial, separatist, and Islamist movements and terrorist groups around the
world as legitimate support for parties seeking self determination. The United States
and others categorically and continuously rejected Libya’s policies as unacceptable
sponsorship of illegitimate terrorism and subversive violence. In the 1970s and
1980s, U.S. officials cited the existence of training camps in Libya and other Libyan
government support for a panoply of terrorist groups including the Abu Nidal
organization, the Red Army Faction, the Popular Front for the Liberation of
Palestine-General Command (PFLP-GC), and the Irish Republic Army. Libyan-
sponsored bombings and assassinations also drew sharp international criticism,
especially killings of Libyan dissidents and the bombings of Pan Am Flight 103 and
UTA Flight 772 in the late 1980s. In the 1990s, Libyan-trained individuals led brutal
rebel movements across Africa, including Foday Sankoh’s Revolutionary United
Front in Sierra Leone and Charles Taylor’s National Patriotic Front of Liberia.4
Qadhafi’s Arab-Israeli Intransigence. The Arab-Israeli conflict was
another particularly pointed source of tension between the United States and
Qadhafi: Libya remained distinctly opposed to negotiation or reconciliation with
Israel throughout the Cold War era and the 1990s, promoting armed struggle as the
only viable means to end Israel’s occupation of territory it captured from neighboring
Arab states in 1967. At times, Qadhafi’s positions led to deep bilateral rifts between
Libya and Egypt, particularly under Anwar Sadat, as well as confrontations with
P.L.O. leader Yasir Arafat. Qadhafi and his security services provided support,
training, and safe harbor for Palestinian terrorist groups until the late 1990s. After
a temporary reconciliation with Arafat during the first Palestinian intifada in 1987,
Qadhafi returned to voicing complete opposition to the Oslo peace process and called
for Arab leaders to avoid further recognition of or negotiation with Israel.
In recent years, Qadhafi publicly has maintained his opposition to Arab
engagement with Israel in the face of continued Israeli occupation and settlement
activity. He also has called for a “one state solution” based on reconciliation between
the Israeli and Palestinian people within a single state, which he proposes be called
‘Isratine.’ Al Qadhafi restated his opposition to a two-state solution to the conflict
during a December 2007 visit to Paris.5
4 See Paul Richards, “War as Smoke and Mirrors: Sierra Leone 1991-2,1994-5,1995-6,”
Anthropological Quarterly, Vol. 78, Issue 2, Spring 2005; Douglas Farah, Blood from
Stones, Broadway Books, New York, 2004, pp.23-25; The Economist, “Foday Sankoh,” Vol.
368, August 9, 2003, p. 73; Economist, “Qaddafi Says Farewell, Arabia, and Sets His Sights
on Africa,” Vol. 351, April 24, 1999; I. Abdullah and P. Muana, “The Revolutionary United
Front of Sierra Leone,” in C. Clapham (ed.) African Guerrillas, London: James Currey,
1998, pp. 179-193; Scott Anderson, “The Makeover,” New York Times Magazine, January
19, 2003; and Douglas Farah, “Gaddafi ‘Meddling’ in Africa,” Washington Post, August 16,
2003.
5 Al Qadhafi was quoted as saying “There should be a single democratic (Israeli-Palestinian)
state. Those who call for the creation of two states seek to avoid responsibility in this
cause.... It is not possible to create two states in the region... the Palestinians and the Israelis
are integrated on the ground... it is not feasible to separate them.” OSC Report
(continued...)

---

CRS-5
International Isolation and Signs of Change. Following the imposition
of U.N. sanctions in the aftermath of the Libyan-sponsored airliner bombings of the
late 1980s, Libya entered a period of increasing international isolation. The
compounded effects of a loss of oil revenue, restrictions on the travel of senior
officials, an international air travel ban, and an arms embargo brought significant
pressure on Qadhafi and his government. Signs of change began to emerge in 1999
when Libya agreed to pay compensation for the bombing of UTA Flight 772 and
allowed two intelligence agents to stand trial for the bombing of Pan Am Flight 103.
Qadhafi’s offers of counterterrorism and intelligence cooperation following the
terrorist attacks of September 11, 2001, and his late 2003 decision to dismantle
Libya’s weapons of mass destruction and long range missile development programs
marked further steps toward new relationships with the United States and the
international community. Qadhafi pledged to end his government’s support for
violent political movements around the world in December 2003, and the Libyan
government has recently participated in peacemaking efforts in a number of African
conflicts, including hosting and subsidizing U.N. World Food Program aid flights to
Darfur, Sudan from Libyan territory. New oil production agreements and improved
relations with the United States and a number of European and Asian countries have
demonstrated the tangible benefits of Libya’s apparent new political orientation.
Libya was elected as a non-permanent member of the U.N. Security Council in
October 2007. Libya will hold the seat for 2008 and 2009, and held the Council
presidency in January 2008.
Current Issues in U.S.-Libyan Relations
The relationship between the United States and Libya has been tense for much
of the last thirty-five years but has normalized gradually since late 2003. The Libyan
government’s past support for international terrorism, its history of intervention in
regional conflicts, and its now-abandoned pursuit of weapons of mass destruction
proved to be persistent points of contention with the United States until recently. The
Libyan government has long taken issue with what it regards as unbalanced U.S.
military and financial support for Israel and what it describes as unwarranted U.S.
intervention in the affairs of Arab states. In the past, these differences led to a
number of confrontations and engagements between U.S. and Libyan armed forces,
the imposition of economic and diplomatic sanctions by the United States, and,
reportedly, some limited, covert U.S. efforts at regime change.6 As sanctions have
been removed in recent years, a number of U.S. oil companies have successfully bid
for reentry into Libya’s energy market, and other U.S. businesses have resumed trade
relationships with Libyan firms.
5 (...continued)
FEA20071212451188, December 12, 2007.
6 Joseph T. Stanik, El Dorado Canyon: Reagan’s Undeclared War with Qaddafi, Naval
Institute Press, 2003; Bernard Gwertzman, “Shultz Advocates U.S. Covert Programs to
Depose Qaddafi,” New York Times, April 28, 1986; and Clifford Krauss, “Failed Anti-
Qaddafi Effort Leaves U.S. Picking Up the Pieces,” New York Times, March 12, 1991.

---

CRS-6
The restoration of full diplomatic relations between the United States and Libya
in 2006 has long been expected to open a new chapter in the bilateral relationship and
bring a long period of U.S.-Libyan confrontation to a close. However, until recently,
U.S.-Libyan relations have remained clouded by mutual frustration. Libyan officials
have expressed dissatisfaction with the pace and scope of normalization with the
United States and alleged that Libya has not gotten what was promised when it
decided to abandon weapons of mass destruction and terrorism in 2003.
Considerable U.S. discontent has been apparent among some influential public and
private figures for years. New terrorism concerns delayed Libya’s removal from the
state sponsors of terrorism list until 2006, and Libyan engagement with legal counsel
and U.S. officials on terrorism cases led to charges that Libya was not acting in good
faith to resolve outstanding claims.
Throughout this period, some participants on both sides have supported efforts
to find an agreeable formula for resolving outstanding issues so that the United States
and Libya can reap the potential benefits of a fully normalized relationship. The
Bush Administration continues to view Libya as a model for potential rapprochement
with other state sponsors of terrorism and has sought to establish and expand
counterterrorism, military, and economic cooperation with Libyans through foreign
operations budget requests. Bilateral negotiations announced in May 2008 over the
terms of a comprehensive settlement agreement reportedly have reached an advanced
stage, and Congress declared its support for a proposed U.S.-Libya claims agreement
by authorizing the creation of an independent entity to manage settlement funds and
conditional legal immunity for Libya. Events to date suggests that timing, discretion,
and flexibility have been important components for resolving lingering U.S.-Libyan
differences since 2003. Congress may influence future developments through its
consideration of the Administration’s FY2009 foreign operations budget request for
Libya and the standing nomination of the U.S. Ambassador-designee to Libya (see
below).
Reestablishing Normal Bilateral Relations
The reestablishment of normal bilateral relations between the United States and
Libya has proceeded incrementally in the wake of Libya’s December 2003 decision
to relinquish its weapons of mass destruction and ballistic missile programs.
! On February 11, 2004, the United States opened a two-person
interest section at the Belgian embassy in Tripoli, which was
expanded to a larger Liaison Office in June 2004. The White House
announced several measures on February 26, 2004, including
recisions on bans on using U.S. passports to travel to or through
Libya, and U.S. citizen expenditures in Libya.
! On September 20, 2004, President Bush issued Executive Order
13357 that ended most economic sanctions against Libya, allowed
air flights between the two countries, permitted Libyan purchases of
U.S.-built aircraft, and released approximately $1 billion in Libyan
assets that had been frozen in the United States.

---

CRS-7
! On September 28, 2005, President Bush issued two waivers of Arms
Export Control Act restrictions on the export of defense articles to
Libya. The waivers allowed U.S. companies to “possibly
participate” in Libya’s efforts to destroy its chemical weapons and
precursor stockpiles, along with the refurbishment of eight C-130
transport planes purchased by Libya in the 1970s that have been
withheld for the last thirty years. The President has not indicated
when or if the aircraft will be delivered.7
! On May 15, 2006, the Bush Administration announced its intention
to restore full diplomatic relations with Libya and to rescind Libya’s
listing as a state sponsor of terrorism and a country not fully
cooperating with U.S. counterterrorism efforts. Full diplomatic
relations were restored on May 31, when the United States upgraded
its Liaison Office in Tripoli to Embassy status.
! On June 30, 2006, one day after the 45-day congressional
notification period for the rescission of Libya’s terrorism-related
designations ended, the remaining restrictions on U.S. trade with
Libya were removed, including the ban on the export of U.S. defense
articles. Certain dual-use technology exports remain restricted under
revised U.S. Commerce Department national security guidelines.8
! On September 30, 2006, President Bush signed the Iran Freedom
Support Act (H.R. 6198/P.L. 109-293), which removed Libya from
the terms of the Iran and Libya Sanctions Act (P.L. 107-24).
Prior to the announcement of plans to restore full diplomatic relations with
Libya, some Members of Congress vocally supported further U.S. engagement in
response to Libya’s decision to rid itself of its weapons of mass destruction and long-
range missile development programs.9 Many Members have welcomed the
7 The C-130s remain in storage at Dobbins Air Reserve Base in Georgia. They reportedly
remain militarily useful, bur will require technology upgrades and significant repair. The
Administration reportedly has declined to release the planes, but may plan to allow their sale
and the return of the proceeds, minus repair and storage costs, to Libya. Atlanta
Journal-Constitution, “Bound to the Ground: Libyan C-130s Still Parked 30 Years After
Purchase,” May 2, 2004; and, Renae Merle, “After 30 Years, Libya Can’t Get Its Planes,
Might Get Repair Bill,” Washington Post, August 18, 2006.
8 Inside U.S. Trade, “BIS Removes Libya’s State Sponsor-related Export Controls,” Vol. 24,
No. 36, September 8, 2006.
9 After an August 2005 visit to Libya, Senate Committee on Foreign Relations Chairman
Lugar called Libya “an important partner for [the United States] on the war against
terrorism,” and indicated that he would “work constructively on the assumption that it’s in
our best interest to normalize the relationship, to get an embassy there, to get an
ambassador.” Representative Lantos introduced the “United States-Libya Relations Act of
2005” (H.R. 1453) calling for the dispatch of a charge d’affaires to Libya, the negotiation
of an agreement for the establishment of a full U.S. embassy in Tripoli, and a number of
cooperative security, economic, and cultural initiatives. Sylvia Smith, “Libya Wins Lugar,
(continued...)

---

CRS-8
announced changes, although some Members have been vocal in calling for the
Administration to obtain assurances from the Libyan government that it will
adequately resolve the outstanding claims of some U.S. terrorism victims. Efforts
to further normalize relations remain on hold pending the final result of negotiations
over a “claims settlement agreement” for outstanding legal claims related to U.S.
victims of Libyan-sponsored terrorism attacks (see below).
Congressional Efforts on Behalf of U.S. Terrorism Victims
Congressional concern over the outstanding legal claims of U.S. terrorism
victims has accompanied efforts to restore full diplomatic relations between the
United States and Libya for several years. Congressional concerns relate to a number
of claims, including some related to prominent cases such as the 1986 bombing of
the La Belle nightclub in Berlin, the 1988 bombing of Pan Am Flight 103, and the
1989 bombing of French airline UTA Flight 772 over Niger. In response, some
Members of Congress have taken steps to delay the construction of a new U.S.
Embassy in Tripoli and postpone the confirmation of the Administration’s nominee
for the U.S. ambassadorship to Libya. Congress also has enacted legislation to
prohibit U.S. foreign assistance to Libya for FY2008 and to alter immunity and
damage award provisions relating to Libyan-sponsored acts of terrorism.
Background: Pan Am Flight 103. On December 21, 1988, a bomb
exploded on Pan Am flight 103 en route from London to New York, killing all 244
passengers and 15 crew on board and another 11 people in the town of Lockerbie,
Scotland. On November 14, 1991, the United States and Scotland indicted two
Libyan intelligence agents for their alleged roles in the bombing: Abd al Baset Ali
al Megrahi and Al Amin Khalifah Fhimah. Under a U.N.-negotiated agreement,
Fhimah and Al Megrahi were tried on murder charges under Scottish law in The
Hague beginning in 1999. Fhimah was acquitted and Al Megrahi was convicted: he
is currently serving a life sentence in a Scottish prison.
Al Megrahi is appealing his conviction and the length of his 27-year sentence
before the Scottish Criminal Cases Review Commission (SCCRC). Some observers
in the United Kingdom, including lead Scottish Lockerbie investigator Lord Fraser
of Carmyllie, have questioned Al Megrahi’s conviction and argued that the Lockerbie
investigation should be reexamined.10 Claims have resurfaced that the Popular Front
for the Liberation of Palestine-General Command may have planned the bombing for
Iran in retaliation for the downing of an Iranian airliner by the U.S. Navy in 1988.11
In November 2006, the Scottish commission ruled that Al Megrahi’s appeals could
be heard in Scottish courts, and in June 2007, the SCCRC granted Al Megrahi the
9 (...continued)
Souder’s Praise,” Fort Wayne Journal Gazette, September 25, 2005.
10 Sunday Times (London), “Focus: Was Justice Done?” October 23, 2005; Magnus
Linklater, “It’s Time To Look Again at Lockerbie,” The Times (London), October 26, 2005.
11 Derek Lambie, “Diplomat ‘Evidence’ May Clear Megrahi of Flight 103 Bomb,” Express
on Sunday (UK), September 24, 2006.

---

CRS-9
right to a second appeal of his conviction.12 (For more on the appeal, see Lockerbie
Appeal, below.)
In August 2003, Libya accepted responsibility “for the actions of its officials”
and agreed to a settlement agreement that called for successive payments to the
families of Pan Am 103 victims following the termination of U.N. and U.S.
sanctions.13 As of October 2005, Libya had issued payments of $4 million per victim
following the termination of U.N. sanctions in September 2003 and a second
payment of $4 million to each victim’s family following the termination of bilateral
U.S. sanctions in September 2004. The Libyan government withdrew funds for a
final payment of $2 million from a designated escrow account after several deadline
extensions because of delays in the United States government’s rescission of Libya’s
designation as a state sponsor of terrorism.14
The previously negotiated final round of $2 million payments would be worth
an estimated $500 million. Libyan officials have not indicated publicly whether they
will reinstate the final payment, and representatives of the Qadhafi Development
Foundation, which has been designated as the official Libyan representative for
continuing talks, met with victims’ families representatives in April 2007. The final
payment is now reportedly subject to negotiation between the U.S. and Libyan
governments as part of the discussions announced in May 2008. Recent reporting
suggests that under the terms of a comprehensive settlement agreement, Libya would
transfer the funds for the final Lockerbie payment to an independent entity under the
supervision of the U.S. Secretary of State.15
Background: La Belle and UTA Flight 772. Compensation claims for
U.S. victims of the 1986 bombing of the La Belle nightclub in Berlin and the 1989
Libyan-sponsored bombing of a French passenger aircraft also are pending in U.S.
courts. Two U.S. servicemen, Sgt. Kenneth T. Ford and Sgt. James E. Goins, were
killed in the La Belle bombing, and 80 other U.S. servicemen and women were
injured. Some were permanently disabled.16 On September 19, 1989, a mid-air
12 An executive summary of the SCCRC’s findings in support of further appeal is available
online at:[http://www.sccrc.org.uk/ViewFile.aspx?id=293].
13 Letter from the Great Libyan Arab Jamahiriyah to the President of the Security Council,
reprinted in United Kingdom Foreign & Commonwealth Office Release - “UK Calls for
Lifting of UN Sanctions on Libya,” August 15, 2003.
14 On April 21, 2004, Libya extended its unilaterally set deadline for the recision and
payment to the victims’ families to July 22, 2004. Libya extended the deadline a second
time to September 22, 2004. Lawyers and U.S. negotiators secured a third extension to
April 30, 2005; however, Libya froze the final round of $2 million payments (worth an
estimated $500 million) and reasserted its demand for removal from the U.S. state sponsors
of terrorism list. Associated Press, “Libyan Central Bank Takes Back Last Batch of
Compensation Money Due to Lockerbie Victims,” April 9, 2005.
15 Jay Solomon, “U.S., Libya Reach Deal on Claims --- Tripoli Would Pay $1 Billion for
Victims Of Terrorist Attacks,” Wall Street Journal, August 1, 2008.
16 See Robert Lee Beecham, et al., v. Socialist People’s Libyan Arab Jamahiriya, 01 CIV
(continued...)

---

CRS-10
explosion killed 171 passengers and crew of the French airline UTA flight 772 over
Niger in western Africa, including seven U.S. citizens. On March 10, 1999, a French
court found six Libyans guilty in absentia for bombing the DC-10 aircraft. In January
2008, U.S. District Judge Henry H. Kennedy ruled that Libya was directly
responsible for the bombing of UTA Flight 772 and ordered the Libyan government
and specific Libyan officials to pay $6 billion in damages to the families and estates
of six U.S. victims of the attack.
Legal representatives of the La Belle victims and representatives the Libyan
government met several times in 2006 to discuss settlement terms, and reached an
agreement in which the victims and their families relinquished further claims against
Libyan government in return for a Libyan commitment to make specified settlement
payments. The U.S. parties signaled their acceptance of the agreement by signing
and transmitting to Libyan government representatives legal documents known as
Release of Claims forms. To date, the Libyan government has not made the
payments described under the terms of the agreement, and the U.S. parties have filed
a motion before the U.S. District Court for the District of Columbia to enforce the
settlement agreement.17 In early July 2007, President Bush reportedly identified the
resolution of the La Belle settlement as an issue of importance for further
consolidation of U.S.-Libya relations in a letter to Libyan leader Muammar al
Qadhafi. Libya has made payments to German and French victims for the two
bombings18 and has called for compensation to be paid to Libyan victims of the 1986
retaliatory U.S. air strikes on Libya, which killed civilians, including Qadhafi’s
adopted infant daughter.
Recent reporting on comprehensive settlement agreement negotiations suggests
that the LaBelle and UTA plaintiffs would receive compensation under the proposed
deal, as determined by the State Department. However, the UTA plaintiffs have
expressed dissatisfaction with the arrangements made under S. 3370, stating, “The
courts have decided that Libya carried out the UTA 772 attack, and has awarded us
compensation under the rule of law. This bill will invalidate the court's judgment,
and allow Libya to avoid a court judgment.”19
FY2008 Foreign Operations Request and Assistance Prohibition.
The Administration requested $1.15 million in FY2008 Foreign Operations funding
16 (...continued)
02243, District of Columbia Circuit.
17 At issue is the question of whether the Libyan representatives who participated in the
meetings with the U.S. parties when the terms of the agreement were outlined has “apparent
authority” to represent the Libyan government and commit to binding agreements on its
behalf. See Robert Lee Beecham, et al. V. Socialist People’s Libyan Arab Jamahiriya, et al.,
Civ. A. No. 01-2243 U.S. District Court for the District of Columbia.
18 Libya paid a total of $33 million in compensation to the victim’s families in July 1999.
France re-negotiated the settlement in 2003 and received about $1 million for each victim.
See Robert L. Pugh, et al. v. The Socialist People’s Libyan Arab Jamahiriya, et al., Civ. A.
No. 02-2026, U.S. District Court for the District of Columbia.
19 Adam Graham-Silverman, “Congress Clears Measure Limiting Further Terrorism
Lawsuits Against Libya,” Congressional Quarterly, July 31, 2008.

---

CRS-11
to support the introduction of new programs for Libya.20 Section 654 of the
Consolidated Appropriations Act FY2008 (P.L. 110-161, H.R. 2764, signed
December 26, 2007), prohibits the obligation or expenditure of appropriated funds
“to finance directly any assistance for Libya.” Section 654 shall no longer apply if
the Secretary of State certifies “that the Government of Libya has made the final
settlement payments to the Pan Am 103 victims’ families, paid to the LaBelle Disco
bombing victims the agreed upon settlement amounts, and is engaging in good faith
settlement discussions regarding other relevant terrorism cases.” As required, the
Administration reported to Congress in July 2008 on actions taken by the Department
of State to facilitate a resolution of the outstanding cases and U.S. commercial
activity in Libya’s energy sector.21
New Embassy Construction Delayed. In conjunction with the restoration
of full diplomatic relations, the United States has upgraded its Liaison Office in
Tripoli to an Embassy, which has moved to an interim location. Libyan
demonstrators attacked and burned the former U.S. Embassy in December 1979.
Plans to procure property for a new U.S. embassy have been placed on hold, after
delays in securing funding and approval complicated negotiations during 2007.22 The
Administration had requested $109.9 million in FY2008 Embassy Security,
Construction, and Maintenance (ESCM) funds for property procurement and
construction of a new U.S. Embassy in Tripoli. The Senate report on the
Consolidated Appropriations Act, 2008 (S.Rept. 110-128, H.R. 2764/P.L. 110-161)
did not include the requested ESCM funds. Section 697 of the Senate version of H.R.
2764 would have prohibited the use of appropriated funds for “construction of a new
United States embassy in Libya; activities in Libya related to energy development;
or activities in Libya which support investment in Libya’s hydrocarbon sector,
including the processing of applications for dual-use export licenses.” The State
Department’s FY2009 budget request indicates that FY2009 ESCM funds may
support the acquisition of property for a future new embassy compound in Tripoli.
Ambassador Nomination Held. In July 2007, President Bush nominated
Gene A. Cretz as U.S. Ambassador to Libya-designate. Mr. Cretz is a career Foreign
Service Officer, most recently having served as the Deputy Chief of Mission at the
U.S. Embassy in Tel Aviv, Israel. To date, his confirmation hearing has been delayed
in response to congressional concerns about the progress of negotiations regarding
20 For a full description of the Administration’s FY2008 Foreign Operations request for
Libya, see U.S. Department of State, Congressional Budget Justification for Foreign
Operations, Fiscal Year 2008, pp. 503-505. Available at [http://www.state.gov/documents/
organization/80701.pdf].
21 Report pursuant to Section 654(c) of the Department of State, Foreign Operations, and
Related Programs Appropriations Act, 2008 (Division J, P.L. 110-161), July 16, 2008.
22 CRS Analyst consultation with State Department personnel, May 2008. Plans for the new
embassy compound included an office building, support annex, and quarters for a Marine
Security Detachment.

---

CRS-12
the settlement of outstanding terrorism claims by Libya. If confirmed, the nominee
will be the first U.S. Ambassador to serve in Tripoli since 1972.23
Section 1083 of P.L. 110-181. Legislation enacted in January 2008 altered
the legal environment in which some outstanding terrorism cases are being
considered, and further complicated U.S.-Libyan relations. Section 1083 of P.L. 110-
181, the FY2008 National Defense Authorization Act (NDAA, H.R. 4986, signed
January 28, 2008) amends the Foreign Sovereign Immunities Act (FSIA) (28
U.S.C.§§ 1602-1611) in order to provide a federal cause of action to sue foreign
governments designated as state sponsors of terrorism for damages (including
punitive damages) arising from terrorist acts committed or supported by that state.24
The provision includes measures designed to facilitate the enforcement of judgments
by allowing a claimant to subject foreign government assets to liens of lis pendens
as soon as a suit is filed and by permitting the attachment of indirectly held property
to satisfy a final judgment. It also permits the refiling of certain dismissed cases,
nullifying certain legal defenses that might have been available to defend against
them, and permits the filing of new cases related to previously filed cases that would
otherwise be time-barred.
President Bush vetoed the original version of the bill (H.R. 1585) on December
27, 2007, based on concern that potential court proceedings related to Section 1083
of H.R. 1585 could tie up billions of dollars in Iraqi government funds in the United
States, thus undermining efforts to rebuild Iraq and train Iraqi security forces.
Conditional waiver authority for Iraq was included in H.R. 4986 and subsequently
exercised.25 However, no specific provisions were included to limit the applicability
of the provisions to Libya.
As such, the provisions could prove applicable to Libya because Libya was
previously designated as a state sponsor of terrorism and remains subject to lawsuits
by victims of terrorist acts that were committed or alleged to have been committed
by agents of Libya. Nearly $1.7 billion has been awarded against Libya, with an
additional $5.3 billion awarded against certain named Libyan officials,26 with some
twenty additional cases pending. As long as there are pending claims or outstanding
judgments against Libya under the terrorism exception to the FSIA, U.S. companies
23 Various chargés d’affaires represented the United States in Libya until December 1979,
when a Libyan mob attacked and burned the U.S. Embassy in Tripoli. All remaining U.S.
diplomats in Libya were recalled in May 1980.
24 See CRS Report RL31258 - Suits Against Terrorist States by Victims of Terrorism, by
Jennifer Elsea.
25 The waiver authority provided in Section 1083 of P.L. 110-181 requires the President to
determine that a waiver for Iraq is in the national security interest of the United States and
will "promote the reconstruction of, the consolidation of democracy in, and the relations of
the United States with, Iraq." The President also must determine that Iraq continues to be
a reliable ally in combating international terrorism. President Bush waived the application
of Section 1083 of P.L. 110-181 to Iraq on January 28, 2008, by issuing Presidential
Determination No. 2008-9.
26 For legal analysis, see CRS Report RL31258, Suits Against Terrorist States by Victims of
Terrorism, by Jennifer K. Elsea.

---

CRS-13
doing business with Libya may be subject to litigation by judgment creditors who
believe the U.S. company is in possession of Libyan property that is subject to
execution on a terrorism judgment.27 In recent months, legal representatives of U.S.
terrorism victims reportedly have filed liens of lis pendens on Libyan assets related
to current contracts with legal and lobbying firms such as Blank & Rome, the
Livingston Group, and White & Case.28
Some members of the U.S. business community share the Administration’s
views on the benefits of continued trade with Libya and have been vocal critics of
Section 1083. On February 28, 2008, the U.S.-Libya Business Association, the
National Foreign Trade Council, the National Association of Manufacturers, and the
United States Chamber of Commerce wrote to U.S. Secretary of State Condoleezza
Rice urging the Administration to pursue waiver authority for Section 1083 for
countries that have been removed from the list of state sponsors of terrorism.29 In
their letter, the groups argued that in the case of Libya, P.L. 110-181 “unjustly puts
the entire burden of terrorism claims reparations on a few U.S. companies that have
made substantial investments in Libya by inhibiting their ability to pursue current and
future projects.” They also contend that “U.S. companies will be severely
disadvantaged if they cannot pay or be paid without the risk of litigation” when doing
business with former state sponsors of terrorism, including Libya.
A January 2008 U.S.-Libya Business Association white paper highlighted as
harmful the potential for property attachments to be placed on U.S. and Libyan
payments and the sale of U.S. goods and services to Libya. In particular, the
Association and other have described potential property attachments as being harmful
to U.S. parties with existing contracts and discouraging to parties considering future
export possibilities.30 Other groups have voiced similar concerns. In response to a
CRS inquiry, David Hamod, President and CEO of the National U.S.-Arab Chamber
of Commerce stated that he believed that since late 2007 the legislation “has had a
chilling effect” on U.S. and Libyan firms considering new business relationships.31
Both groups warn of the potential for Libya to pursue business opportunities with
27 The new legislation addresses the rights of third parties who have an interest in property
that may be subject to levy in execution on a judgment. The conference report for H.R.
1585 (H.Rept. 110-477) applies to P.L. 110-181 and states the conferees intention with
regard to the application of Section 1083 was to “encourage the courts to protect the
property interests of such innocent third parties by using their inherent authority, on a
case-by-case basis, under the applicable procedures governing execution on judgment and
attachment in anticipation of judgment.”
28 Kevin Bogardus, “Libya contracts targeted to fund terror victims’ compensation,” The
Hill, June 4, 2008.
29 Correspondence from the U.S.-Libya Business Association, the National Foreign Trade
Council, the National Association of Manufacturers, and the United States Chamber of
Commerce to U.S. Secretary of State Condoleezza Rice, February 28, 2008.
30 U.S.-Libya Business Association, Current and Potential Trade and Investment
Opportunities in Libya, January 11, 2008.
31 CRS Analyst conversation with David Hamod, April 16, 2008.

---

CRS-14
other countries if transactions with U.S. partners remain subject to potential
litigation.
In March 2008, the Administration proposed amending Section 1083 to include
a new waiver provision to permit an exception with respect to all states whose
designation as sponsors of terrorism have been rescinded if the President determines
that the waiver is in the national security interest of the United States.32 However,
S. 3370 provides for the potential rescission of the applicability of Section 1083 to
Libya once the Secretary of State certifies that Libya has transmitted sufficient funds
to an independent entity for the settlement of outstanding U.S. legal claims.
Analysis and Potential Impact.
From 2007 through mid-2008, an
atmosphere of brinksmanship characterized U.S.-Libyan engagement, particularly
with regard to outstanding terrorism claims. Some terror victims’ families,
associated legal counsel, and some Members of Congress sought to leverage
remaining symbols of diplomatic normalization and new U.S.-Libya economic ties
to pressure Libya to resolve pending cases. The Libyan government responded with
increasingly direct statements warning that if its relations with the U.S. government
and U.S. business community remain complicated by outstanding terrorism claims,
U.S. companies may miss opportunities to bid on lucrative Libyan government
contracts to refurbish and expand the country’s infrastructure. The Administration
and the U.S. business community supported normalization with Libya while
continuing to engage Libya on outstanding terrorism claims.
The enactment of Section 1083 and the awarding of significant monetary
damages to the families and estates of U.S. victims of the 1989 bombing of UTA
Flight 772 heightened the intensity of U.S.-Libyan engagement from January 2008
onward.33 Libyan Ambassador to the United States Ali Aujali characterized the
enactment of Section 1083 as “a great setback” for U.S.-Libyan relations and argued
that Libya was “not getting what we deserve.”34 Foreign Minister Abd al Rahman
Shalgam’s described the UTA judgment as “blackmail and terrorism in the name of
the law.”35 Economic actors in the United States stated their belief that U.S.
companies stand to lose opportunities to foreign competitors as Libya proceeds with
awarding infrastructure development and other state contracts. U.S. companies
received contract awards during the latest round of Libya’s natural gas licensing
32 Text of the Administration proposal was included in the correspondence from
U.S.-Secretary of State Condoleezza Rice, U.S. Secretary of Defense Robert Gates, U.S.
Secretary of Energy Samuel Bodman, and U.S. Secretary of Commerce Carlos Gutierrez to
Speaker of the House Nancy Pelosi, Senate Majority Leaders Harry Reid, et al., March 18,
2008.
33 In January 2008, U.S. District Judge Henry H. Kennedy ruled that Libya was directly
responsible for the bombing of UTA Flight 772 and ordered the Libyan government and
specific Libyan officials to pay $6 billion in damages to the families and estates of six U.S.
victims of the attack.
34 “U.S. Libya Rapprochement Tested by $6 Billion Judgment,” Diplomatic Courier, April
15, 2008.
35 “Libyan Foreign Minster on Relations with EU, US, Gaza, Western Sahara, AMU,” U.S.
Open Source Center Report FEA20080201519587, January 24, 2008.

---

CRS-15
process in December 2007, although, to date, no announcements of U.S. involvement
in major infrastructure contracts have been made.
Rhetoric and warnings aside, the full political implications of the new
legislation remained unclear until the enactment of S. 3370 and the Administration’s
announcement that negotiations over a comprehensive settlement agreement had
reached an advanced stage. By some accounts, the enactment of Section 1083
appears to have signaled to the Libyan authorities the urgency of the need to resolve
outstanding claims. The Administration continuously has cited a desire “to show the
Libyans that they made the right decision,”36 and the Libyan government apparently
has embraced the goal of using official negotiations to reach a claims settlement
agreement. With the enactment of S. 3370, the conclusion of final terms for a
comprehensive settlement agreement could pave the way for key steps in the
normalization of U.S.-Libyan diplomatic relations, including an end to standing
prohibitions on U.S. assistance to Libya, the confirmation of the U.S.-ambassador
designate, and a potential visit to Tripoli by Secretary of State Condoleezza Rice.
FY2009 Foreign Operations Request
The Administration has requested $350,000 in International Military Education
and Training (IMET) funding for Libya to “educate and train Libyan security forces
as well as create vital linkages with Libyan officers after a 35-year break in
contact.”37 Proposed training would include English language education and “seek
to identify candidates for specific courses” on civil-military relations, border security,
and counter-terrorism. Participation in the IMET program would make the Libyan
government eligible to purchase additional U.S. military training at a reduced cost.38
The Administration’s FY2009 request indicates that “the Government of Libya
would pay for additional training and education with national funds.” The
Administration also is requesting $750,000 in Non-proliferation, Anti-terrorism, De-
mining, and Related programs (NADR) funding to support Libyan border security
improvement and continue U.S. support for the destruction of Libya’s chemical
weapons stockpiles.
36 U.S. Deputy Assistant Secretary of State Jeffrey Feltman quoted in Jay Solomon, “U.S.
Vies to Seal Libya Settlement, Preserve Detente,” April 2, 2008.
37 U.S. Department of State, Congressional Budget Justification for Foreign Operations
F Y 2 0 0 9 , N e a r E a s t R e g i o n a l O v e r v i e w . A v a i l a b l e a t
[http://www.state.gov/documents/organization/101442.pdf].
38 Section 21(c) of P.L. 90-629, the Arms Export Control Act (AECA), states that IMET
recipient countries are eligible to purchase non-IMET training at reduced cost. Section
108(a) of P.L. 99-83 amended the AECA to provide this reduced cost benefit to IMET
recipients. The U.S. Defense Security Cooperation Agency (DSCA) implements the
authority provided in P.L. 99-83 to apply a lower cost to U.S. military training purchased
by IMET recipient countries through the Foreign Military Sales (FMS) program. At present,
the “incremental rates” applied to the FMS training purchases of IMET recipient countries
are calculated according to the terms outlined in Department of Defense Financial
Management Regulation (FMR), Volume 15, Chapter 7 (Sections 0711 and 0712).

---

CRS-16
Section 747 of S. 3288, the Senate version of the FY2009 Foreign Operations
appropriations bill prohibits the obligation or expenditure of appropriated funds “to
finance directly any assistance for the Government of Libya.” Section 737 would no
longer apply if the Secretary of State certifies that “the Government of Libya has
made the final settlement payments to the Pan Am 103 victims' families, paid to the
LaBelle Disco bombing victims the agreed upon settlement amounts, and is engaging
in good faith settlement discussions regarding other relevant terrorism cases.” The
Senate bill also would provide $2.5 million for democracy programs for Libya.
Post-9/11 Counterterrorism Cooperation
Muammar al Qadhafi immediately condemned the September 11, 2001 terrorist
attacks as “horrific and gruesome” and his government has taken steps to improve
U.S.-Libyan counterterrorism cooperation and intelligence sharing since 2001. The
Libyan government has long perceived Al Qaeda as a threat because members of
Libya’s Islamist opposition have been linked to Al Qaeda and other foreign jihadist
organizations (see below). This has contributed to Libya’s willingness to expand
counterterrorism cooperation with U.S. authorities. Qadhafi has characterized
members of Al Qaeda as “heretics” in prominent public statements and has described
his government’s intelligence and counterterrorism cooperation with the United
States as “irrevocable.”
According to the U.S. Department of State’s most recent Country Report on
Terrorism for Libya, the Libyan government “has continued to cooperate closely with
the United States and the international community on counterterrorism efforts”
through April 2008. This included efforts to support U.S. counterterrorism initiatives
against the Libyan Islamic Fighting Group (LIFG) and Al Qaeda in the Islamic
Maghreb (AQIM, formerly known as the Salafist Group for Call and Combat, or
GSPC).39 U.S. officials reportedly hope to extend counterterrorism assistance to
Libya in the future, possibly under the framework of the interagency Trans-Sahara
Counter Terrorism Initiative (TSCTI), which involves all of Libya’s neighbors,
except Sudan and Egypt.40
Libya has taken direct action to limit the activities of known Al Qaeda
associates within its borders, including elements of its own Islamist opposition allied
with Al Qaeda. In October 2004, Libya transferred the then-deputy commander of
the GSPC Amari Saifi, also known as Abderrazak al Para, to Algeria, where he was
wanted on terrorism charges. Saifi had been in the custody of the rebel Chadian
Movement for Democracy and Justice, with whom Qadhafi reportedly maintains a
close relationship. Qadhafi has urged other Arab governments to extend full
counterterrorism cooperation to the United States. Libya is a party to all 12
international conventions and protocols relating to terrorism, including the
International Convention on the Suppression of the Financing of Terrorism.
39 U.S. Department of State, Office of the Coordinator for Counterterrorism, Country
Reports on Terrorism - Libya, April 30, 2007.
40 Ann Tyson, “U.S. Pushes Anti-Terrorism in Africa,” Washington Post, July 26, 2005.

---

CRS-17
Libyan Foreign Fighters in Iraq. A 2007 U.S. Military Academy
Combating Terrorism Center (CTC) report concluded that an “apparent surge in
Libyan recruits” to serve as foreign fighters in Iraq since late 2006 may have resulted
from an “increasingly cooperative relationship” between the LIFG and Al Qaeda.
Documents found by U.S. forces in Iraq suggest that 137 of 700 foreign fighters
brought into Iraq by a single Al Qaeda-affiliated smuggling operation between
August 2006 and September 2007 were Libyan nationals.41 The CTC report
highlighted the relatively large percentage of Libyans reflected in the seized records
(over 18 percent), noting that “no previous study has indicated that more than 4
percent of [foreign] fighters [in Iraq] were Libyan.”
The records suggest that many of the Libyan nationals traveled from the
country’s northeastern coastal region, especially from the cities of Darnah and
Benghazi, to Iraq via Egypt and Syria. Both cities are known as strong bases of
Islamist and opposition sentiment and reportedly have been the site of clashes
between government security forces and armed opponents in the past.42 Although
some Libyan officials have been outspoken in their criticism of U.S. policy toward
Iraq, available reporting does not suggest that the Libyan government is in any way
involved in encouraging or facilitating the travel of Libyan nationals to Iraq to serve
as combatants.
Lockerbie Appeal. Proceedings for the second appeal for Abd al Baset Ali
al Megrahi opened in October 2007, and preliminary hearings continue to be held in
an effort to determine the scope of his appeal. Defense attorneys are seeking access
to classified information regarding key pieces of evidence, reportedly including
classified intelligence documents related to the supply of timers by a Swiss company
to the Libyan intelligence service. The documents reportedly originated with a third
country’s government, and that government has refused to grant permission for the
documents to be made available to the court by British authorities.43 In May 2008, the
British government filed a Public Interest Immunity (PII) order with the Scottish
court seeking to keep the documents secret, but the court ruled that the government
was required to “produce for the court the documents in question... subject to
appropriate security measures.”44 In June 2008, the prosecution reportedly argued to
41 Richard A. Oppel Jr., “Foreign Fighters in Iraq Are Tied to Allies of U.S.,” New York
Times, November 22, 2007. According to the United States Military Academy Combating
Terrorism Center, the seized records “contained varying amounts of detail on the fighters’
personal background, group affiliation, travel to Syria, and intended role in Iraq. Some
records had considerably more detail than others.” United States Military Academy
Combating Terrorism Center, Al Qa’ida’s Foreign Fighters in Iraq: A First Look at the
Sinjar Records, December 19, 2007.
42 See for example, Michael Sheridan, “Libya’s Secret War Pits Islam Against Gaddafi,” The
Independent (UK), October 14, 1995; and, Marie Colvin, “Islamic Revolt Jolts Gadaffi -
Dictator Sends out Helicopter Gunships to Crush ‘Holy War,’” Sunday Times (UK), March
31, 1996.
43 John Robertson, “Angiolini Rapped over Lockerbie File,” The Scotsman (UK), December
21, 2007.
44 Ian MacKenzie, “Scottish judges call for secret Lockerbie papers,” Reuters, May 29,
(continued...)

---

CRS-18
restrict the appeal to the original terms under which the appeal was granted, while the
defense reportedly argued that new evidence should be considered.
In July 2007, Muammar al Qadhafi’s son Sayf al Islam al Qadhafi stated that
Libya “had nothing to do with Lockerbie” and said that Al Megrahi’s release was
“top of [Libya’s] priority.”45 During a December 2007 visit to France, Muammar al
Qadhafi stated that,
“There are people who have been accused or found guilty in these cases [the
bombings of Pan Am 103 and UTA 772]. This does not concern the Libyan
state, it concerns individuals.... The state cannot assume responsibility for what
individuals do, and this is true of Libya. Libya has never committed any terrorist
acts.”46
The Return of U.S. Oil Companies
Following the lifting of U.S. sanctions in 2004, Occidental Petroleum and the
so-called Oasis group, which consists of Amerada Hess, Marathon, and
ConocoPhillips, have engaged in negotiations with Libyan officials regarding the full
resumption of their production activities. The issuance of Executive Order 12543 in
January 1986 forced the companies to abandon their Libyan operations. During the
sanctions era, the companies’ holdings were managed by a subsidiary of the Libyan
National Oil Company (NOC) and all revenue from the sale of oil produced from the
concession areas accrued to the Libyan government. The NOC made some attempts
to open the areas held in trust for the U.S. companies to foreign investment.
A two-step process required the review of the existing production agreements
with the NOC and the ratification of new agreements by Libya’s political leadership.
Officials from the NOC and the Libyan government approved the terms of Occidental
Petroleum’s reentry as of July 1, 2005, paving the way for Occidental to resume
operations in its old concession areas. The members of the Oasis group reached an
agreement with Libyan officials over the terms of their proposed re-entry in
December 2005. Under the terms of the agreement, the Oasis group’s Waha
concessions in Libya’s Sirte basin will be extended for 25 years, and the NOC will
hold a 59% interest in the venture. The group members agreed to make a one-time
$1.3 billion dollar reentry payment and to contribute $530 million toward the cost of
investments made by the Libyan NOC since 1986. Libyan officials had expressed
their opinion that the reentry of the U.S. oil firms would support their government’s
efforts to secure Libya’s removal from the U.S. state sponsors of terrorism list.
Occidental renewed expiring contracts in 2007 under new terms that lowered its
production share in line with new Libyan standards.
44 (...continued)
2008.
45 Reuters, “‘A Happy Ending’: Gaddafi Son Hails Nurses Accord,” July 30, 2007.
46 OSC Report FEA20071212451188, December 12, 2007.

---

CRS-19
Political and Economic Profile
Muammar al Qadhafi: A Profile
Muammar al Qadhafi was born in 1942 near the central coastal city of Sirte. His
Arabized Berber family belongs to the relatively small Qadhafa tribe, and his
upbringing was modest. As a young man Qadhafi identified strongly with Arab
nationalist and socialist ideologies espoused by leaders such as Egypt’s Gamel Abdel
Nasser. Although he was excluded from the elite Cyrenaica Defense Forces on a
tribal basis during the Libyan monarchy period (see Appendix A), Qadhafi was
commissioned as a regular army captain following stints at the Libyan military
academy in Benghazi and the United Kingdom’s Royal Military Academy at
Sandhurst. Following his return to Libya, he led the September 1, 1969 overthrow
of the Libyan monarchy with a group of fellow officers. He was 27 years old.
Qadhafi has proven to be a controversial, complex, and contradictory political
survivor during his long reign in Libya, in spite of numerous internal and external
challenges to his rule. He has exercised nearly complete, if, at times, indirect
political control over Libya over the last thirty-plus years by carefully balancing and
manipulating complex patronage networks, traditional tribal structures, and byzantine
layers of national, regional, and local governance. Libya’s foreign and domestic
policies nominally have been based on his personal ideology. In the past, Qadhafi
and his supporters have imposed his theories with realistic purpose and precision, not
hesitating to crush coup attempts, assassinate dissidents abroad, or sponsor violent
movements and terrorist attacks against Libya’s perceived external enemies.
Personally, Qadhafi often is described as mercurial, charismatic, shrewd, and
reclusive. He is married and has eight children: seven sons and one daughter. An
April 1986 U.S. air strike in retaliation for a Libyan-sponsored anti-American
bombing in Berlin hit one of his homes in Tripoli, killing his adopted infant daughter
and hospitalizing members of his immediate family. The incident continues to be a
source of personal anger and resentment for Qadhafi: he has preserved the bombed
out ruins of the home in the military compound where it stood, and he remarked on
the death of President Ronald Reagan in 2004 that the former U.S. president had died
before he could be prosecuted for the “ugly crime that he committed in 1986 against
the Libyan children.”47
Political Dynamics
Libya’s often contradictory political dynamics are a product of competing
interest groups seeking to influence policy within the confines of the country’s
authoritarian political system and amid Libya’s emergence from international
isolation. Elements of Muammar al Qadhafi’s ideology permeate political discourse
on many security and foreign policy issues, while in other cases, such as economic
reform, new frameworks are being embraced to meet society’s current and changing
47 Khaled El-Deeb, “Gadhafi: Regrets Reagan Died Before Being Tried for 1986 Air Strikes
on Libya,” Associated Press, June 6, 2004.

---

CRS-20
needs. The legacies of colonial occupation and Libya’s struggle for independence
continue to influence Libyan politics; rhetorical references to preserving sovereignty
and resistance to foreign domination are common in political statements. Most
Libyans also accept a prominent role for Islamic tradition in public life: Islam is the
official religion and the Quran is the basis for the country’s law and its “social code.”
Tribal relationships remain important, particularly with regard to the distribution
of leadership roles in government ministries and in political-military relations. Tribal
loyalties remain strong within and between branches of the armed services, and
members of Qadhafi’s tribe, the Qadhafa, hold many high ranking government
positions, reportedly including key positions in the air force. Members of larger,
rival tribes, such as the Warfalla, have opposed the regime on grounds of tribal
discrimination. Some Libyan military and security officials staged limited,
unsuccessful coup attempts against Qadhafi in 1993 and 1996 based in part on tribal
and familial rivalries. The Qadhafi government has performed periodic
reassignments and purges of the officer corps to limit the likelihood of organized
opposition reemerging from within the military. However, these political
considerations have affected the military’s preparedness and war fighting capability.
Political parties and all opposition groups are banned in Libya under Law
number 71 of 1972. Formal political pluralism is frowned upon by many members
of the ruling elite, even as an increasing number of regime figures advocate for
greater popular participation in existing government institutions. Opposition groups,
most notably the Muslim Brotherhood, appear to have shifted their political strategies
toward gradual attempts to influence national policy making in contrast to others’
confrontational efforts to change the makeup of the regime. Prominent figures in
Libyan politics include Muammar al Qadhafi’s son Sayf al Islam al Qadhafi,48
General People’s Committee Secretary Al Baghdadi Ali al Mahmudi, National Oil
Company chief Shukri Ghanem, Foreign Minister Abd al Rahman Shalgam, and
prominent members of the security establishment, including intelligence chief Musa
Kusa and army leader and original RCC member Abu Bakr Younis Jaber.
Government Structure
Libya has a unique political system composed of nominally decentralized and
participatory levels of government. Muammar al Qadhafi and his closest supporters
exercise final authority over domestic and foreign policies by means of their control
of the implementation mechanisms of the national government — the sizeable
military and security apparatus and a handful of powerful ministries. Qadhafi’s
ideological emphasis on “the authority of the people” is the stated basis for the
operation of Libya’s multiple levels of government. Although participation in these
institutions is mostly open and political leaders routinely encourage citizens to take
part in their deliberations, most external observers regard Libya’s political system as
largely authoritarian and undemocratic. The U.S. State Department’s annual human
48 For a detailed profile of Sayf al Islam al Qadhafi and a discussion of questions about the
possibility of his succeeding his father, see Yehudit Ronen, “Libya’s Rising Star: Said Al-
Islam and Succession,” Middle East Policy, Vol. XII, No. 3, Fall 2005, pp. 136-44.

---

CRS-21
rights reports document ongoing restrictions on political life and human rights in
Libya.
The “Authority of the People”. A hierarchy of “people’s congresses” make
up Libya’s government and serve as venues for the exercise of “popular authority”
as defined by Muammar al Qadhafi’s ideology. At the local level, citizens meet in
Basic People’s Congresses to appoint representatives to regional and ultimately the
national General People’s Congress. Participation in the basic congresses is open to
all Libyan citizens, although participation rates are notoriously low and Qadhafi
regularly makes public statements expressing his disappointment with participation
levels and urging broader popular involvement in public affairs. At the March 1,
2000, session of the General Peoples’ Congress, Qadhafi abolished the positions of
12 General People’s Committee (cabinet-equivalent) secretaries and reassigned their
duties to provincial committees. Secretariats of foreign affairs, justice, public
security, and finance remained under the authority of the centralized General
People’s Committee. Some experts have argued that the decentralization was
designed to deflect popular criticism from the central government and further dilute
political opposition within the country.
In March 2006, the Libyan government announced the replacement of Secretary
(prime minister-equivalent) of the General People’s Committee Shukri Ghanem by
former Health Minister Al Baghdadi Ali al Mahmudi. A cabinet reshuffle and the
creation of seven new ministries also were announced. The replacement of the
reform-oriented Ghanem has been interpreted by some observers as an effort by
conservative and hard-line elements of the Libyan political establishment to reassert
control over the speed and direction of Libya’s reform efforts. Ghanem now serves
as the director of the National Oil Company, where he is involved with ongoing
international bidding for oil exploration and production-sharing agreements.
In March 2008, Qadhafi announced his intention to dissolve most government
administrative bodies and institute a plan whereby state oil revenues would be
distributed to citizens on a monthly basis for them to administer personally, in
cooperation, and via local committees.49 Citing popular criticism of government
performance in a long, wide-ranging speech, Qadhafi repeatedly stated that the
traditional state would soon be “dead” in Libya and that direct rule by citizens would
be accomplished through the distribution of oil revenues. Defense, foreign affairs,
security, and oil production arrangements reportedly will remain national government
responsibilities, while other bodies are to be phased out beginning in January 2009.
It remains unclear whether and how the proposals will be fully implemented.
Opposition Groups
The government has dealt harshly with opposition leaders and groups over the
last three decades, establishing special “people’s courts” and “revolutionary
committees” to enforce ideological and political discipline and to punish violators
49 BBC Monitoring Middle East, “Libyan leader says cabinet must be dismantled,” March
2, 2008; and, “Libyan Leader Addresses Libyan People’s Congress; Dissolves Cabinet,”
OSC Report GMP20080305864001, March 3, 2008.

---

CRS-22
and dissidents. Abroad, Libyan intelligence personnel have monitored, harassed,
and, in some cases, assassinated expatriate dissidents, some of whom were referred
to as “stray dogs.” Libya’s myriad opposition movements can be categorized broadly
as Islamist, royalist, or democratic in orientation. However, their activities and
effectiveness have been largely limited by disorganization, rivalry, and ideological
differences. New efforts to coordinate opposition activities have begun in response
to Libya’s reintegration to the international community and the emergence of a
broader political reform debate in the Arab world. However, most observers do not
regard any of Libya’s current opposition groups as a serious threat or alternative to
the current government.
Exiles. In the past, government officials and intelligence operatives have
monitored and taken violent action against expatriate opposition groups and leaders,
including in Europe and the United States. Clandestine opposition groups also have
carried out assassinations and attacks against Libyan government officials abroad.
Opposition groups in exile include the National Alliance, the Libyan National
Movement (LNM), the Libyan Movement for Change and Reform, the Islamist Rally,
the National Libyan Salvation Front (NLSF), and the Republican Rally for
Democracy and Justice. A royalist contingent based on the claim to the throne by
Mohammed al Sanusi, the grandson of the former king, is based in London. These
groups and others held an opposition conference in July 2005 in London and issued
a “national accord,” calling for the removal of Qadhafi from power and the
establishment of a transitional government.50 A follow-up meeting was held in
March 2008.51
In a September 2005 interview, Foreign Minister Abd al Rahman Shalgam
characterized some of the regime’s expatriate opponents as individuals who fled the
country after committing economic crimes or collaborating with foreign intelligence
services. He then invited any expatriate dissidents who had not committed crimes
to return to Libya.52 In August 2005, the government announced the return of 787
exiles who agreed to reconcile with the Qadhafi regime.53 Regional observers
characterized the return of prominent dissidents in August 2006 as evidence of an
ongoing, unofficial reconciliation program between the Libyan regime and its
expatriate opponents.54
The Muslim Brotherhood. Like other political organizations and opposition
groups, the Muslim Brotherhood is banned in Libya under law number 71 of 1972.
50 May Youssef, “Anti-Gaddafists Rally in London,” Al Ahram Weekly (Cairo), No. 749,
June 30 - July 6, 2005; Al Jazeera (Doha), “Opposition Plans to Oust Al Qadhafi,” June 25,
2005; Middle East Mirror, “Libya’s Fractured Opposition,” July 29, 2005.
51 “Libyan Opposition Groups Meet in London To Reiterate Commitment To Save Libya,”
OSC Report GMP20080329825012, March 29, 2008.
52 “Libya’s Shalgam on Ties With US, S. Arabia, Opposition,” OSC Document
GMP20050924512001, September 24, 2005.
53 UPI, “Libya Says Hundreds Return From Exile,” August 20, 2005.
54 Khalid Mahmoud, “Libya: Surprise Return of More Opponents Following Secret
Contacts,” Al Sharq Al Awsat (London), August 19, 2006.

---

CRS-23
Since the late 1940s, when members of the Egyptian Muslim Brotherhood first
entered Libya following a crackdown on their activities, the Libyan Muslim
Brotherhood has existed as a semi-official organization. Hundreds of Brotherhood
members and activists were jailed in 1973, although the Brotherhood eventually
reemerged and operated as a clandestine organization for much of the following two
decades. In 1998, a second round of mass arrests took place, and 152 Brotherhood
leaders and members were arrested. Several reportedly died in custody, and,
following trials in 2001 and 2002, two prominent Brotherhood leaders were
sentenced to death and over 70 were sentenced to life in prison. The government
announced a retrial for the imprisoned Brotherhood activists in October 2005, and
in March 2006, the group’s 84 remaining imprisoned members were released.55 The
controller general of the Libyan Muslim Brotherhood, Suleiman Abdel Qadir,
describes the Brotherhood’s objectives as peaceful and policy-focused, and has called
for the cancellation of laws restricting political rights.56 Sayf al Islam al Qadhafi has
reached out to the Libyan Muslim Brotherhood by publicly characterizing the
organization as nonviolent and non-seditious. Abdel Qader responded to political
reform statements by Sayf al Islam al Qadhafi in 2007 with calls for more inclusive,
consultative decision making.57
Libyan Islamic Fighting Group (LIFG). The Libyan Islamic Fighting
Group (LIFG) is a violent Islamist movement opposed to the Qadhafi government
and allied with Al Qaeda and other international jihadist groups. According to the
Department of State, the LIFG has attempted to assassinate Qadhafi, most recently
in 1996, and may have participated in the planning of the May 2003 suicide
bombings in Casablanca, Morocco.58 In November 2007, Al Qaeda figures Ayman
al Zawahiri and Abu Layth al Libi announced the merger of the LIFG with Al Qaeda,
which many terrorism analysts viewed as having political rather than operational
relevance.59 Al Libi was killed in an air-strike in Pakistan in February 2008.
The United States froze the LIFG’s U.S. assets under Executive Order 13224
in September 2001, and formally designated the LIFG as a Foreign Terrorist
Organization in December 2004. In February 2006, the U.S. Department of the
Treasury designated five individuals and four entities in the United Kingdom as
Specially Designated Global Terrorists for their role in supporting the LIFG.60 Some
observers have characterized the designations as a gesture of solidarity with Libya
and have argued that the ability and willingness of the LIFG to mount terror attacks
55 Afaf El-Geblawi, “Libya Frees All Jailed Muslim Brotherhood Members,” Agence France
Presse, March 3, 2006.
56 “Al Jazirah TV Interviews Libyan Muslim Brotherhood Leader on Current Situation,”
OSC Document GMP20050803550006, August 3, 2005.
57 “Libyan MB Concerned Over Sayf al-Islam’s Statements Regarding New Constitution,”
OSC Document - GMP20070830282001, August 30, 2007.
58 U.S. Department of State, “Libya,” Country Reports on Terrorism 2004, April 2005.
59 “Al-Zawahiri, Al-Libi: Libyan Islamic Fighting Group Joins Al-Qa’ida,” OSC Document -
FEA20071104393586, November 3, 2007.
60 U.S. Department of the Treasury, “Treasury Designates UK-Based Individuals, Entities
Financing Al Qaida-Affiliated LIFG,” JS-4016, February 8, 2006.

---

CRS-24
in Libya may be limited. Others claim that LIFG fighters have allied themselves with
other violent Islamist groups operating in the trans-Sahara region, and cite evidence
of Libyan fighters joining the Iraqi insurgency as an indication of ongoing Islamist
militancy in Libya and a harbinger of a possible increase in violence associated with
fighters returning from Iraq.61 Reports suggest that eastern Libya may be a
stronghold for LIFG members and other extremist groups that could pose a threat to
Libya’s security.
In mid-2005, Sayf al Islam al Qadhafi referred to plans to release some jailed
members of the LIFG and other violent Islamist groups from prison, following their
renunciation of violence and pledge to participate in society peacefully.62 Press
reports suggested that Libyan officials released up to 60 members of the LIFG in
January 2007 as part of ongoing negotiations for the group’s disarmament.63 Press
reports in June and July 2008 stated that Sayf al Islam Al Qadhafi has continued to
pursue dialogue with imprisoned members of the LIFG leadership and may be close
to brokering an agreement with them that could lead to the LIFG renouncing violence
against the Libyan state.64
Political Reform and Human Rights
The U.S. Department of State has characterized Libya’s human rights record as
“poor.”65 A January 2008 Human Rights Watch report argues that in spite of “some
improvements” in Libyan human rights policies in recent years,”serious rights abuses
persist.”66 Annual reports on political and human rights conditions from the U.S.
State Department and international groups such as Amnesty International and Human
Rights Watch have catalogued a broad range of recurring abuses including arbitrary
arrest, incommunicado detention, torture, a general ban on political opposition, and
official limitations on public speech, assembly, and press activity.67
61 Alison Pargeter, “Militant Groups Pose Security Challenge for Libyan Regime,” Janes
Intelligence Review, Vol. 17, No. 8, August 2005, pp. 16-19.
62 “Libyan Leader’s Son on Call to Reopen Human Rights Files,” OSC Document
GMP20050820537003, August 20, 2005.
63 Camille al Tawil, “Libya: 60 ‘Fighting’ Group members released: Negotiations continue
with its jailed leaders,”Al Hayat (London), BBC Monitoring, January 3, 2007.
64 “Report on ‘Seething Anger’ in Libya Over Dismantling Al Qa’ida-Linked Cells,” OSC
Report GMP20080630825001 June 30, 2008; and, “Libya: Jailed Islamic Group Leaders
‘Preparing’ To Renounce Armed Violence,” OSC Report GMP20080706837002, July 6,
2008.
65 U.S. Department of State, Bureau of Democracy, Human Rights, and Labor, Country
Reports on Human Rights Practices, Libya - 2006, March 6, 2007.
66 Human Rights Watch, “Backgrounder - Libya: Rights at Risk,” January 3, 2008.
Available at [http://hrw.org/english/docs/2008/01/03/libya17674.htm].
67 The latest reports on human rights conditions in Libya are available in the U.S.
Department of State’s Country Report on Human Rights Practices in Libya (March 6, 2007)
and from Amnesty International [http://web.amnesty.org/library/eng-lby/index], and Human
Rights Watch [http://www.hrw.org/doc?t=mideast&c=libya].

---

CRS-25
Since 2003, Libyan political figures, including Muammar al Qadhafi and his son
Sayf al Islam al Qadhafi, have made a series of public statements and policy
announcements in an effort to repair Libya’s reputation with regard to human rights
practices. Some tangible steps have been taken, and Libyan authorities report that
legal reforms are under way that may improve the protections and rights afforded to
citizens. Judicial entities associated with human rights abuses and political control
in the past, such as “revolutionary courts” and “people’s courts,” reportedly have
been dismantled. As a result, some observers have expressed cautious optimism that
political, social, and religious freedom may be improving in Libya. Others continue
to warn that such reforms may be merely cosmetic and meant to support the
government’s efforts to improve its domestic legitimacy and international standing.
In March 2008, the U.S. State Department report on human rights in Libya stated
that “the government’s human rights record remained poor” and that “security
personnel routinely tortured prisoners during interrogations or as punishment.”
Legal and Institutional Reform. Libyan law prohibits the activities of all
political opposition groups and restricts the free exercise of speech and the press.68
Since Qadhafi’s 1969 coup, little legal recourse has been available to citizens accused
of political crimes. Nevertheless, officials have announced plans to embark upon a
full review of the country’s Penal Code and Code of Criminal Procedure to eliminate
restrictive laws regarding political activity. Sayf al Islam al Qadhafi also has called
for a constitution to clarify the power of different legislative, executive, and judicial
institutions in Libya and has endorsed ongoing legal reforms as a means to “provide
a free environment that is suitable for a normal political life.”69 He renewed these
calls in an August 2007 speech and indicated that a constitutional drafting process
may begin soon. The speech called for the guarantee of “independent institutions,”
including the central bank, the supreme court, the media, and civil society. He also
outlined four “red lines” to guide reform efforts: Islamic law, the territorial integrity
of Libya, security and stability, and “Muammar al Qadhafi.”70
In support of the reform efforts, some institutional changes have been instituted
to improve political and human rights conditions. In March 2004, the General
People’s Committee Secretariat of Justice and Public Security was split into two
separate secretariats in an effort to establish greater judicial independence. In
January 2005, the General People’s Congress approved a law abolishing judicial
institutions known as “people’s courts” and “revolutionary courts” that tried
suspected regime opponents, sometimes in secret. International human rights
organizations welcomed the abolition of the people’s court system as an “important
68 According to the U.S. State Department, Libyan law provides for freedom of speech
“within the limits of public interest and principles of the Revolution.” In practice, criticism
of the government and Qadhafi are restricted and often punished. By law, print and
broadcast media in Libya are owned and operated by government authorities. Satellite and
Internet access are limited and partially censored.
69 “Libyan Leader’s Son on Call to Reopen Human Rights Files,” OSC Document -
GMP20050820537003, August 20, 2005.
70 “Libyan Leader’s Son Outlines his Version of Democracy,” OSC Document -
GMP20070823950058, August 20, 2007.

---

CRS-26
step” and urged Libyan authorities to grant new trials to prisoners convicted by the
courts, including several who were convicted in late 2004.
Human Rights Monitoring. The Libyan government has not permitted the
establishment of independent human rights organizations but invited international
human rights groups Amnesty International and Human Rights Watch to Libya for
the first time in 15 years. In late 2004 and early 2005, representatives from both
organizations toured various security facilities and prisons and met with selected
imprisoned dissidents. A January 2006 Human Rights Watch report based on
research conducted during the visit concluded that “Libyan leader Muammar al
Qadhafi and his inner circle appear unwilling to implement genuine reform,
especially in the areas of free expression and association,” although the Libyan
government has taken “some positive steps” to improve human rights conditions
since 2003.71
Since 2004, Sayf al Islam al Qadhafi has publicly supported a pro-human rights
agenda and has created an official human rights monitoring body under the auspices
of the Qadhafi Development Foundation. The foundation’s Human Rights Society
now operates a national hotline for Libyans to report cases of unlawful detention,
seizure of property or assets, and death or injury at the hands of security personnel.72
Reports also suggest that the government intends to review all reported cases of
human rights abuses and property crimes and to compensate victims as part of a
national reconciliation program.
Fathi al Jahmi. Human Rights Watch reported in May 2006 that Fathi al
Jahmi, Libya’s most internationally recognized political prisoner, may be facing a
death penalty sentence on charges of belonging to, supporting, or calling “for the
establishment of any grouping, organization or association proscribed by law.”73 Al
Jahmi was imprisoned in 2002 after publicly calling for elections and press reforms
and for criticizing Muammar al Qadhafi and the government. President Bush praised
Al Jahmi’s subsequent release in March 2004 under a suspended sentence, but Al
Jahmi was soon rearrested after he repeated his calls for reform and expanded his
criticism of Qadhafi in interviews with regional satellite channels, including
U.S.-funded Al Hurra. Al Jahmi has been detained since late March 2004 and may
be in ill health. In an on-the-record briefing on May 15, 2006, Assistant Secretary
of State Welch called the Al Jahmi case “troubling” and indicated that U.S. officials
continue to raise the issue with their Libyan interlocutors.74 In November 2006, a
71 Human Rights Watch, “Libya: Words to Deeds The Urgent Need for Human Rights
Reform,” Volume 18, No. 1(E), January 2006.
72 Brian Whitaker, “Libya: Getafe’s Son Sets Up Human Rights Hotline,” The Guardian
(London), September 17, 2005.
73 Human Rights Watch, “Libya: Political Prisoner May Face Death Penalty,” May 4, 2006.
74 Issues Related to United States Relations With Libya On-the-Record Briefing
Washington, DC, May 15, 2006.

---

CRS-27
State Department spokesman said, “We continue to urge the Libyan government to
release [Al Jahmi] and will continue to do so.”75
During a December 2007 visit to Paris, Muammar al Qadhafi stated that “there
is not a single political prisoner in Libya.”76 Assistant Secretary of State for Near
Eastern Affairs David Welch reportedly raised the “specific case” of Fathi al Jahmi
with Libyan Foreign Minister Abd al Rahman Shalgam, during the foreign minister’s
January 2008 visit to Washington, D.C.77 Following Foreign Minister Shalgam’s
return to Tripoli in January 2008, an unnamed ministry source issued a denial that
human rights had been on the U.S.-Libyan agenda and stated that U.S. Secretary of
State Condoleezza Rice “does not have the right to discuss this issue and she knows
that well because Libya is not the kind of country that allows intervention in its
internal affairs.”78 On March 31, 2008, the U.S. Department of State issued a
statement urging “the Libyan government to fulfill their promise to release without
condition” prominent political activist Fathi el Jahmi.79 Dr. Scott Allen, an adviser
to Physicians for Human Rights who examined Al Jahmi in March 2008 stated that
“Even though [Al Jahmi’s] health improved in the last few months, he remains very
ill. He’s stable and can be treated as an outpatient.”80 As of early July 2008, El Jahmi
remained detained and was reported to be in poor health.
Libyan Foreign Policy
Libyan foreign policy since the 1990s has been defined by a shift from
engagement with other Arab states to a greater focus on Africa. The prominent role
played by Libyan leader Muammar al Qadhafi ensures that foreign relations remain
personality driven, somewhat unpredictable, and characterized by close relationships
with non-state actors and opposition movements in a number of neighboring states.
In recent years, Qadhafi publicly has maintained his opposition to Arab engagement
with Israel in the face of continued Israeli military occupation and settlement activity
in the West Bank. He also has called for a “one state solution” based on
reconciliation between the Israeli and Palestinian people within a single state, which
he proposes be called ‘Isratine.’ Qadhafi has criticized the Arab League’s Arab
Peace Initiative, arguing that it does not represent the views of all Arabs and would
be detrimental to the interests of Palestinians.
75 US Fed News, “U.S. Renews Call for Release of Libyan Dissident,” November 16, 2006.
76 U.S. Open Source Center (OSC) Report FEA20071212451188, December 12, 2007.
77 David Gollust, “Libyan Foreign Minister Visits U.S. State Department,” Voice of
America, January 3, 2008.
78 OSC Report GMP20080105950012, January 4, 2008.
79 U.S. Department of State Deputy Spokesman Tom Casey, Press Statement: Washington,
DC, March 31, 2008
80 Physicians for Human Rights, “Press Release: Libya: Free Hospitalized Political Prisoner
Fathi al-Jahmi,” March 29, 2008, available at
[http://physiciansforhumanrights.org/library/news-2008-03-29.html].

---

CRS-28
Qadhafi’s diplomatic engagement in Africa remains active, particularly his
efforts to mediate between governments and rebel factions in neighboring Sudan,
Niger, and Chad and his proposals for the establishment of an United States of
Africa, which many African leaders consider quixotic and regard with suspicion.
Libyan defense officials have informed their U.S. Defense Department counterparts
that the Libyan government opposes the establishment of the new U.S. Africa
Command (AFRICOM) because it could introduce a significant non-African military
presence on the continent. Libyan officials reportedly support AFRICOM’s proposed
security capacity building mission, if only in general terms.81 The Arab Maghreb
Union, of which Libya is a member, rejected the presence of foreign military forces
on its members’ territory at a recent summit in Rabat, a move seen as underscoring
Libya’s opposition to stationing of U.S. forces in North Africa under the new
command.82 AFRICOM’s Deputy for Military Operations, Rear Admiral Robert
Moeller, recently stated that, “the U.S.-AFRICOM does not need to station large
operational units across the African continent,” and that “small numbers of forces
will come to the continent to do a particular activity and then... depart.”83
Energy and the Libyan Economy
Until the discovery of oil in 1959, Libya’s economic viability was seriously
questioned by many outside observers. Foreign aid and subsidies largely supported
the national budget, until the introduction of massive amounts of oil revenue
transformed the country’s economy and social fabric. Following the September 1,
1969 military coup, Qadhafi and his government restructured Libya’s economy along
socialist lines, placing a heavy emphasis on national management of industry and
resource allocation. However, the economy remained highly dependent on oil
revenue and thus highly vulnerable to fluctuations in global oil prices.84 The
government has announced its intention to reverse state ownership trends associated
with the country’s long experiment with socialism. Economic diversification and
resource management remain challenges for the government and private sector as
they seek to revive the economy and capitalize on interest from foreign investors.
Oil revenue has been the lifeblood of the Libyan economy and government since
exports began in 1961, accounting for 95% of Libya’s annual foreign currency
81 Testimony of Theresa M. Whelan, Deputy Assistant Secretary of Defense for Africa
before the Africa and Global Health Subcommittee of the House Foreign Affairs Committee,
August 2, 2007.
82 Libyan Foreign Minister Abd al Rahman Shalgam stated, “The Arab Maghreb Union
(AMU) will not allow the presence of any foreign soldier on its soil, because people in this
region object to that, the authorities are not thinking of such presence and even others are
aware of the fact that this region will not accept the presence of any kind of foreign troops
on its territory.” “Libyan Foreign Minister on Maghreb Union, US Military Command in
Africa,” OSC Document GMP20071201950028, November 30, 2007.
83 Voice of America, “U.S. Military Delegation in Nigeria for AFRICOM Talks,” November
29, 2007.
84 See Dirk Vandewalle, Libya Since Independence, Cornell Univ. Press, Ithaca, 1998.

---

CRS-29
earnings and 75% of annual government revenue in recent years.85 Since 2001, rising
oil prices have led to a tripling in Libyan oil revenue, moving from an estimated
$11.7 billion in 2001 to an estimated $38.5 billion in 2007.86 The increase has
spurred corresponding growth in the economy. Libyan leader Muammar al Qadhafi
has stated that Libyans are “very happy” with higher price levels in the global oil
market, although he has underlined the importance of creating alternative sources of
revenue and economic growth in public statements.87
Economic Reform and Infrastructure Development. Pressure for
economic reform in Libya traditionally has coincided with periods of weaker oil
export revenue, although the emergence of a younger, technocratic leadership group
in recent years has sustained reform efforts during the current period of increasing oil
returns. The centerpiece of Libya’s current economic reform efforts has been a
national economic strategy development project involving Libyan government
planning authorities, the Qadhafi Development Foundation, the U.S.-based Monitor
Group, and the London-based Cambridge Energy Associates. To date, the project has
produced an assessment report known as “the White Book,” which continues to be
evaluated for implementation by a steering committee led by Prime Minister Al
Baghdadi Ali al Mahmudi. World Bank and International Monetary Fund initiatives
have also assessed Libya’s economic status and made recommendations for reform.
Other economic reform and infrastructure development initiatives include an
ongoing privatization program and has announced plans for billions of dollars worth
of railway hospitals, airport, school, and road construction projects. Plans also have
been announced for the creation of a free trade zone on the Mediterranean coast east
of Tripoli and a $6.5 billion social and economic development investment fund
designed to create greater income and economic equality among the Libyan
population. In designing and implementing reform efforts, Libyan officials must
balance concerns about unemployment and social equity with longer term concerns
for diversification. Some observers believe that high oil revenues will lessen
pressure for structural reform, in spite of the opportunity that surplus revenues may
create.
Oil Reserves and Production Capacity. Libya’s proven oil reserves are
estimated at 41.5 billion barrels (ninth largest in the world). Libyan officials estimate
that over 60% of the country has yet to be surveyed for oil and gas deposits, which
could hold an additional 76 billion barrels of oil.88 The Libyan National Oil
Company (NOC) manages oil production activity and negotiates exploration and
production agreements with foreign companies. Oil exploration and production are
85 U.S. Energy Information Admin. (EIA), Libya Country Analysis Brief, February 2005.
86 Economist Intelligence Unit estimates as of November 2007.
87 “Libyan Leader Says ‘Problems Abroad’ Solved,” OSC Document
GMP20050919710040, September 19, 2005; Reuters, “Libya Very Happy With High Oil
Prices - Gaddafi,” July 4, 2005.
88 U.S. Energy Information Administration (EIA), Libya Country Analysis Brief, July 2007;
Tarek Hassan-Beck, Libyan National Oil Company in International Oil Daily, “Libya
Targets ‘Huge Backlog’ of Field Work in Post-Sanctions Push,” September 30, 2005.

---

CRS-30
carried out on the basis of a 1955 oil law, and Libyan authorities reportedly are
drafting a new law to govern production activities and reform the foreign investment
approval process. Foreign investment is regulated through exploration and
production agreements negotiated by foreign companies and the NOC. In September
2006, Libya established a Council for Oil and Gas Affairs to regulate oil and gas
exploration and production and to approve decisions about the development of the
oil and gas sector.89 Most of Libya’s oil is exported to Italy, Germany, France, and
Spain. However, following the resumption of crude oil exports to the United States
in June 2004, oil shipments to U.S. refiners have increased, from 56,000 barrels per
day in 2005 to an average of 116,000 barrels per day in 2007.90
Until recently, Libyan oil production had steadily declined from its peak of 3.3
million barrels per day (b/d) in 1970 due to the deterioration of production equipment
and infrastructure related to strict investment controls and international sanctions.
Libya produced an average of 1.84 million barrels per day (b/d) in 2007, which
officials have stated is currently the sector’s maximum capacity. Since the
termination of U.N. and U.S. sanctions in 2003 and 2004, Libya has sought foreign
investment to rehabilitate and expand its oil production capacity and expected $11
billion in oil production related investment from 2005 to 2015. Current government
production targets are 3 million b/d by 2012.91 Libya has signed Development and
Production Sharing Agreement (DPSA) contracts with several foreign companies
interested in rehabilitating existing production facilities and areas.
New Exploration and Production-Sharing Agreements. In addition to
negotiating the return of U.S. oil companies to their former production areas, Libyan
officials are presiding over a bidding process for new exploration and production-
sharing agreements. Known as “EPSA IV,” the fourth round of foreign agreement
bidding since the process began in 1979 is opening large areas of onshore and
offshore Libyan territory to new oil and gas exploration and production. In January
2005, Libyan officials announced the results for the first fifteen EPSA-IV exploration
blocks, which cover an area of 51,000 square miles. Of the 63 international firms
that were approved by Libyan authorities and submitted bids, U.S. firms won
exploration licenses for 11 of the 15 blocks, whether as sole producers or as members
of consortia. Occidental Petroleum, which has secured a return to its former
concessions, led the U.S. companies with nine successful bids, and Amerada Hess
and Chevron Texaco also secured new licenses.
Winners of the second batch of EPSA IV bids were announced on October 2,
2005. European and Asian firms received most of the licenses, and Exxon-Mobil
89 The prime minister serves as the chairman of the Council. Other members include outside
experts, the head of the NOC, the ministers of economy, trade, employment, finance, and
the central bank governor. Sayf al Islam al Qadhafi reportedly attended Council meetings
held in September 2006 to discuss the ongoing third round of new exploration and
production sharing agreement bidding. Vahe Petrossian, “Libya Sees Panel on the Fast
Track,” Upstream, September 15 2006; and, Reuters, “Libya Oil Licensing Round Attracts
Many Offers - NOC,” September 26, 2006.
90 EIA, U.S. Imports by Country of Origin, July 2008.
91 “Libya: Rare Beast,” Energy Compass, May 16, 2008.

---

CRS-31
was the sole U.S. license recipient. A third bidding round was held for 12 offshore
and 29 onshore blocks, and a fourth round for 41 blocks concluded in December
2007. Some oil and gas market analysts have speculated that the approval of the
majority of production licenses for U.S. companies in the first EPSA-IV round may
have been intended as an economic reward to the United States for agreeing to lift its
bilateral sanctions against Libya. Others have argued that U.S. firms were successful
because of their willingness to agree to production share terms that heavily favored
the Libyan government and agreed to pay large signing bonuses. European and Asian
oil companies have expressed strong interest in participating in new Libyan ventures
and are expected to continue to submit competitive bids. Libya has renegotiated
production sharing agreements with Italian company Eni, Petro-Canada, Occidental
Petroleum, and Austrian company OMV, to secure a larger production share for
Libya in exchange for lower taxes and long term commitments for the companies.
Natural Gas. Libya’s proven natural gas reserves are estimated to be 52
trillion cubic feet, although, like the country’s oil reserves, Libya’s gas holdings may
be significantly higher given the generally under-explored status of Libyan territory.
As with oil production, the development of natural gas production and export
capacity has been limited by restrictive investment policies and international
sanctions. Nevertheless, Libya has been able to use natural gas for some domestic
power generation and for limited exports to some European countries. Shell has
reached an agreement with Libyan authorities to explore for natural gas deposits and
to upgrade Libya’s aging liquefied natural gas plant at Marsa al Brega.92 Libyan
authorities also are reportedly pursuing pipeline agreements with neighboring North
African states to improve export access to European markets. In May 2007
representatives from British Petroleum (BP) announced the signing of an extensive
natural gas exploration and LNG export agreement with Libya. In July 2008,
representatives from Russia’s Gazprom visited Libya and expressed interest in
purchasing Libya’s natural gas exports and cooperating with Libya on new natural
gas export pipelines to Europe. According to Gazprom, Libya and Gazprom decided
“to initiate the thematic negotiations on the purchase of the currently available
hydrocarbon volumes from the Libyan party.”93
Military Profile and WMD Disarmament
The Libyan Military
Structure, Training, and Equipment. Libya’s mostly conscripted military
forces are small relative to the large amount of weaponry at their disposal (see Table
1 below). Most outside military analysts regard the training and leadership of Libyan
forces as poor and identify a lack of combined arms and joint service planning as
factors that limit their overall effectiveness. The Qadhafi government historically has
92 WWP Report on Oil, Gas & Petrochemicals, “Libya: Multi-billion Dollar Joint Venture
Agreement to Modernize Liquefied Natural Gas (LNG) Plant,” June 1, 2005.
93 Polya Lesova, “Gazprom seeks to buy all of Libya’s oil, gas exports,” MarketWatch, July
10, 2008.

---

CRS-32
made the acquisition of weapons and equipment a higher priority than training or
creating high-quality military support infrastructure.
Libya’s army, navy, and air forces are equipped with a broad range of aging
Soviet and Eastern Bloc equipment, although the country’s poorly maintained
inventories also include some U.S. and western European arms, including French
Mirage fighters and U.S. C-130 transports.94 Libya’s exorbitant military spending in
the late 1970s and early 1980s yielded an unmanageable crop of diverse weapon
systems from various sources and manufacturers. Purchases declined significantly
during the 1990s because of international sanctions, which limited the revenue
available for defense spending. Libya’s current military leadership presides over a
largely stored and surplus catalogue of weaponry with poor maintenance records.95
The military also lacks sufficient numbers of trained personnel to operate the military
equipment currently in its possession.
Table 1. Libyan Military Personnel
Service
Personnel
Army
45,000
Air Force
23,000
Navy
8,000
Revolutionary Guard Corps
3,000
Reserve Militia
40,000
Total
119,000
Sources: International Institute for Strategic Studies, The Military Balance
2007; Anthony H. Cordesman, The Military Balance in the Middle East,
Center for Strategic and International Studies, 2004; and Jaffee Center for
Strategic Studies, “Libya,” Middle East Military Balance, March 4, 2006.
Arms Sales. The subject of renewed arms sales to Libya remains a sensitive
subject in the United States and some European countries whose citizens were killed
in Libyan sponsored terrorist attacks during the 1980s. The European Union lifted
its arms embargo against Libya in October 2004. The U.S. ban on export of defense
articles lapsed at the end of a 45-day congressional notification period, on June 30,
2006. Qadhafi reportedly has expressed interest in procuring U.S., European, and
Russian weapon systems. France, Spain, Ukraine, and Russia are among the
countries reportedly interested in refurbishing and replacing Libya’s weapon stocks.96
94 Facts on File World News Digest, “U.S. Bars Libya Planes, Training,” September 20,
1975; and Washington Post, “Libya’s Qaddafi Praises Carter, Urges Closer Ties,” June 13,
1977. In 2004, Libya sold 40 of its aging Mirage fighters to Pakistan.
95 Senior Middle East security analyst Anthony Cordesman has described Libya as “the
world’s largest military parking lot.” For a more detailed profile of the Libyan military, see
Anthony H. Cordesman, The Military Balance in the Middle East, Center for Strategic and
International Studies, March 15, 2004, pp. 79-85.
96 AFP, “French Defence Minister Holds Talks in Libya,” February 5, 2005; Andrew
(continued...)

---

CRS-33
The United Kingdom’s Defense Export Services Organization (DESO) reportedly has
labeled Libya a “priority” market in documents promoting exports by U.K. arms
manufacturers, and press reports have detailed frequent meetings between DESO
representatives and Libyan authorities since 2004.97
In August 2007, the European aerospace and defense group EADS signed a
contract to provide Milan anti-tank missiles to Libya in the wake of a visit by French
President Nicolas Sarkozy to negotiate the release of imprisoned Bulgarian medics.
The contract is being investigated and both sides have denied any quid pro quo
arrangement. A potentially larger sale reportedly remains under negotiation: press
reports suggest that Libyan and French officials continue to negotiate the terms of a
multi-billion dollar arms sale that could send new fighter jets, helicopters, patrol
boats, armored vehicles, and air defense upgrades to Libya. France also may agree
to upgrade several 1970s era F1 fighters in Libyan possession.98 In conjunction with
a state visit by then-Russian President Vladimir Putin in April 2008, a number of
potential arms sales were discussed by the Russian press, including fighter aircraft,
helicopters, submarines, and sophisticated air defense missiles.99
WMD Programs and Disarmament100
Nuclear, Chemical, and Ballistic Missile Programs. Despite Libya’s
membership in the Nuclear Non-Proliferation Treaty (NPT), Libyan leader Muammar
al Qadhafi made several efforts to acquire nuclear weapons related technology
assistance, beginning in the early 1970s. The most renowned was his reported
unsuccessful request for a working nuclear weapon from China in the 1970s. Other
unsuccessful attempts to acquire nuclear energy technology useful to the
development of nuclear weapons were subsequently made through contacts with the
Soviet Union, the United States, France, India, Pakistan, Japan, and Argentina.101
96 (...continued)
Borowiec, “Paris Strengthens Military Ties with Libya,” Washington Times, February 17,
2005; and Flight International, “France Eyes Libyan Deal,” August 1, 2006.
97 Antony Barnett, “MoD targets Libya and Iraq as ‘Priority’ Arms Sales Targets,” Observer
(London), September 24, 2006; and, Independent (London), “MoD targets arms deals with
Libya,” March 9, 2007.
98 “Under the negotiated deal, France would supply Libya with 14 Rafale aircraft as part of
a larger arms package valued at between $5.7 billion and $6.4 billion. Forecast
International Defense Intelligence Newsletters, “Deadline for Libyan-French Arms Package
Negotiations Likely to be Extended,” June 12, 2008.
99 Tor-M1 air defense missiles were reported as part of the potential package along with
MiG-29SMT fighter interceptors and Su-30MK multi-mission fighter aircraft. ITAR-TASS
World Service (Russia), “Russia-Libya military cooperation increasing,” April 17, 2008.
100 For a detailed discussion of Libya’s WMD programs and disarmament see CRS Report
RS21823, Disarming Libya: Weapons of Mass Destruction, by Sharon A. Squassoni.
101 John K. Cooley, “Qaddafi’s Great Aim for Libya is a Nuclear Capability of its Own,
Christian Science Monitor, November 12, 1980; New York Times, “Nuclear Energy Aide
And Foreign Adviser Appointed in Tripoli,” January 8, 1981; Joshua Sinai, “Libya’s Pursuit
(continued...)

---

CRS-34
Nonetheless, most experts agree that Libya never had a dedicated indigenous nuclear
weapons program. Over the next 25 years, Qadhafi made several public statements
in which he argued that Arab states were compelled to develop their own nuclear
weapons capability in response to Israel’s development of nuclear weapons.102 Libya
established a small nuclear research reactor at Tajura in 1979 with Soviet assistance,
and entered into several rounds of negotiations with Soviet and French authorities for
the construction of large nuclear power facilities that were never concluded.
According to several press accounts, Libyan officials reached an agreement with
Pakistani nuclear scientist Dr. Abdul Qadeer Khan in 1997 for Khan and his illicit
proliferation network to provide the Libyan government with a nuclear weapons
design and the uranium enrichment technology it desired. These accounts and
International Atomic Energy Agency reports describe how, over the next six years,
a complex network of companies and individuals in Malaysia, Switzerland, Pakistan,
Spain, Turkey, South Africa, Germany, the United Kingdom, and the United Arab
Emirates supplied Libya with uranium enrichment components.103
Libya’s chemical weapons programs were more advanced and independent than
its nuclear weapons development activities. In 1986 and 1987, U.S. officials
suspected Libya of using Iranian-supplied chemical weapons against military forces
in neighboring Chad and provided the Chadian military with protective equipment
to guard against further Libyan attacks.104 During the late 1980s and early 1990s, the
Libyan government developed chemical weapons production facilities at Rabta,
Sebha, and Tarhuna with technology acquired from a number of western European
101 (...continued)
of Weapons of Mass Destruction,” Nonproliferation Review, Spring/Summer 1997, pp. 92-
100; and Associated Press, “Japan Company Sold Atomic Plant to Libya,” March 12, 2004.
102 In 1987, for example, Al Qadhafi said that, “Now that the Israelis possess the atomic
weapon, the Arabs have nothing before them except to work day and night to possess the
atomic weapon in order to defend their existence.” Reuters, “Gaddafi Urges Arabs to
Develop Nuclear Weapons,” September 2, 1987. See also San Francisco Chronicle
“Khadafy Wants Arab A-Bombs,” June 23, 1987; and Agence France-Presse, “Libya Urges
Arabs to Get Nuclear Arms,” January 27, 1996. Qadhafi made similar remarks in a March
2002 interview: “We demanded the dismantling of the weapons of mass destruction that the
Israelis have ... Otherwise, the Arabs will have the right to possess that weapon.” John
Bolton, Remarks to the Heritage Foundation, Washington, DC, May 6, 2002.
103 The IAEA does not directly identify Dr. Khan or Pakistan as a source for nuclear
weapons designs or enrichment equipment disclosed by Libya. Leslie Lopez, “Libyans Got
Nuclear Training at Malaysian Company, Police Say,” Wall Street Journal, June 4, 2004;
Stephen Fidler and Mark Huband, “Turks and South Africans ‘Helped Libya’s Secret
Nuclear Arms Project’,” Financial Times, June 10, 2004; Craig Whitlock and Shannon
Smiley, “Germany Arrests Man in Libyan Atomic Case,” Washington Post, October 12,
2004; Douglas Frantz and William C. Rempel, “New Find in a Nuclear Network,” Los
Angeles Times, November 28, 2004.
104 Elaine Sciolino, “U.S. Sends 2,000 Gas Masks to the Chadians,” New York Times,
September 25, 1987.

---

CRS-35
and Asian firms.105 The plants produced large amounts of chemical weapons and
components, including 23 tons of mustard gas. Libya’s ballistic missile program
relied on foreign technical assistance to produce Scud-B and a limited number of
Scud-C missiles but was limited by a lack of indigenous technical skill and
ineffective management.106
Termination of WMD and Missile Programs. In 1999, Libyan officials
approached the Clinton Administration and offered to dismantle Libya’s chemical
weapons programs in exchange for a loosening of U.S. terrorism sanctions. The offer
was rejected in an effort to maintain pressure on Libya to comply with U.S. and
United Nations demands in the Lockerbie airliner bombing case. Following the
Lockerbie settlement, Sayf al Islam al Qadhafi and intelligence chief Musa Kusa re-
engaged with U.S. and British intelligence authorities beginning in March 2003
regarding Libya’s weapons of mass destruction programs. The October 2003 naval
interception of the freighter BBC China, which was carrying centrifuge components
to Libya, accelerated negotiations and led to assessment visits by U.S. and British
personnel later that month and in early December 2003.
On December 19, 2003, Foreign Minister Abd al Rahman Shalgam read a
statement on Libyan national television announcing the government’s decision to
dismantle its weapons of mass destruction and long range missile programs and to
invite international inspectors to Libya to remove materials and perform verifications.
Qadhafi publicly endorsed the statement, paving the way for the removal of WMD-
related equipment from Libya in January and March 2004.107 Subsequent reviews of
seized material and interviews with Libyan officials indicated that Libya remained
far from developing a nuclear weapons capability, although A.Q. Khan sold Libya
a crude nuclear weapons design and some components necessary to begin a uranium
enrichment program. However, as of late 2003, Libya had not obtained key pieces
of equipment, such as a sufficient number of high precision rotors to power its
enrichment centrifuges.108
105 Joshua Sinai, “Libya’s Pursuit of Weapons of Mass Destruction,” Nonproliferation
Review, Spring/Summer 1997, pp. 92-100; Anthony H. Cordesman, Weapons of Mass
Destruction in the Middle East, Center for Strategic and International Studies, 1999;
Stockholm International Peace Research Institute (SIPRI) et al., “Educational Module on
Chemical and Biological Weapons Non-Proliferation: Case Study: Libya,” 1998-2001.
106 Andrew Koch, “Libya’s Missile Programme Secrets Revealed,” Jane’s Defence Weekly,
August 18, 2004.
107 Statement of Assistant Secretary of State for Verification and Compliance Paula A.
DeSutter Before the House Committee on International Relations Subcommittee on
International Terrorism, Nonproliferation, and Human Rights, September 22, 2004; and,
Douglas Franz and Josh Meyer, “The Deal to Disarm Kadafi,” Los Angeles Times, March
13, 2005.
108 William J. Broad, “Libya’s Crude Bomb Design Eases Western Experts’ Fear,” New York
Times, February 9, 2004; David Crawford, “Libya Was Far From Building Nuclear Bomb,”
Wall Street Journal, February 23, 2004; and William J. Broad, “Arms Control Group Says
U.S. Inflated Libya’s Nuclear Bid,” New York Times, March 25, 2004.

---

CRS-36
Motives for Disarmament. Officials and independent observers have
attributed Libya’s decision to end its pursuit of weapons of mass destruction to a
number of factors. Administration officials have argued that U.S. military action in
Iraq in 2003 demonstrated to Libya the resolve of the Bush Administration to
eliminate perceived threats to U.S. security posed by states associated with terrorism
and in pursuit of weapons of mass destruction. In contrast, Libyan officials have
denied that external pressure or threats influenced their government’s decision
making processes and have characterized the decision as a sovereign initiative to
restore Libya’s ties with the international community and improve its security and
economy. Most independent observers have argued that Libya’s decision was a
calculated move designed to extricate the country from the international sanctions
regime that was limiting its economic activity and contributing to the deterioration
of its vital oil and natural gas infrastructure. Libyan officials have pointed to the
financial and economic rewards associated with its international re-engagement,
although, prior to and following the restoration of full diplomatic relations with the
United States, Qadhafi has stated his belief that Libya should be more directly and
substantively rewarded for its decision to disarm and re-engage.
International Controls and Inspections. Libya acceded to the Nuclear
Non-Proliferation Treaty (NPT) in 1975. Libya’s nuclear research facility at Tajura
has been subject to IAEA safeguards since 1980. Since Libya announced its intent
to abandon its weapons of mass destruction programs, the International Atomic
Energy Agency (IAEA) and the Organization for the Prohibition of Chemical
Weapons (OPCW) have monitored and assisted in ongoing disarmament activities.
Libya signed an “additional protocol” agreement in March 2004 granting IAEA
inspectors greater access to its nuclear facilities. The IAEA continues to evaluate
Libyan disclosure statements related to the scope of its uranium enrichment and
nuclear weapons development activities, particularly with regard to the sources of the
materials Libya acquired from the proliferation network of Pakistani scientist Abdul
Qadeer Khan. As a result of the 2003 WMD disarmament decision, Libya signed the
Comprehensive Nuclear Test Ban Treaty (CTBT) and acceded to the Chemical
Weapons Convention (CWC) in 2004. Libya also committed to eliminating all its
ballistic missiles beyond a 300-kilometer range with a payload of 500 kilograms and
agreed to abide by Missile Technology Control Regime (MTCR) guidelines. Libya,
the U.S., and the UK established a Trilateral Steering and Cooperation Committee
(TSCC) to oversee the elimination of Libyan WMD and MTCR-related missile
programs in September 2004.
As of October 2005, all materials and components associated with Libya’s
nuclear weapons development program had been removed and all associated
activities had stopped. Libya returned highly enriched nuclear fuel assemblies
weighing 17 kilograms from its Tajura research reactor to Russia in 2004, and Russia
replaced them with low enriched uranium fuel in December 2005 as part of a
program co-sponsored with the International Atomic Energy Agency and the U.S.

---

CRS-37
Department of Energy.109 During the summer of 2006, Libya returned a further 3
kilograms of highly enriched uranium from the Tajura reactor to Russia.110
Libya has signaled its desire to continue its nuclear energy and materials
development plans under the supervision of the International Atomic Energy Agency
(IAEA). France signed a nuclear energy agreement with Libya in July 2007 that
could result in the construction of a nuclear reactor to fuel water desalinization
plants. In August 2007, Libyan officials confirmed that they are negotiating with
unspecified foreign governments for the sale of 1,000 tons of uranium yellow cake
ore stored at a former nuclear facility in Sebha.111
Libya has submitted an inventory of its chemical weapons and related activities
to the OPCW and has destroyed over 3,600 munitions designed to disperse chemical
agents. The OPCW has verified Libya’s inventory of 23 metric tons of mustard gas
and over 1,300 metric tons of precursor chemicals and approved the conversion of
a chemical weapons facility into a pharmaceutical plant for the production of
HIV/AIDS and malaria medication. The Department of State began retraining
assistance programs for Libyan scientists in 2004. Destruction of Libya’s remaining
chemical munitions and precursors is required before December 31, 2010.112 U.S.
State Department officials estimate that a further $20 million may be necessary to
complete the task.113
Further Reading and Historical Resources
Ali Abdullatif Ahmida, The Making of Modern Libya, State Univ. of New York Press,
Albany, 1994.
Lisa Anderson, The State and Social Transformation in Tunisia and Libya, 1830-1980,
Princeton Univ. Press, Princeton, 1986.
Scott Anderson, “The Makeover,” New York Times Magazine, January 19, 2003.
109 International Atomic Energy Agency, Staff Report: Removal of High-Enriched Uranium
in Libyan Arab Jamahiriya, March 8, 2004; RIA Novosti (Moscow), “Russia Supplies 14kg
of Low-Enriched Uranium to Libya,” December 23, 2005.
110 William C. Mann, “U.S. Says Libya Has Returned 20 Kilograms of Weapons-grade
Uranium to Russia,” Associated Press, July 27, 2006; U.S. National Nuclear Safety
Administration, “NNSA Secures Nuclear Material from Libya,” July 27, 2006; and
Associated Press, “Oak Ridge Workers Assess Uranium in Libya,” July 29, 2006.
111 Katherine Griffiths, “Libya Stalls on Pledge to Destroy Stock of Uranium,” Daily
Telegraph (UK), August 13, 2007; BBC Monitoring/Al Jazeera (Qatar), “Libyan Official
Slams UK Paper’s Uranium Allegations, Says Supply ‘Known,’” August 13, 2007.
112 Organization for the Prohibition of Chemical Weapons, “Annual Chemical Weapons
Convention Conference Concludes,” December 11, 2006.
113 CRS analysts’ consultation with State Department staff, September 2006. For another
U.S. official’s estimate see Michael Nguyen, “Libya Chemical Weapons Destruction
Costly,” Arms Control Today, Volume 36, Issue 4, May 1, 2006.

---

CRS-38
Alan J. Day, W.B. Fisher, Richard I. Lawless, et al., “Libya”, in The Middle East and North
Africa 2004, 50th ed., Europa Publications, 2004.
Economist Intelligence Unit, Libya: Country Report 2007
Mansour O. El Kikhia, Libya’s Qadhafi, Univ. Press of Florida, Gainesville, 1997.
Muammar al Qadhafi, Kitaab al Akhdar (The Green Book), Green Book World Center for
Research and Study, Tripoli, 1983.
Helen Chapin Metz (ed.), Libya : A Country Study, Library of Congress: Federal Research
Division, 4th ed., 1989.
Richard B. Parker, Uncle Sam in Barbary, Univ. Press of Florida, Gainesville, 2004.
Ronald Bruce St. John, Libya and the United States, Univ. Of Pennsylvania Press,
Philiadelphia, 2002.
Joseph T. Stanik, El Dorado Canyon: Reagan’s Undeclared War with Qaddafi, Naval
Institute Press, 2003
Dirk Vandewalle, Libya Since Independence, Cornell Univ. Press, Ithaca, 1998.

---

CRS-39
Appendix A: Libya’s Pre-Qadhafi History
Libya’s Colonial Experience
The Ottoman Empire and Qaramanli Dynasty. Ottoman forces first
occupied the coastal regions of the territory that now constitutes Libya in the mid-16th
century. However, Ottoman administrators faced stiff and near constant resistance
from tribal confederations and a rival independent state in the Fezzan region, all of
which limited the Ottomans’ political influence. Beginning in 1711, a semi-
independent state under Turkish official Ahmed Qaramanli emerged in Tripoli and
established control over the Ottoman provinces of Tripolitania and Cyrenaica, with
Fezzan remaining contested. The Qaramanli family maintained its power and
independent rule until the early 19th century through naval privateers and pirates
under its control who were used to collect tribute and ransom from merchant vessels
seized in the Mediterranean Sea.
“The Shores of Tripoli”. The Qaramanli naval forces of Tripoli formed one
component of a regional grouping commonly referred to as “the Barbary pirates,”
which played a pivotal role in shaping the foreign and military policies of the young
United States. Beginning in the late 1780s, a series of confrontations between U.S.
merchant ships and naval raiding parties from Tripoli and other neighboring city-
states such as Algiers and Tunis led to the destruction of U.S. maritime cargo and the
seizure of U.S. hostages. Subsequent negotiations between the United States and the
governments of the Barbary states concluded with the signing of some of the first
bilateral treaties in U.S. history, including U.S. agreements to pay tribute to Tripoli
in exchange for the safe passage of U.S. vessels off what is now the Libyan coast.
Disputes over the terms of this bilateral agreement and continuing attacks on
U.S. merchant ships impressed upon the U.S. government the need for a naval
protection force to safeguard U.S. commercial activity in the Mediterranean. This
need eventually was satisfied by the creation of the United States Navy by Congress
in April 1798. An attack on the U.S. consulate in Tripoli in 1801 and further attacks
on U.S. ships sparked open hostilities between the newly commissioned light naval
forces of the United States and the privateers of Tripoli. Frequent naval engagements
from 1801 to 1805 were often won by U.S. forces, but one skirmish in 1804 ended
with the grounding of the U.S.S. Philadelphia and the capture of her crew. The
conflict culminated in the overland seizure of the eastern Libyan city of Darnah by
U.S. Marines and a team of recruited indigenous forces in 1805 - the basis for the
reference to “the shores of Tripoli” in the Marine Corps hymn. The fall of Darnah
compelled the Qaramanli leadership in Tripoli to relent to demands to ransom the
U.S. prisoners and sign a “treaty of peace and friendship.” Efforts to repatriate the
remains of U.S. personnel killed in these early 19th century military engagements with
Tripoli are ongoing.114
114 See Veterans of Foreign Wars Magazine, “Return Oldest U.S. MIAs,” Volume 94, Issue
1, September 1, 2006; and the Somers Point Historical Society, information available at
[http://www.richardsomers.org].

---

CRS-40
The decline of Qaramanli naval power following the confrontation with the
United States contributed to the dynasty’s steady loss of political power. Ottoman
authorities reoccupied Tripoli in 1835 and began a campaign to pacify and coopt the
region’s tribal confederations. The Ottomans solicited the cooperation of the leaders
of a conservative revivalist Sufi order known as the Sanusiyah based in Cyrenaica,
which they allowed to raise an independent militia and participate in a tacit ruling
partnership. Although the Ottoman administrative structure imposed in the 19th
century formed the basis for a centralized state, the penetration of Ottoman political
power remained incomplete and regional resistance to Ottoman reforms and central
authority persisted into the 20th century.
Italian Annexation and Post War Uncertainty. Italy annexed Tripolitania
and Cyrenaica in 1911, and the Ottoman Empire’s subsequent release of its claim to
its territory in 1912, marked the beginning of a violent twenty-year period of
resistance to Italian rule led by the Sanussi order and local tribes. The Italian
occupation authorities dismantled the remaining Ottoman governing structures and
disrupted the activities of social and cultural institutions across Libya. Sanussi
resistance fighters were defeated during World War I, and the international
community formally recognized Italian control over the territory in 1924. A second
round of anti-Italian insurgency spurred a violent crackdown by Italian forces under
Mussolini, who renamed the territory Libya in 1929. Resistance based in Cyrenaica
was worn down and ultimately crushed by 1931. In 1934, Italian peasant colonists
began entering the provinces, leading to the displacement of local farmers and the
uprooting of established agricultural communities across the country. The population
of Cyrenaica remained hostile to Italian rule and its Sanussi leaders allied themselves
with British colonial forces in neighboring Egypt.
During the Second World War, Libya served as a staging ground for Italian and
German attacks on French North Africa and British-held Egypt. Pivotal battles took
place in Cyrenaica from 1940 to early 1943, when German and Italian forces were
forced from Libya by British troops under General Bernard Montgomery. British-
organized Sanussi fighters played a role in supporting allied operations against
German and Italian forces. Following the war, Libya’s provinces were divided under
British and French protection until the disposition of Italy’s former colonies could
be negotiated. Protracted and complex negotiations continued for years. In
November 1949, U.N. General Assembly Resolution 289 declared that the three
disparate regions would be united in a single, independent state. The resolution also
dispatched a United Nations Commissioner to assist a national assembly representing
the regions in creating institutions for a new state that was to assume sovereignty no
later than January 1, 1952. The strength of tribal and regional identities complicated
the subsequent negotiations and strongly influenced the new government following
independence.
Independence and Monarchy, 1951-1969
A constitution agreed to by the U.N.-assisted National Constituent Assembly in
October 1951 established a federal system of government with central authority
vested in King Idris As Sanussi I and legislative authority vested in a Prime Minister,
a Council of Ministers, and a bicameral legislature. On December 24, 1951, the
United Kingdom of Libya became one of the first independent states in Africa. The

---

CRS-41
first parliamentary election was held in February 1952, one month after
independence. Political parties were banned by the king shortly after independence
was declared, and Libya’s first decade of independence was characterized by
continuous bargaining and rivalry among the provincial governments over taxation,
development, and constitutional issues. In 1963, King Idris replaced the federal
system of government with a unitary monarchy that centralized royal authority, in
part to streamline the development of the country’s newly discovered oil resources.
Prior to the discovery of marketable oil in 1959, the Libyan government was
largely dependent on economic aid and technical assistance it received from
international institutions and through military basing agreements with the United
States and United Kingdom. The U.S.-operated air base at Wheelus field outside of
Tripoli served as an important Strategic Air Command base and center for military
intelligence operations throughout the 1950s and 1960s. Oil wealth brought rapid
economic growth and greater financial independence to Libya in the 1960s, but the
weakness of national institutions and Libyan elites’ growing identification with the
pan-Arab socialist ideology of Egyptian leader Gamal Abdel Nasser contributed to
the gradual marginalization of the monarchy under King Idris. Popular criticism of
U.S. and British basing agreements grew, becoming amplified in wake of Israel’s
defeat of Arab forces in the 1967 Six Day War. King Idris left the country in mid-
1969 for medical reasons, setting the stage for a military coup in September, led by
a young, devoted Nasserite army captain named Muammar al Qadhafi.

---