Saturday, July 16, 2011

WORLD_ U.S. Recognizes Libyan Rebel Group

MIDDLE EAST NEWS
JULY 16, 2011.
U.S. Recognizes Libyan Rebel Group

Other Nations Also Grant Opposition Council 'Legitimate Governing Authority,' Potentially Freeing Up Needed Funds.
By MARC CHAMPION And JOE PARKINSON


A rebel fighter stood guard in Benghazi, Libya, on Friday. Rebel leaders said they need about $3 billion in aid over the next three months.

ISTANBUL—The U.S. and some 30 other countries officially recognized Libya's opposition National Transitional Council as the nation's "legitimate governing authority" Friday, opening the way for billions of dollars in frozen Libyan assets to be released to the country's rebels.

Diplomats described the move, which came in the concluding statement of a meeting of what's known as the Libya Contact Group in Istanbul, as a boost for opposition forces that have been fighting to topple Col. Moammar Gadhafi, as well as a clear message to the Libyan strongman to step aside. The group comprises nations that support a democratic transition in Libya.

The U.S. and many of its North Atlantic Treaty Organization allies had previously treated the Benghazi-based council, known as the TNC, as their legitimate "interlocutor" in Libya. The difference in status holds significant legal implications, diplomats said.

"We still have to work through various legal issues, but we expect this step on recognition will enable the TNC to access additional sources of funding," Secretary of State Hillary Clinton told reporters. A senior U.S. official said that working out the simplest legal way for the U.S. to disperse the funds could take time. The official declined to say how much.


On guard: The U.S. and some 30 other nations granted 'legitimate governing authority' status to Libya's opposition umbrella group, opening the way to release billions of dollars in frozen government assets to the rebels. Above, rebels man a desert outpost Friday in western Libya.

Col. Gadhafi said Friday he would continue to fight despite the decision, according to the Associated Press.

In rebel-held areas of Libya, fighters and officials called the U.S. decision a decisive defeat for Col. Gadhafi. "It's the final blow to make him realize he has no way out of this," said Masoud Abdallah, a 46-year-old judge in Zintan, a town in Libya's western mountains.

More than $30 billion of Libyan assets are frozen in the U.S. One option reviewed by U.S. officials would involve issuing "directive licenses" to banks in the U.S that would authorize the release of funds. That could fall afoul of provisions in two United Nations Security Council resolutions on Libya, according to people familiar with the matter.

Under a second option, frozen assets could be used as collateral for loans to the TNC. That is more complex to set up but wouldn't run into UN hurdles.

The U.S. Congress has been considering legislation to assist with unfreezing of the funds, but the process has stalled, said U.S. officials. The decision to formally recognize the TNC was aimed, in part, at finding additional ways to unlock the money.

U.S. and European officials view their action in Libya as a possible model for how to navigate the surge of political uprisings that have consumed the Middle East and North Africa. The U.S. and its allies are particularly focused on what lessons Libya can hold for Syria, where a popular movement is seeking to overthrow President Bashar al-Assad.

Syrian activists, including Sunnis, Kurds and Christians, are increasingly working to form a unified front against Damascus, not unlike the TNC. U.S. and European diplomats said the Syrians aren't yet as sophisticated as the TNC. Syrian activists are holding simultaneous meetings this weekend in Damascus and Istanbul in a bid to develop a more unified stance.

With Friday's announcement, the U.S appeared to be following, rather than leading, some of its North Atlantic Treaty Organization allies. Italy said it would immediately release €100 million, or about $142 million, in credit to the TNC using frozen assets as collateral, and had already begun taking legal steps to make that possible.

Italy's Foreign Minister Franco Frattini said a contract for the €100 million would be signed "in the next few days," and that his country was in a position to offer up to €400 million in total.

France's Foreign Minister Alain Juppe later told reporters his country was in the process of unfreezing $250 million in Libyan assets, but added that this could take time due to legal complications. Turkey, meanwhile, has already pledged $200 million to the TNC under a system that uses frozen Libyan assets to back loans.

"Our loan implementation will constitute an example to other countries … we should cover the needs of our Libyan brothers," said Turkish Foreign Minister Ahmet Davutoglu, at a closing press conference with the meeting's co-chairman, UAE Foreign Minister Sheikh Abdullah bin Zayed al-Nahyan.

Mr. Davutoglu had opened Friday's conference with a call for the contact group members to loan the TNC "a percentage" of the funds frozen in their counties to meet humanitarian needs during the religious Ramadan holidays next month.

How to handle Ramadan also formed part of the discussions among diplomats, who said NATO would have to navigate between the twin dangers of granting Col. Gadhafi propaganda victories by continuing to bomb and giving him time to regroup his forces by relenting.

Mahmoud Shamman, spokesman for the TNC, said there was "no chance" of a cease fire before Ramadan, a position backed by France's Mr. Juppe. Mr. Shamman also said the TNC needs $3 billion over the next six months, but so far has been promised only $700 million to $800 million.

Mrs. Clinton said the decision to give full recognition to the TNC had come only after it provided "assurances regarding its intentions to pursue democratic reform that is inclusive geographically and politically, and to uphold Libya's international obligations and to disburse funds in a transparent manner, to address the humanitarian and other needs of the Libyan people."

Pressed as to why it had taken the U.S. so long to recognize the TNC, Mrs. Clinton said: ""we really acted in warp time in diplomatic terms, but we took our time to make sure that we were doing so based on the best possible assessments."

Diplomats said Friday's contact group meeting, the fourth since it was formed in March, differed from previous ones in focusing on the post-Gadhafi transition, rather than on NATO's military campaign. Mr. Juppe said there was agreement that Col. Gadhafi would have to leave power ahead of any political transition, but that it was up to the Libyans to decide whether that meant his departure from the country.

There were few answers, though, on how to achieve that. Friday's joint statement reiterated support for actions by the International Criminal Court to bring Col. Gadhafi to justice, making any deal under which he might leave for exile difficult.

—Charles Levinson in Zintan, Libya, and Jay Solomon in Washington contributed to this article.

Write to Marc Champion at marc.champion@wsj.com and Joe Parkinson at joe.parkinson@dowjones.com

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