Britain to send $1.6bln in frozen assets

The UN Security Council let Britain release $1.6 billion in seized assets to buy aid for Libya but despite new calls for urgent help a bid by France and Germany to free $8.6 billion remains blocked, diplomats said.

UN Secretary General Ban Ki-moon said there was now a critical shortage of water in the Libyan capital, Tripoli, even though rebels are now largely in control having beaten Muammar Gaddafi’s forces.

The money held in Britain is 200 million banknotes with a value of 1.86 billion Libyan dinar, about $1.6 billion, printed by a British firm.

Britain’s Foreign Secretary William Hague said the release “represents another major step forward in getting necessary assistance to the Libyan people, building on the remarkable progress in recent days.

“These banknotes, which were frozen in the UK under UN sanctions, will help address urgent humanitarian needs, instil confidence in the banking sector, pay salaries of key public sector workers and free up liquidity in the economy.”

China, a key member of the UN Security Council sanctions committee, lifted its block on Britain’s move after the Beijing government gave its approval, diplomats said. Sanctions committee measures require the approval of all 15 members. Russia is holding up Germany’s request to release about one billion euros ($1.4 billion) in seized assets and France’s move to unfreeze about five billion euros ($7.2 billion) to buy humanitarian aid and keep essential services going in Libya, diplomats said.

The Russian UN mission has asked for more information, one western diplomat said.

The United States was given approval to send about $1.5 billion in seized assets back to Libya last week, after a dispute with South Africa over whether easing UN sanctions implied recognizing the rebels who are fighting Col Gaddafi.

The UN leader said the first $110 million from the funds held in the United States had now been allocated.

The UN secretary general appealed to the Security Council to give urgent consideration to requests for money by the Libyan rebel National Transitional Council (NTC). Mr Ban told a Security Council meeting on Libya that with the NTC now “largely” in control of Tripoli and most other major cities, “I think we can all be encouraged by the current trends.” But he added that growing humanitarian shortages in Libya demand “urgent action.”