Relief as US, EU lift sanctions on Libya

By David Ochami

Over 10,000 employees of Oil Libya Kenya can now sigh with relief after the European Union (EU) and US Department of Treasury lifted sanctions on the firm’s mother company based in Libya.

The US Department of Treasury and EU imposed sanctions on Libyan entities and leaders at the start of the Libyan revolution in February.

A separate regime of sanctions, imposed by the UN, will be reviewed later this week. The Kenyan Government, which has close commercial and political ties with deposed Libyan leader Muammar Gaddafi, refused to seize Libyan entities and reversed attempts by Kenya Commercial Bank to freeze bank accounts of the Libyan embassy in Nairobi.

The Government also rejected US pressure to expel Gaddafi’s diplomats and recognise Transitional National Council (TNC). US banks in Kenya, however, froze some bank accounts belonging to Oil Libya outlets.

On Wednesday, an official at the petroleum firm in Nairobi said the reversal means "American entities [and banks] can now deal with us."

In Kenya Oil Libya has 70 petrol stations and controls about 12 per cent of the petroleum retail market.

Foreign Affairs Minister Moses Wetangula said on Wednesday that Kenya failed to freeze Libyan assets following the UN Security Council (UNSC) resolution because "we cannot trace any Libyan investments in Kenya to Gaddafi, his family and other people covered by these sanctions."

However, the UN resolutions urged Kenya and its members to freeze any assets that Gaddafi could use to finance war.

On September 9, the US Department of Treasury through a letter by Barbara Hammerle, the department’s acting director, at the Office of Foreign Assets Control said transactions with Tamoil Group, which owns Oil Libya "are authorised."

And on September 1, EU published a gazette notice through MDowgielewicz indicating the body was authorising transactions with Tamoil Africa Holdings Limited (Oil Libya Holding Company).

The US Treasury document indicates Tamoil Group is among 16 companies and entities in Libya that the US has allowed its citizens to transact with.

feeble intention

The EU notice identifies Tamoil and 48 other entities, previously under its sanctions and says "in view of the situation in Libya," restrictions set out at the start of the anti-Gaddafi revolt "should be amended."

But The Standard has established that whereas the Central Bank of Kenya or Treasury in Kenya demonstrated feeble intention to comply with UNSC resolutions 1970 and 1973, the intent ran into a legal, political and economic challenges with different lawyers uttering conflicting interpretations of what it means to freeze assets under UNSC resolution 1970.

Some Kenyan lawmakers say the June 6, 2007, Memorandum of Understanding between Libya and Kenya, signed by officials from both countries when Kibaki visited Sirte in Libya was used to shield Libyan assets.

The MoU promised Libyan investments in the oil and petroleum sectors, including purchase of a stake in the Kenya Petroleum Refineries Ltd. Libya was to co-fund the expansion of the Kenya Pipeline into Uganda, northern Tanzania and Central Africa and also buy hotels. TNC has shown indications that it will demand these assets. According to Adan Muhamad, the lawyer who oversees Libyan properties in East Africa, the volume of Libyan assets in Kenya is valued at Sh30 billion.

Reports show Central Bank Governer Njuguna Ndung’u responded to UN pressure by writing an advisory to all commercial banks, which could be holding accounts owned by or associated with Libyan entities in Kenya.

He asked them to watch out for the possibility of "capital flight" owing to the civil war in Libya and advised that "huge withdrawals" from any accounts belonging to Libyan entities must be backed with documentation and details of identification.