1 November 2008
Lagos — Libya has paid $1.5bn into a United States compensation fund for relatives of victims of terror attacks blamed on Tripoli, the US state department said yesterday.
The fund was agreed in August to settle remaining lawsuits in the US.
The attacks include the 1988 Lockerbie bombing that killed 270 people and the 1986 bombing of a Berlin disco which killed three and wounded more than 200.
Under the deal, Libya did not accept responsibility for the attacks, but agreed to compensate victims.
The BBC's Kim Ghattas in Washington says it is the final step in a long diplomatic process, which has seen Libya come back into the international fold.
For its part of the deal, the US agreed to pay $300m into the fund for Libyan victims of US air strikes ordered in retaliation for the Berlin bombing.
The first $300m Libyan payment into the fund was made on 9 October, shortly after an historic visit to Tripoli by US Secretary of State Condoleezza Rice.
Its second payment of $600m was received on Thursday and a final instalment of $600m was made on Friday, said David Welch, the US diplomat who negotiated the settlement.
In exchange, President Bush has signed an executive order restoring the Libyan government's immunity from terror-related lawsuits and dismissing pending compensation cases in the US, the White House said.
She adds that there may have been contributions by American companies lured by business opportunities in Tripoli and keen to expedite the process of normalising ties.
The US State Department, however, has insisted that no money from the American taxpayer will be used for the US portion of the fund.
Libya has already paid the families of Lockerbie victims $8m (£4m) each, but it owes them $2m more.
The fund will also be used to compensate relatives of seven Americans who died in the bombing of a French UTA airliner over Chad in 1989.
In 2004, Libya agreed to pay $35m in compensation to non-US victims of the 1986 Berlin bombing.
In the same year, relatives of non-US victims of the UTA bombing accepted a payment of $1m each from the Gaddafi International Foundation for Charity Associations.
Relations between Libya and the US improved in 2003 when Tripoli stopped working on weapons of mass destruction.
The decision led to the restoration of US diplomatic ties with Libya in 2006.
In turn, it was removed from America's list of countries sponsoring terrorism.
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It an outstanding healthy step towards normalizing and strengthening the bilateral cooperation, cultural, educational and economic exchanges and business partnerships between the pioneer Libyans and their colleagues, the pioneer Americans.
It is an excellent healthy step towards furthering their joint partnerships and understanding to develop and to create business and employment opportunities for both people. It is a healthy leap to improve the skills, the expertise and the experiences of both the Libyans and the Americans. It is a far-sighted step towards building branches and outlets for the factories of The United States to manufacture and tomarket in… [Read Full Text]