Washington, Aug. 14 (Reuters): Libya and families of the 1988 Lockerbie bombing victims agreed today to set up a $2.7 billion compensation account in a key step toward closing the book on the mid-air airliner explosion that killed 270 people and further poisoned Libya’s relations with the West.
Lawyers for the families said they and Libyan officials signed the agreement in London after an 11-hour meeting. Libya was expected to follow up by sending a letter to the UN Security Council taking responsibility for the bombing of Pan Am Flight 103 over Lockerbie, Scotland.
The Libyan admission of guilt — long demanded by the US and Britain — and the actual payment of the $2.7 billion were expected to be followed by moves to lift UN sanctions against Libya, possibly as early as next week. Diplomats stressed the matter will not be settled until Libya admits responsibility in writing — something it has long been loathe to do — and pays the compensation, which could ultimately reach $10 million per victim.
US sanctions will stay in place for now despite US oil companies’ eagerness to do business with Tripoli again, US officials said.
Some US sanctions predate Lockerbie and reflect Washington’s long-standing anger at what it views as Libyan support for acts like the 1986 bombing of a Berlin disco that triggered US airstrikes on Libya.
“Libya and the lawyers representing families of the victims have signed an agreement to create the escrow account at the Bank for International Settlements,” British-based Algerian lawyer Saad Djebbar, who has followed the case since 1992, said.
“I expect that by the middle of next week UN sanctions will have been finally removed on Libya,” Djebbar said.
Jim Kreindler, a US attorney for many families, wrote in a letter to his clients: “Great news. After an 11-hour session in London today, we signed an Escrow agreement with the Libyan delegation and the Bank (for) International Settlements.” He said he expected the $2.7 billion to be deposited “soon.”
In a brief telephone interview, Kreindler said Libya would probably wire the money into the account next week.
Some relatives of the 259 people who were killed aboard the Boeing jumbo jet and the 11 people who died on the ground reacted bitterly at what they described as the first step toward Libya being welcomed back into the world community.
“Obviously we’re not happy. We feel this may be the first step in the rehabilitation of (Libyan leader) Muammar Gaddafi,” said Dan Cohen of New Jersey, whose 20-year-old daughter Theodora died in the bombing.