International Law Advisory - President Acts to Ease Libya Sanctions

Further to our advisory of April 20, 2004, the President and the Department of Treasury, Office of Foreign Assets Controls (OFAC) today took formal measures toward lifting U.S. economic sanctions against Libya.

First, President Bush issued Presidential Determination No. 2004-30, certifying that Libya has satisfied certain conditions imposed by United Nations resolutions relating to termination of their weapons of mass destruction program and cessation of support for international terrorism.  By making that certification, the President has formally removed sanctions imposed against Libya pursuant to the Iran and Libya Sanctions Act of 1996 (ILSA).  As noted in our earlier advisory, ILSA authorized the President to penalize any entity -- including a foreign company -- who invests in the Libyan or Iranian petroleum sector.  That sanction now no longer applies to Libya.

Second, OFAC issued a general license substantially lifting the comprehensive economic sanctions program against Libya that was instituted in 1986 under the International Emergency Economic Powers Act and set forth in the Libyan Sanctions Regulations (LSR) (31 C.F.R. pt. 550).  The general license, which will be codified at 31 C.F.R. § 550.575, removes most LSR restrictions, including the bans relating to import/export of goods and investment and dealings in Libya.  The only aspects of the LSR that are retained relate to the continued blocking of Libyan assets that were blocked as of the effective date of the general license, and certain restrictions relating to travel services vis-à-vis Libya.  It should be noted, however, that the general license is not yet effective.  Rather, it becomes effective when the Department of Commerce (DOC) publishes amended export regulations vis-à-vis Libya in the Federal Register.  The DOC has not yet done so; therefore, LSR sanctions currently remain in effect.

We have been advised by Department of Commerce officials that they are currently in the process of finalizing revised export control regulations for Libya.  We will advise you when those regulations are finalized and published. In the meantime, if you have any questions, please contact Ed Krauland at 202.429.8083 or David Lorello at 202.429.6757.

The texts of the Presidential Determination and OFAC general license are set forth below.

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Presidential Determination No. 2004-30
Memorandum for the Secretary of State SUBJECT: Determination and Certification under Section 8(b) of the Iran and Libya Sanctions Act Pursuant to section 8(b) of the Iran and Libya Sanctions Act of 1996 (Public Law 104-172; 50 U.S.C. 1701 note), as amended (Public Law 107-24), I hereby determine and certify that Libya has fulfilled the requirements of United Nations Security Council Resolution 731, adopted January 21, 1992, United Nations Security Council Resolution 748, adopted March 31, 1992, and United Nations Security Council Resolution 883, adopted November 11, 1993.

You are authorized and directed to transmit this determination and certification to the appropriate congressional committees and to arrange for its publication in the Federal Register.
GEORGE W. BUSH

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OFFICE OF FOREIGN ASSETS CONTROL
LIBYAN SANCTIONS REGULATIONS
31 CFR PART 550

GENERAL LICENSE

(Granted under the authority of 50 U.S.C. 1701-06, 22 U.S.C. 2349aa-8 and 2349aa-9, 22 U.S.C. 287c, Executive Orders 12543, 12544 and 12801, and 31 C.F.R. Parts 501 and 550.)

Section 550.575 New transactions authorized.

(a) General License. Except as provided in paragraph (b) of this section, on or after the effective date of this section, all transactions that are otherwise prohibited by subpart B of this part are authorized.

Note to Section 550.575(a): This authorization does not eliminate the need to comply with other provisions of 31 C.F.R. chapter V, or with other applicable provisions of law, including any aviation, financial or trade requirements of agencies other than the Department of the Treasury's Office of Foreign Assets Control. Such requirements include the Export Administration Regulations, 15 C.F.R. parts 730 et seq., administered by the Bureau of Industry and Security of the Department of Commerce, and the International Traffic in Arms Regulations, 22 C.F.R. parts 120-130, administered by the Department of State.

(b) Continued Blocking, Special Provisions for Certain Exports, and Prohibited Transportation-Related Transactions.

(1) All property and interests in property that were blocked pursuant to subpart B of this part as of the effective date of this section remain blocked and subject to the prohibitions and requirements of this part.

(2) The exportation of goods, software or technology (including technical data or other information) to Libya from the United States is hereby authorized, provided that the exportation is licensed or otherwise authorized by the Department of Commerce under the Export Administration Regulations, 15 C.F.R. parts 730 et seq.

(3) Except as expressly authorized by Section 550.574, all transactions prohibited by Section 550.203 of this part, including, but not limited to, flights to or from Libya by U.S. air carriers, code-sharing involving flights to or from Libya, and flights to or from the United States by Libyan air carriers, remain prohibited.

(c) Effective date. This section is effective on the date that the Federal Register publishes the Department of Commerce, Bureau of Industry and Security's "Revision of Export and Reexport Restrictions on Libya."
Issued by direction and on behalf of the Secretary of the Treasury:

OFFICE OF FOREIGN ASSETS CONTROL
By R. Richard Newcomb, Director
Dated: April 23, 2004