PAPER ON LIBYA FOR NSC MEETING FEBRUARY 4, 1982

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84B00049R000200370024-9
• Release Decision: RIFPUB
• Original Classification: T
• Document Page Count: 28
• Document Creation Date: December 27, 2016
• Document Release Date: July 21, 2011
• Sequence Number: 24
• Publication Date: February 3, 1982
• Content Type: MEMO

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CONFIDENTIAL
DEPARTMENT OF STATE
Washington, D.C. 20520
February 31 1982
(with TOP SECRET/SENSITIVE ATTACHMENT)
MEMORANDUM FOR MR. WILLIAM P. CLARK
THE WHITE HOUSE
Subject: Paper on Libya for NSC Meeting February 4, 1982
Attached is a discussion paper for the February 4
NSC meeting on Libya. An executive summary covers the
document.
L. Paul Bremer, III
Executive Secretary
CONFIDENTIAL
(with TOP SECRET/SENSITIVE ATTACHMENT)
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EXECUTIVE SUMMARY
NEXT STEPS ON LIBYA
The NSC considered the issue of next steps toward
Libya at two meetings in December, the first addressed to
the broad pattern of Libyan activity threatening to U.S.
interests and the second focused more narrowly on the Libyan
assassination threat against key U.S. officials within this
country and abroad. These meetings were followed by the
December 10 announcement calling for the voluntary with-
drawal of Americans from Libya and announcing the invali-
dation of U.S. passports for travel to Libya. At the same
time a private demarche was sent to Libya to make it clear
that we would consider any Libyan terrorist attack against
a U.S. target to be tantamount to an armed attack upon the
U.S. and that we would respond accordingly. The demarche
also contained a warning against any Libyan interference
with the withdrawal of Americans from Libya or impairment
of the safety of Americans still in Libya.
On January 21 the NSC was provided with a status report
on Libya. Implementation of the steps ordered in NSDD 16
was reported as proceeding well.
The basic decisions before this NSC meeting concern
the issue of whether to revalidate and then activate the
next steps toward Libya discussed at the first December
NSC meeting. These are steps designed to address the
broad and long-lasting Libyan threat and not the proximate
threat of "hit squads" that was the focus of the second
December NSC meeting and of the contingency planning
described in NSDD 16.
Now that we have achieved the withdrawal of most
Americans from Libya and reduced to a significant degree
the prospect of Libyan hostage-taking in reprisal for
U.S. action, we are able to move on to consider next
steps for dealing with the broader Libyan problem. While
it is necessary to revalidate the contingency planning
that focuses on the assassination threat in light of
changed Libyan and international circumstances, the
primary issues to be decided now are whether and when
to invoke IEEPA to take the economic measures described
as Item 4a (an embargo of imports of Libyan oil) and
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Item 4b (an embargo of exports to Libya) in NSDD 16 and
whether to undertake additional measures toward Libya
by choosing among options developed on an interagency
basis. In addition, this NSC meeting will provide an
opportunity to revalidate the military measures that
address the broader Libyan threat and to assess the advis-
ability and appropriate timing of another U.S. naval exer-
cise in the Gulf of Sidra and several other issues.
Discussion of Oil Embargo and Export Embargo
1. Oil Boycott: The argument for implementing an
oil boycott by invoking IEEPA as soon as possible is that
this is the absolute minimum we can do to increase the
pressure on Qadhafi and to underline our seriousness about
Libya. A boycott can be fully justified as a long over-
due measure in the face of a sustained pattern of Libyan
aggression and misbehavior. It would show that we will
no longer help finance Libyan terrorism and subversion,
eliminating a major source of doubts about the seriousness
of U.S. opposition to Qadhafi. While an embargo would
have little direct effect on Libya--since it can sell its
oil elsewhere--it is a necessary next step in any long-term
strategy toward Libya and can help to build the basis for
stronger actions in the future.
The principal arguments against imposing an oil boycott
are that it would not have an appreciable economic effect in
Libya; it could redound to Qadhafits benefit in the region;
and it could legitimize using oil as a political weapon.
Moreover, while the boycott will not affect allied economic
interests, there will be political costs. Finally it might
also be argued that even if a boycott were implemented, it
might be a more effective symbol if it were used in response
to a specific provocation.
2. Timing the Ban on Exports: The Polish crisis
has increased allied concerns about extraterritorial appli-
cation of unilateral economic sanctions, as well as the
possibility that the allies may charge us with the reckless
use of economic sanctions for political ends.
Since we can use IEEPA to impose an export ban without
enforcing it extraterritorially, however, we should con-
sider implementing it simultaneously with the oil boycott
because: (1) The two sanctions together will make the
strongest possible political point to Qadhafi and those
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threatened by him that the U.S. is no longer willing to
do business as usual with an international outlaw; (2) Imple-
menting both measures together avoids the potential incon-
sistency that would arise if we refuse to buy Libyan oil
but continue to sell Libya technology, particularly oil-
related technology; (3) Negative allied reactions can be
sharply curtailed by a U.S. decision not to seek extra-
territorial enforcement, and what criticism there is can
be absorbed all at once rather than being faced all over
again in several months; and (4) We have justification
for taking both measures at this time, on the grounds that
the Americans have only just gotten out of Libya.
The main argument against implementing a full export
ban is that such a ban without extraterritorial enforcement
(e.g., transshipment controls) would be little more than an
empty gesture. This could make the U.S. look ineffectual
and could, thus, increase domestic pressure to impose
extraterritorality. Even if we decide to take this further
step, there is an argument that we should delay taking it
until after we have had the opportunity to assess the Libyan
reaction to the oil boycott and also that we should hold it
in reserve so we can respond to further Libyan provocations.
Other Issues
3. Withdrawal of Remaining U.S. Citizens: It makes
little sense to invoke IEEPA exclusively for the purpose
of attempting to force withdrawal of the Americans remaining
in Libya after mid-February. However, if we impose either
an oil boycott or an export ban, we may want to use IEEPA
to remove as many Americans as possible and put us on
firmer ground if something does happen to those that remain.
The argynent against doing so is that the few additional
withdrawals we might achieve are not worth the costs of
using IEEPA in this manner.
4. Banning Financial Transactions in Libya: If it
is decided to implement either or both economic measures,
it may also make sense to include a ban on financial
transactions by Americans in Libya, also under IEEPA. While
this may force some U.S. companies to abandon their equity
holdings or forfeit their performance bonds in Libya and
could impose severe economic conseauences for them, such a
ban would avoid charaes that U.S. capital is financing and
TO
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is financing and facilitating Libyan oil production and
development. However, it should be noted that this issue
was not discussed on December 8, 1981 and its implications
may not have been adeauately considered. Hence, we may
want to delay such a decision while stressing that actions
affecting U.S. company holdings and operations in Libya
should be on a voluntary basis.
5. Gulf of Sidra Exercise: We will not have two
carriers in the Mediterranean until April at the earliest
and perhaps not until June. Nevertheless, given Qadhafi's
nervousness and the importance of keeping the pressure on
him, there is good reason to seek to schedule an exercise
at a reasonably early time. The counterargument to this
is that another exercise soon might back Qadhafi into a
corner and build sympathy for him in the region, particu-
larly if a military confrontation again results.
Before taking any or all of the above steps, we need
a public affairs and Congressional strategy that prepares
the ground for the announcement of new measures directed
at Libya. The announcement should be formulated so that it
reflects a balanced and well-rounded approach, rather than
a set of random negative sanctions.
Since the view is widespread that our initial measures
against Libya were linked to the assassination-terrorist
dimensions of the Libyan threat, the new measures we may
take may not be well understood by the public--especially
if the assassination threat appears to have receded. As
a result, in laying the groundwork for these new measures
with the Congress and the public, it will be very important
to explain the broader strategic threat that Libya continues
to pose.
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DISCUSSION PAPER FOR FEBRUARY 45 NSC MEETING:
NEXT STEPS ON LIBYA
I. INTRODUCTION
II. CURRENT LIBYAN BEHAVIOR
III. U.S. OBJECTIVES
IV. CHANGES IN THE INTERNATIONAL ENVIRONMENT SINCE DECEMBER 10
AND THEIR IMPLICATIONS
A. Poland
B. U.S.-Libyan Relations
C. World Oil Market
D. Relations with Regional States
E. Soviet Posture
F. Public Opinion
V. REVALIDATION OF OIL EMBARGO AND EXPORT BAN
-- Embargo of U.S. Oil Imports from Libya (NSDD Item 4a)
-- Legal Authority for Embargo
-- Embargo of U.S. Exports to Libya (NSDD Item 4b)
-- Issue of Prior Withdrawal of Americans
VI. ADDITIONAL MEASURES
A. Transaction Controls
B. Selective Export Controls
C. Export Licensing Requirements
D. Diplomatic Initiatives to Close Libyan Peoples' Bureaus
in Other Countries
VII. MILITARY AND SECURITY MEASURES
A. Responding to Direct Libyan Attacks Against U.S. Targets
B. Dealing with Continung Libyan Threats in the Region
1. Assistance
2. Increased Presence
3. Expanded Cooperation
4. Contingency Planning
VIII. CONGRESSIONAL AND PUBLIC AFFAIRS STRATEGY
IX. TIMING
X. ECONOMIC AND SECURITY POLICY TOWARD LIBYA:
SUMMARY DECISION SHEET
APPENDIX: Tab A -- IMPLEMENTATION OF DECEMBER 10 STEPS
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DISCUSSION PAPER FOR FEBRUARY 4 NSC MEETING:
NEXT STEPS ON LIBYA
I. INTRODUCTION
The NSC considered the issue of next steps toward
Libya at two meetings in December, the first addressed to
the broad pattern of Libyan activity threatening to U.S.
interests and the second focused more narrowly on the Libyan
assassination threat against key U.S. officials within this
country and abroad. These meetings were followed by the
December 10 announcement calling for the voluntary with-
drawal of Americans from Libya and announcing the imposition
of passport restrictions on travel to Libya. At the same time
a private demarche was sent to Libya to make it clear that we
would consider any Libyan terrorist attack against a U.S.
target to be tantamount to an armed attack upon the U.S. and
that we would respond accordingly. The demarche also contained
a warning against any Libyan interference with the withdrawal
of Americans from Libya or impairment of the safety of Americans
still in Libya.
On January 21 the NSC was provided with a status report
on Libya. Implementation of the steps ordered in NSDD 16
(of December 10) were reported as proceeding well. (The
current status of progress on these steps is presented in
Tab A of this paper.) In addition, the January 21 NSC
received a report on the status of an interagency review
of relevant changes in the international environment and in
Libyan behavior and attitudes since the December 10 steps were
instituted, as mandated by NSDD 16. The findings of this
review are incorporated in the appropriate sections of this
paper and are highlighted in Section IV.
The basic decisions before this NSC meeting concern
the issue of whether ,to revalidate and then activate the
next steps toward Libya discussed at the first December NSC
meeting. These are steps designed to address the broad and
long-lasting Libyan threat and not the proximate threat of "hit
scruads" that was the focus of the second December NSC meeting
and of the contingency planning described in NSDD 16.
Now that we have achieved the withdrawal of most U.S.
citizens from Libya and reduced to a significant degree the
prospect of Libyan hostage-taking in reprisal for U.S. action,
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we are able to move on to consider next steps for dealing
with the broader Libyan problem. While it is necessary to
revalidate the continclency planning that focuses on the
assassination threat in light of changed Libyan and
international circumstances, the primary issues to be
decided now are whether and when to take the economic
measures described as Item 4a (an embargo of imports of
Libyan oil) and Item 4b (an embargo of exports to Libya) in
NSDD 16 and whetFg773Thndertake additional measures toward
Libya by choosing among options developed on an interagency
basis by the Libya Task Force and presented in Section VI of
this paper. In addition, this NSC meeting will provide an
opportunity to review the contingency military measures and the
military measures thataddress the broader Libyan threat and
which are presented in Section VII of the paper. Finally this
meeting provides an opportunity to assess the advisability and
appropriate timing of another U.S. naval exercise in the Gulf
of Sidra.
II. CURRENT LIBYAN BEHAVIOR
Libyan support of international terrorism and support
of subversion of moderate regimes has not ceased. The
assassination threat against U.S. officials captured atten-
tion by virtue of the drama and audacity of the Libyan plan.
Yet it can be understood only as part of a broad pattern of
support of international terrorism and deep Libyan hostility
toward the United States and the West. The list of Libyan
efforts to use terrorist tactics and to destabilize friendly
regimes is a long one. In the context of the Tripartite
Pact with Ethiopia and South Yemen, Libya is sending terror-
ists into the Sudan in order to capitalize on the strains
that currently exist within that country. Libya may also be
targetting the Sultan of Oman for assassination. In spite
of the resumption of diplomatic relations with Saudi Arabia
and the recent agreement to reopen the border between Libya
and Egypt, Libya is still actively positioning itself to
threaten Tunisia, Morocco, and Egypt and Saudia Arabia.
Through a policy that relies on bribes, intimidation, and
support of internal dissidents, Libya is interfering in the
internal affairs of a score of African states located far
from its own borders: Ghana and Somalia are prominent
examples.
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The extent of Libyan reaction does not stop there --
Libyan financial support of the regime in Nicaragua, the
possibility that it is sending arms to the insurgents in El
Salvador, and its financial support of one of the political
factions in the island of St. Lucia attest to the role that
Libya is seeking to play in Central America. Libyan rela-
tions with the Soviets have, if anything, become closer
during the weeks intervening between the December 10
decisions and the present. While the Libyans and Soviets
differ in ideology, the fact that their foreign policy goals
are similar and that the Libyans can serve Soviet interests
cannot be overlooked now anymore than it could when the initial
NSC deliberations about Libya took place.
III. U.S. OBJECTIVES
The objective behind the measures taken on December 10
(i.e., demarche to Libya, request for withdrawal of Americans,
and passport restrictions) was a deliberately limited one. We
wanted to signal Qadhafi that the U.S. was serious about re-
sponding t3-NTF-Misbehavior, and to take necessary measures
to ensure the safety of Americans in Libya against the existing
Libyan threat so that our freedom of action would be increased
in the future.
These measures were undertaken within the broader context
of our basic objectives with respect to Libya: (a) to end Libyan
support for terrorism, (b) to inhibit Libya from undermining
governments friendly to the U.S., and (c) to influence Libya to
stop assassination efforts against U.S. and oaer officials and
Libyan nationals in other countries. In order to achieve these
objectives we are seeking to isolate Qadhafi within the world
community and to diminish Libyan capabilities.
An important first step, now that most Americans have left
Libya, is to remove the inconsistency between our political
and economic policies toward Libya. Implementation of the
economic measures under consideration here (the oil embargo,
an embargo of exports to Libya, and a ban on commercial trans-
actions by U.S. firms within Libya) will prevent continuation
of the current cycle whereby U.S. oil income and production
expertise plus the export of U.S. technology translate into
Libyan income. This income is then used to purchase advanced
Soviet weaponry and to spread terrorism and subversion in
moderate states in the region, in Europe through indirect
funding of terrorists there, and, most recently, reaching to
the United States itself.
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Opinion differs about the ability of the U.S. to reduce
Libyan capabilities over more than the short-term by instituting
economic measures. At a minimum there will be dislocation costs
as substitute sources of supply are found. In some areas, such
as oil technology equipment of an advanced nature, substitutes
are difficult to find and U.S. withdrawal from the field will
both hurt the Libyans and create new competitor industries in
other countries.
Opinion also differs about the extent to which Qadhafi's
behavior can be changed by any measures (political, diplomatic,
or military) that the U.S. could undertake. Some argue that
Qadhafi will not change no matter what we do, and that we must
limit our objectives to those of weakening him and isolating
him. Others argue that Qadhafi is a shrewd political operator
who will moderate his behavior (albeit tactically) in response
to punishing economic measures and symbolic demonstrations of
military presence and force in the area. (Qadhafi's current
susceptibility to U.S. pressure is discussed in Section IVB
below.)
IV. CHANGES IN THE INTERNATIONAL ENVIRONMENT SINCE.
DECEMBER 10 AND THEIR IMPLICATIONS
(A) Poland: The key development since our December 10
actions against Libyahas been the military crackdown in Poland
and our response of imposing economic sanctions against Poland
and the Soviet Union. We have asked our allies to take parallel
economic and other actions and not to undermine the effectiveness
of measures we have taken that are broader than theirs.
These developments have increased the existing strains
within the Alliance, and will have an interrelationship with
implementation of economic sanctions against Libya. Both the
oil import embargo and the embargo on U.S. exports to Libya are
explicitly designed to be unilateral measures. We do not expect
that imposition of a unilateral U.S. import embargo against
Libya would strain U.S. ties with its allies. An export
embargo could, however, have abrasive effects because it raises
issues of potential extraterritorial application.
We face a dilemma here: in order to be effective to the
maximum degree from an economic standpoint, our prohibition
against exports to Libya would have to include provisions
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preventing re-export of U.S. origin products and prohibitions
against alternative supply of proscribed items by U.S. subsid-
iaries and licensees operating in third countries. Such a
policy would place an economic burden on our allies and incur
political costs within the alliance. The recommended solution
to this dilemma is one which squares with our intention to make
a strong symbolic political statement that the United States
has decided to conduct its own policy in a way that isolates
Qadhafi and prohibits normal U.S.-Libyan commercial relations.
We would welcome Allied support but will not pressure them to
do so. Therefore, we could explicitly avoid extraterritorial
application in the regulations designed?EU-institute the
export controls being considered in this policy review.
(B) U.S./Libyan Relations.
Qadhafi at present is in a relatively weak position
internally. A recent coup attempted by the trusted mili-
tary and consumer discontent over food shortages and cutbacks in
imports due to cash flow problems may lead him to make some
temporary tactical concessions to the U.S. but we do not expect
his basic political orientation and methods of operation to
change.
CIA reports that the increasing militant posture of the
U.S. has led Qadhafi to feel vulnerable and that Qadhafi's
perception of threat has increased markedly during the period
between the measures ordered by the President on December
10 and the present. We cannot determine with precision the
effect that our demarche had on Qadhafi. Qadhafi sent an envoy
claiming that he desires better relations with the U.S. and that
our withdrawal of Americans from Libya was greeted with "shock"
and "panic" by Qadhafi. This is in sharp contrast to the sense
of bravado with which Qadhafi reacted to the Gulf of Sidra
incident in August and which he sustained during the pre-
December 10 media attention accorded him when the Libyan plot
to assassinate senior U.S. officials was first revealed.
In framing a policy that will capitalize on Qadhafi's
feeling of being under pressure, it is well to bear in mind
CIA's assessment that (1) Qadhafi is at heart a survivor with
strong self-preservation instincts, who has shown a capacity for
judicious political calculation; (2) any public facing down of
Qadhafi leaves him psychologically and politically choiceless
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and would be taken as a dare, not a deterrent; and (3) Qadhafi
has demonstrated that he can back down in response to a clear
message privately communicated.
(C) The World Oil Market:
World oil markets are expected to remain soft at least
through 1982, barring any unforeseen disruptions involving major
producers or concerted action by a number of producing countries
to reduce production. Free world demand has been falling since
1979 and may decline further in 1982, and the OPEC countries as
a group are producing about 3.0 mmbd below the sum of their
"preferred" levels. As a consequence, the economic effects of a
unilateral U.S. boycott of Libyan oil on either the U.S. or
Libya are not likely to be noticeably different than they were
in December.
As a result of Libya's reducing the price of its oil from
$41 to $37 per barrel, Libyan oil producing rose from 600,000-
700,000 b/d in November 1981 to an estimated 1.0-1.1 mm b/d
currently. U.S. imports of Libyan oil have averaged 150,000 b/d
for the last few months, about 3 per cent of total U.S. imports
and 15 per cent of total Libyan exports. This is a sharp drop
from the 1980 figure of 716,000 b/d.
(D) Relations with Regional States:
There have been several developments sinde early December
in U.S. and Libyan relations with North African and Middle
Eastern states. The Israeli action with regard to the Golan
Heights and the U.S. veto of sanctions in the UN has put the
U.S. in a more difficult position with regard to Arab public
opinion, and increased the desire of both radical and mod- ,
erate states for at least a semblance of Arab unity. Also
the worsening position of Iraq in its conflict with Iran
and growing Iranian assertiveness in the Gulf gave the Arab
moderates a greater incentive to close ranks with states like
Libya which were backing Iran. These were among the factors
leading to Saudi recognition of Libya at the end of December.
The reactions of regional states to the December 10
measures held few surprises. The governments of Morocco,
Egypt, Sudan, Tunisia, Jordan, Oman, and North Yemen were
privately supportive, though most took a low public profile.
The Saudis expressed a concern that our actions were building
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up Qadhafi, and Mubarak worried that they might lead to
increased Soviet presence in Libya. The net effect of these
developments has been to increase somewhat the political
costs in the region of further U.S. actions against Libya.
The Tunisians have become increasingly concerned about Libyan
subversive activities and overt Libyan support for the Rawlings
coup in Ghana has increased distrust among African states.
Meanwhle, Libya's withdrawal from Chad has eased somewhat the
threat to the Sudan and improved Qadhafi's relations with
neighboring states.
(E) Soviet Posture:
Soviet propaganda has ridiculed U.S. action towards
Libya and suggested that Soviet support for Qadhafi has had a
"sobering" impact on the U.S., but nothing has occurred to
suggest that Moscow's basically cautious posture has changed.
Preoccupation with the Polish crisis may make the Soviets less
inclined to get actively involved in defending Libya, although
they will continue to use the Libyan crisis to increase their
presence there.
(F) Public Opinion:
The predominant perception of Libya among Americans changed
from being "unfriendly" to being an "enemy" of the U.S. between
November and December according to a Harris poll. Survey data
indicated considerable public support for an oil boycott although
there was strong opposition to military action even in polls
taken at the time when media reports of Libyan hit squads in the
U.S. were in full swing.
V. REVALIDATION OF OIL EMBARGO AND EXPORT BAN
In light of our objectives toward Libya and an awareness
of the changes that have occurred in the international environ-
ment since, the U.S. should activate for reconsideration and
confirm the further economic measures for which the President
directed the Secretary of the Treasury to initiate and coordi-
nate preparations, that is: termination of U.S. oil imports
from Libya and prohibition of U.S. exports of equipment and
technology to Libya.
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Item 4a: An Embargo of U.S. Oil Imports from Libya:
The discussion of this step contained in the NSC discusion
paper of December 8 continues to be valid. World oil supplies
are expected to remain more than adequate to meet demand
through 1982, barring unforeseen political disruptions.
As noted in that paper, a unilateral oil embargo would
not have a significantly long-lasting economic impact on Libya.
This would be a political statement putting Qadhafi on notice
that we are determined to isolate him and signal our moral
outrage at his support of terrorism and subversion. It would
also demonstrate to regional states, the Soviets, Libyans and
our own public the seriousness with which we view Libya's
lawless and aggressive behavior. By denying U.S. funding for
Libyan terrorism and arms, we will free ourselves from charges
of hypocrisy and will strengthen confidence among Qahafi's
potential victims that we are serious in our determination to
assist them to resist Libyan aggression. We also will make the
important political point that Libyan oil revenues are the
source of funding for Libyan terrorism and aggression.
Such a unilateral U.S. boycott would not strain the
alliance because it will not affect any concrete allied econ-
omic interests. 'We cannot expect much support from our allies
on a boycott or on other measures against Libya, particularly
in the wake of our discussions of sanctions against Poland. We
will want to make clear that we would welcome allied support,
are not pressing for it, but also expect the allies to refrain
from undercutting U.S. actions or from any public criticism of
them.
The legal authority for an oil embargo would be the
International Economic Emergency Powers Act (IEEPA), and a
draft Executive Order has been prepared on this basis. IEEPA
gives the President broad discretionary authority to respond to
"any unusual and extraordinary threat, which has its source in
whole or substantial part outside the United States, to the
national security, foreign policy, or economy of the United
States, if the President declares a national emergency" with
respect to that threat. Thus, the President must find that
there is an "unusual and extraordinary threat." These are
words of judgment. Courts will be extremely loathe to question
a reasoned decision by the President that the statutory standard
has been met.
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There may be $200 million worth of such bonds constituted as
irrevocable letters of credit with U.S. banks or their subsid-
iaries or branches overseas. The U.S. could impose controls
attempting to block payment in the event of Libyan presentation.
However, putting such controls on U.S. banks could injure their
long-term competitiveness. Applying them to foreign branches
or subsidiaries would pose clear conflicts with foreign bank
laws and requirements.
Prior Withdrawal of Americans. By early February,
the number of employees of U.S. oil companies operating in
Libya will have declined to less than 100. In addition,
there will be an indeterminate number of other Americans,
mostly spouses of Libyans or Americans working directly for
the Libyan government, who will probably choose to remain in
Libya. Those remaining after that point will be doing so of
their own freewill and in conscious disregard of clear U.S.
policy. The discussion paper for the December 8 NSC meeting
suggested a further stage of forcing withdrawal. This can be
done by invoking IEEPA to prohibit financial transactions
related to the travel to or presence in Libya of U.S. nationals,
at the same time as IEEPA is used to institute the economic
sanctions.
The December 8 NSC discussion paper suggested using
IEEPA to achieve mandatory withdrawal of Americans prior
to institution of the next steps. Further study suggests
that it would be unwise to invoke IEEPA for this single pur-
pose, particularly because of the Constitutional issues raised
by an order interfering with the right to travel. Given
the good record of compliance with the December 10 withdrawal
request, it also can be argued that a mandatory withdrawal
order is unnecessary.
VI. ADDITIONAL MEASURES
A. Transaction Controls.
The earlier NSC papers considered the issue of trying to
achieve the disposition of equity of U.S. firms in Libya on
foreign policy grounds. The Exxon example of voluntary dis-
position of equity, was pertinent and forms of voluntary and
mandatory requests to follow this example were considered.
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Mandatory divestiture of equity by U.S. firms in Libya could be
accomplished under IEEPA but would raise serious policy problems.
In addition, IEEPA is limited in this connection to the extent
that it permits the President to prohibit the holding by U.S.
citizens of property only where a foreign country or foreign
national has an interest in that property. It may therefore be
preferable to use IEEPA instead to prohibit U.S. citizens and
firms from engaging in commercial transactions in Libya and
with Libyans, on foreign policy grounds. Such an application
of IEEPA could be undertaken in conjunction with steps 4a and
4b (the oil embargo and an embargo of exports) or with step 4a
alone. Similarly, the timing could be phased or simultaneous
with respect to any or all of these three measures.
To halt U.S. commercial relations in Libya in this manner
would be a serious step, one with obvious adverse implications
for that portion of the U.S. business community now doing
business in Libya. On the other hand, it would remove the
inconsistency (certain to be focused on by observers, par-
ticularly those in the media) that arises from invoking steps
4a and/or 4b in the absence of transaction controls. In the
instance of an oil boycott, for example, U.S. oil companies
would still be able to conduct their operations in close to
full force. They will have substituted foreign nationals for
the Americans who were withdrawn because of the December 10
policy initiative and they will be able to continue to sell the
approximately $8 billion of their annual production to Europe,
as before.
B. Selective Export Controls.
Should we decide not to have a total embargo or implement
transaction controls, we could take steps to control selected
exports. At present, export controls now in effect do not
allow us to deny dual use technology, including computers,
communications equipment, and aircraft ground equipment,
destined to the Libyan government. New controls blocking
delivery of such technology to Libya would increase the
pressure on Libya and make U.S. actions more consistent.
To implement this step, new regulations would be published
under the foreign policy provision of the Export Administration
Act to deny the export of "national security" items (those
items controlled for export to the USSR) to either 1) government
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and military endusers, including the Libyan National Oil
Company or 2) all endusers in Libya including foreign private
firms.
C. Export Licensing Requirements.
An additional option, also in lieu of an export embargo,
would be to require licensing of all items for export to Libya.
A general licensing requirement could be announced as a measure
to monitor exports to Libya and to provide the Administration
with the authority to deny any item which could be used by
Libya to support its terrorist or military activities. Our
licensing decisions would consider factors such as the poten-
tial contribution of the export to Libyan adventures and the
need to avoid interference with contractual obligations of
parties in foreign countries. By explaining these in-house
criteria to our Allies, and by retaining the flexibility to
issue licenses to meet their concerns in specific cases, we
would go a long way towards minimizing further difficulties
arising from the extraterritorial effects of our actions.
However, a general licensing requirement would create an
enormous flow of license applications, and invoke the
Administration's responsibility for every export which was
authorized.
The steps outlined in B and C above would not do signifi-
cant damage to the Libyan economy. They would, however,
prevent transfer of U.S.-origin material and expertise to Libya
and their possible diversion to Libyan terrorism and subversion.
In that sense, they would be consistent with other policies
designed to end U.S. contributions to such activities. They
are presented as an alternative to a full embargo on exports to
Libya as a means to (1) protect U.S. exporters -- in general --
from facing the "reliable supplier" charge and from incurring
the broad-scale financial costs that will accrue from a full
embargo; and (2) give the U.S. greater protection against the
assumption on the part of our allies that we will inevitably be
pushed toward extraterritorial application of U.S.-export
controls, with all the adverse consequences for third countries
(primary among them, increased unemployment during recessionary
times).
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D. Diplomatic Initiatives Against Libyan Peoples'
Bureaus
In order to achieve progress toward isolation of
Libya in the world community, it is recommended that an
interagency group, such as the working group adjunct to the
Libya Task Force, be tasked with formal responsibility.
Operating under such a charter, that group (or any such
designated body) would periodically review reports of Libyan
initiatives in third countries, and if judged appropriate,
recommend to the NSC, through the Task Force, actions which
could and should be taken by the U.S. government. A sequence
of events envisioned by this recommendation would start with
an intelligence report of a Libyan initiative, such as
People's Bureau Association with known terrorists or anti-
government factions with the host government not aware of
the contact. The US, in the case of an allied or friendly
government, would share such a report and request the host
government consider the closing of the People's Bureau.
Additional pressure might be required in order to convey the
US Government desire in such a case, but obviously this must
be assessed on a case by case basis. Even in those countries
where US and local government interests have wide divergence,
the possibility of such action should be assessed. In any
event, Libyan moves into such traditional areas of strong US
interests, like the Caribbean, could be met and countered in
something approaching a systematic manner. Recent reports
of Libyan expansion into such locales as Venezuela, Saint
Lucia, Ghana, Oman, and Curaco would logically be subjected
to this interagency process. Coincidentally a country by
country review should be undertaken to further identify
potential situations which fit the criteria of this recom-
mendation.
VII. MILITARY AND SECURITY MEASURES
Military measures that might be directed against the
Libyans fall into two categories:
-- Those that are taken in response to direct Libyan
attacks against U.S. officials, installations, or
citizens.
-- Those that are taken to deal with continuing
Libyan efforts to subvert, de-stabilize, and more
directly coerce friendly regimes in the area.
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A. Responding to Direct Libyan Attacks Against the U.S.
The JCS has reviewed the seven courses of action it pre-
viously proposed for responding to this category of Libyan
actions. They have confirmed that these courses of action
are feasible; Course of Action Six (Strike Operations) is
capable of being executed within 96 hours. The JCS believes
that the range of options that have been developed are suffi-
ciently comprehensive that additional options need not be
developed. Refining the various options or courses of action
will be necessary -- especially given the possibility of
changing scenarios -- and will continue. We would address
the War Powers Resolution and other legal implications in
making a decision to carry out any of these options in light
of the circumstances at that time.
Potential Reactions to the Exercise of U.S. Military Options.
Soviet, regional, and NATO reactions to an exercise of direct
U.S. military force against Libya will in differing degrees
be influenced by the nature of the Libyan attack on U.S.
citizens or facilities. If there were little ambiguity about
the Libyan action, and the action itself was extreme (i.e.,
assassination of a high U.S. official), even the Soviets
would probably distance themselves from Libya and not come
immediately to the Libyan defense.
At the same time, the Soviets would condemn any U.S.
military response as an over-reaction and try to stir up anti-
U.S. sentiment in the region. In circumstances where the
Libyan action was less clear-cut, Soviet support of Libya
would be far more pronounced. Though being unlikely to use
their forces in such a way that a military confrontation with
the U.S. would develop, the Soviets would offer to bolster
Libyan defenses, replace and rebuild equipment and infra-
structure that U.S. strikes might destroy, and increase
their own military presence in Libya. The more forceful
our action, the more likely the Libyans would be to accept an
increased Soviet presence in the hopes that it would deter
further U.S. actions.
Among Arab states in the Middle East, the issue of provo-
cation will only be significant to the moderates. The radicals,
i.e., Syria, PDRY, etc., will attack us and offer figuratively
to come to Libya's defense, regardless of the nature of the
Libyan action. If the provocation were clear-cut, many of the
moderates would privately welcome our action and some
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(e.g., Sudan, Oman, and possibly Egypt) might publicly
support it. The Saudis and others, however, being fearful
of appearing to sanction an outside military action against
an Arab nation would not openly support our action and might
feel the need to establish some distance from us at least
for a limited period of time.
In those cases where Libyan responsibility is less clear,
or the U.S. reaction is seen to be disproportionate (e.g.,
civilian casualties), the Saudis and other Gulf moderates will
more openly condemn our action and more demonstratively dis-
tance themselves from us. Enhancing military cooperation
against the Soviets could become more problematical. More
damaging than a U.S. response to an ambiguous situation
would be an American military reaction that is perceived or
portrayed as a failure -- especially if there were U.S. losses.
This would rekindle doubts about the U.S. and its ability
to safeguard its friends in the region. It would probably
also raise the costs of association with us in the eyes of
those Arab states most willing to work with us on security
matters -- Egypt and Oman.
The responses of our NATO allies to a U.S. military action
against Libya will be strongly shaped by the character of the
Libyan action. The more clear the Libyan responsibility and
the more serious their action, and the more proportionate the
U.S. response, the more supportive our allies are likely to be.
The less clear the Libyan responsibility, the more we will see
the allies distancing themselves from our action and calling
for restraint on our part.
B. Dealing With Continuing Libyan Threats in the Region.
Differing kinds of military measures must also be
considered for dealing with continuing Libyan efforts to
threaten and destabilize regimes in the area. These
measures include:
-- providing greater assistance to local states
threatened by Libya;
-- increasing U.S. military presence in the area;
-- expanding military and intelligence cooperation
with regional governments; and
-- engaging in joint contingency planning with at
least Egypt.
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Assistance. In response to burgeoning Libyan threats, the
U.S. has already increased security assistance to local
states. More will clearly be needed as the states most
threatened by Qadhafi (Sudan, Tunisia, etc.) are highly
vulnerable and have limited military and economic means.
Decisions on increased security and economic assistance,
however, will have to be addressed in the budget cycle,
where funds remain extremely tight.
The area of economic assistance is one where our allies
could be very helpful. Rather than asking the allies to
join us in employing sanctions against Libya -- at a time
when they are reluctant to consider sanctions on Poland --
it makes far more sense to ask them to provide economic
assistance to the vulnerable regimes threatened by Qadhafi.
Because providing economic assistance to states critically
in need like Sudan may ameliorate many of the sources of
local instability, it may also appeal to the allies.
Increased Presence. An increased U.S. force presence in the
region could serve to deter overt Libyan adventurism and also
reassure local states threatened by Qadhafi. More than this,
it might put increased pressure on Qadhafi at a time when our
actions have already made him quite nervous. Though he has
not altered his policies in any fundamental way, this nervous-
ness has led him to put out feelers to us and to become more
circumspect in waging his campaign of terror. Increased
presence and/or exercises that essentially amount to shows of
force in the area (e.g., another Gulf of Sidra exercise) might
thus push him to effect some positive changes in Libyan policy.
At the same time, it should be noted that putting more pressure
on Qadhafi in this manner could allow Qadhafi to portray him-
self as standing up to U.S. pressure directed not just against
him but the "Arab nation" generally -- and this could have
some effect on the Gulf states.
Examples of such measures include:
-- A return to exercises in the Gulf of Sidra which have
been infrequent since 1979.
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-- An increase in Special Forces, Airborne, Marine, Navy
and Tacair exercises, some jointly with friendly local
states.
Expanded Cooperation. Expanded security cooperation with
local states would signal our support for them and our deter-
mination to work with them to counter the threats they confront.
One option for expanding cooperation with the states threatened
by Libya would be to establish a Regional Training Center (RTC)
in Egypt. The RTC, proposed by the Egyptians, would be a
training site built with U.S. funds and jointly used by U.S.,
Egyptian, and other friendly regional forces. Another option
for expanding cooperation would be to initiate military unit
exchanges with regional states. This would require legislative
changes since unit exchanges are currently restricted by law.
A third possibility is to expand intelligence collection and
sharing with friendly states in the region.
Contingency Planning. Contingency planning with Egypt
could be very important for dealing with major Libyan threats
to Egypt, the Sudan, and possibly also Chad. While the Mubarak
government seeks no military confrontation with Libya -- and
contingency planning for military actions against Libya may
no longer rank high on its agenda -- circumstances may change.
Certainly any direct Libyan threat to the Sudan would rekindle
the Egyptian inclination to respond militarily to the Qadhafi
menace. Putting ourselves in a position where we have developed
with the Egyptians the joint plans and capabilities for respond-
ing to these contingencies will, therefore, continue to be very
important.
All such contingency planning with Egypt should be
guided by two principles: (1) The need to improve Egypt's
combat and logistic capability to deter/counter Libya's
provocative or direct attacks without commitment of direct
U.S. combat support, e.g., tacair. (2) The importance of
further analyzing the Egyptian deficiencies in the western
military district and estimating financial and political
costs required to correct them.
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VIII. CONGRESSIONAL AND PUBLIC AFFAIRS STRATEGY.
We need a public affairs and Congressional strategy that
prepares the ground for the announcement of new measures
directed at Libya. And we need to formulate the announcement
itself so that it reflects a balanced and well-rounded approach,
rather than a set of random negative sanctions. If we fail to
build public interest and support prior to our announcement, we
may find we have inadequate thrust to sustain the takeoff of the
second phase of our Libyan policy -- a difficult predicament
from which to recover.
The principal criticisms are relatively easy to anticipate.
Some are sure to argue that we are both provocative and erratic;
others may suggest that we are merely trying to distract
attention from domestic problems, or that we are compensating
for our weakness on Poland and other hard issues by striking out
episodically against the Libyans. Moreover, we are dealing
with a public acclimatized by the media to associate foreign
policy decisions with certain specific, often dramatic, preci-
pitating events. When no such single event can be immediately
discerned, it becomes easier for critics to speculate that the
decision was driven by some hidden political agenda. This means
our immediate problem is complicated, since we are in fact
responding to a broad, continuing, and not always very visible
pattern of subversive activity. But this is an opportunity as
well as a problem. Indeed, part of the solution consists of our
using the lack of any sudden precipitating event to our
advantage, showing that we have a strategy rather than a
Pavlovian response to random incidents. At the same time, it
is essential to be as concrete as possible in focusing prior to
our announcement on behavior that alarms us -- particularly on
provocations that are themselves representative of the broader
Libyan program of regional stabilization.
In the public's mind, our initial measures were linked
-- unintentionally and, in many ways unhelpfully -- to the
assassination-terrorist dimension of the Libyan threat. As a
result, the broader strategic problem that Libya poses has not
as yet been fully absorb0. To correct this, we should -- in
advance consultations with the Congress, and through an increase
in the tempo and specificity of Administration statements -- begin
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to direct attention to recent Libyan threats against Oman, to
provocative Libyan broadcasts into Egypt, and to Libyan
subversive activity in Sudan. These statements should have an
admonitory and stage-setting character. They provide the
occasion for driving home our broader arguments: namely that
threats to Sudan reverberate in Egypt; that Libyan threats
against Somalia and Oman are designed to undermine those
states willing to help us protect vital resources; that
Libyan activity in Yemen places a sharp dagger in the side
of our Saudi friends; and that Libyan arms to the PLO in
Lebanon destabilize the country, threaten Israel, and upset
the prospects for peace, and that Libya is active in Central
America. The point here is to show that Libyan activity
conforms to a certain pattern and has a strategic coherence.
Of course one of the best ways to remind others that we
face a broad problem is to focus attention on the breadth and
continuity of our response. This means assuring that the
announcement of new measures includes reference to the security
and developmental assistance we are already giving. Such a
reference would highlight the positive overtones of our policy
deterrence and the effort to reduce the internal discontent
upon which subversion feeds. Additionally, to reinforce the
dualism between "peace and security" we should draw attention
to our support to peacekeeping efforts in Chad, and perhaps
consider ways to bolster that support simultaneously with the
enactment of new punitive measures. These themes should be
given sufficient prominence in the President's announcement
that they become difficult for critics to discount or ignore.
In preparing for the announcement of the initial decisions
on Libya, we were constrained -- because of time and the fear of
leaks that could cause harm to American citizens in Libya --
from engaging in a serious dialogue with the Congress prior to
action. This time we should think of two distinct phases of
consultation.
The first phase would be educational and designed to
give key members a sense of involvement in our decision
process and -- thereby -- a stake in the outcome. Here we
would share as much intelligence data as possible; discuss
the threat our friends in the region feel; show how Libyan
success in various places will complicate our strategic
position; and indicate the decisions that the President is
leaning toward taking.
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The second phase would, then, consist of standard, cour-
tesy calls a day or so before the actual announcement of new
measures. The second phase is essential, but cannot substitute
for the more consensus producing consultations described in
phase one.
IX. TIMING.
Except for the Gulf of Sidra exercise, the military
measures described above are all either in various stages of
implementation or are planned on a contingency basis. Crucial
decisions will have to be made regarding the timing of the
economic steps. The oil embargo and export controls, if
decided upon, could be implemented simultaneously for maximum
impact and to demonstrate that the U.S. is ending "business as
usual" with Libya. The same can be said if transaction controls
are added to this list. Alternatively, we may want to implement
a phased program: oil embargo now, export embargo later,
transaction controls still later. There are two arguments in
favor of this approach. First, the economic sanctions most
painful to the allies (because of their fears of extraterritorial
application) and to U.S. business would be delayed until the
initial impact of the sanctions undertaken to deal with the
Polish crisis have passed. Second, if there is a possibility
that Qadhafi will reduce his support for terrorism in response
to U.S. pressure, there is an advantage in steadily increasing
the pressure and in holding some measures in reserve.
The issue of timing also arises with respect to implemen-
tation of whatever decisions on next steps toward Libya are
taken at this NSC meeting. As argued in the section on Con-
gressional and Public Affairs strategy above, we may want to
delay implementation for a period of time (30 days, for example)
in order to build support among a public currently relieved by
the diminished assassination threat against U.S. leaders and
distracted in its attention by events in Poland.
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ECONOMIC AND SECURITY POLICY TOWARD LIBYA
SUMMARY DECISION SHEET
Option
1. Implement Unilateral US Oil
Embargo
a. Immediately (NSDD 4a)
b. Implementation Delayed
While Building Public
Support
2. Implement Tightened Export
Controls Against Libya
(Prohibiting Export of
Dual Use Items; Instituting
Licensing Requirements).
3. Implement Full Embargo of
US Exports to Libya (NSDD 4b)
a. With extraterritorial
enforcement
b. Without extraterritorial
enforcement
c. With extraterritorial
application only to
oil and gas technology.
4. Mandatory Withdrawal of
Americans
a. Unnecessary
b. Combine with other IEEPA-
mandated Restrictions (Oil
Embargo and/or Embargo of
US Exports)
5. Implement Transaction Controls
on US Firms Doing Business in
Libya
Approve Disapprove
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6. Timing of Economic Measures
a. Simultaneous
b. Phased
7. Enhanced US Security Assistance
8. Enhanced US Economic Assistance
9. Increased US Military Presence
a. Special Forces, Airborne,
Marine, Navy and Tacair
Exercises, some Jointly with
Friendly States
b. Exercises in the Gulf'of Sidra
1. Resume as soon as possible
2. Delay so as not simul-
taneous with Economic
Measures
10. Expanded Security Cooperation
with Local States (e.g., Regional
Training Center in Egypt)
11. Contingency Planning with
Egypt and Others to Respond
to Libyan Threat
12. Validation of JCS Options
for Responding to a
Libyan Provocation Against
US Targets (NSDD Item 5)
13. Diplomatic Initiatives Against
Libyan Peoples' Bureaus in
Other Countries
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TAB A
Implementation of December 10 Steps
On December 10, the President directed that three steps
be taken immediately to reduce the threat that Libya poses to
U.S. security (Items 1-3 of NSDD 16). These steps have been
implemented and there has been good progress in securing the
withdrawal of American citizens from Libya. They include:
1. Demarche to Libya: A demarche was delivered to the
Libyans on December 10 by the Belgian Ambassador, warning
against plotting of terrorist actions against U.S. citizens or
facilities. The Libyans firmly rejected our accusations. While
we are unable to assess the impact of the demarche on Qadhafi,
the CIA believes that it along with other actions may have
caused Libya to suspend its activities, at least against U.S.
personnel. There is no indication, however, that such a suspen-
sion is anything more than a tactical maneuver, or that Qadhafi
would fail to resume such methods later.
2. Request for Withdrawal: The President requested on
December 10 that U.S. corporations operating in Libya facil-
itate the rapid withdrawal of their American employees. Most of
the companies have moved rapidly to comply with this request.
As of January 21, about 400 U.S. employees/dependents remained
in Libya of the approximately 1200 who were there on December 10,
and by early February, we expect this number to drop to less than
100. In addition, there were another estimated 300 American
citizens in Libya on December 10, primarily U.S. citizen spouses
of Libyans and Americans working directly for the Libyan Govern-
ment (e.g., technicians, professors, etc.) While their numbers
have declined since then, we do not know by how much. A small
number of workers (perhaps two dozen) who refused to leave are
being terminated by their U.S. employers and will work for the
Libyan National Oil Company or other Libyan enterprises.
3. Invalidation of Travel: Effective December 11, the
State Department invalidated U.S. passports for travel to Libya.
Most Americans intending to travel to Libya have complied with
this order, although some individuals are entering Libya without
their passports. A number of special validation requests have
been granted, for journalists, spouses, and individuals desig-
nated by their companies to coordinate the withdrawal effort.
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