US and Libya sign claims settlement agreement
On August 14, 2008, the US and Libya signed a comprehensive claims settlement agreement in Tripoli. The agreement is designed to provide rapid recovery of fair compensation for American nationals with terrorism-related claims against Libya. It will also address Libyan claims arising from previous U.S. military actions.
The agreement is being pursued on a purely humanitarian basis and does not constitute an admission of fault by either party. Rather, pursuant to the agreement an international Humanitarian Settlement Fund will be established in Libya to collect the necessary resources for the claims on both sides. No U.S. appropriated funds will be contributed, and any contributions by private parties will be voluntary. Each side will be responsible for distributing the resources it receives to its own nationals and to ensure the dismissal of any related court actions.
The U.S. Congress has supported this initiative by passing the Libyan Claims Resolution Act, which was signed into law by the President on August 4. The law authorizes the Secretary of State to immunize the assets of the Humanitarian Settlement Fund so they will reach the intended recipients. The law also provides that Libya’s immunity from terrorism-related court actions will be restored when the Secretary of State certifies that the United States has received sufficient funds to pay the Pan Am 103 and La Belle Discotheque settlements and to provide fair compensation for American deaths and physical injuries in other pending cases against Libya. The resources under the agreement are expected to be sufficient to fulfill further purposes such as additional recoveries for death and physical injury because of special circumstances, claims for emotional distress, and terrorism-related claims by commercial parties.
To ensure a successful outcome to this initiative, the final remaining steps are to establish the Humanitarian Settlement Fund and for it to assemble the necessary resources.
C. David Welch, Assistant Secretary of State for Near Eastern Affairs said “The next phase of this now is to create what’s called an international humanitarian settlement fund – I think that’s the precise description – the Humanitarian Settlement Fund, which I will refer to here as the fund. And this fund will be established as kind of a separate entity. It has bylaws that we have negotiated. There will be Libyan representation to it on one side and American representation to it on the other side. These are – it’s an independent body. It’s not a governmental body. And its sole purpose is to fulfill the terms of this agreement.
That fund will sit and collect resources – and I’m confident you will ask me about the resources – that will lead to the payment of the claims once it is fully capitalized. Once the fund receives the agreed level of resources, it essentially – an automatic process starts then, and some amount of those resources are sent to a separate account for American claimants and some amount is sent to another account for Libyan claimants. And then each government undertakes to pay the claims in each case.”
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