US POLICY TOWARD LIBYA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84B00049R000400890005-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 46
• Document Creation Date: December 20, 2016
• Document Release Date: January 8, 2008
• Sequence Number: 5
• Publication Date: November 25, 1981
• Content Type: REPORT

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US Policy Toward Libya
This paper integrates the work of numerous papers prepared
by an interagency group over the course of the last month. It
examines the current status of Libyan activities, US security
policy options for dealinc with those Libyan policies, and US
economic policy options. At tabs are a detailed discussion of
steps that have been taken by this Administration in its Libya
policy to date (Tab A); a public affairs program consistent with
the options presented earlier (Tab B); a proposed chronology of
consultations and public statements (Tab C), and a discussion of
the legal ramifications of Option 2 (Tab D).
As the reader moves through this paper, there will be
several options. In order that the decisions made throughout
the paper are mutually consistent and supportive (e.g., a vigor-
ous security effort may be inconsistent with a status quo eco-
nomic policy), a summary decision chart is presented at the con-
clusion of the paper.
Recent Libyan Activity
The National Security Council reviewed US policy toward
Libya last in June. Since then, there have been changes in
Libya's policies. Some changes appear to be laroely tactical,
others exacerbate previous trends in Libyan policy. The
general thrust of Libyan policy remains essentially unchanged,
but their activities have increased. Among the recent events
are:
o Three Power Pact: Libya entered into an alliance with
the PDRY and Ethiopia in August with the goal of overthrowing
the governments of Egypt, Sudan, and Somalia. A second goal is
the unification of North and South Yemen, ultimately to bring
pressure to bear on Saudi Arabia. Sudan has since reported
stepped-up subversion, including aerial bombings and infiltra-
tion. The Somali Salvation Front, headquartered in Ethiopia,
has been substantially strengthened by recent large Libyan
financial contributions. The training of Ethiopian troops in
Libya may also mean a more orchestrated regional threat from
Soviet client states. The pact requires very careful attention,
although to date the most troublesome parts of the agreement
have not yet materialized.
o Assassinations: Although the Libyans do not appear to
have been directly involved in the assassination of Anwar Sadat,
Qadhafi has indirectly called for a similar fate for Mubarak
NSC review completed - unredacted segments may be declassified
State Dept. review completed
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and Nimieri. Libyan attempts to organize assassinations of both
men have been reported. Qadhafi has apparently also ordered the
assassination of American officials, from US diplomats in Europe
to high level US officials traveling abroad.
o Western Sahara: Libya backed the call for a referendum in
the Western Sahara and appeared to be seeking a rapproachement
with Morocco. There is evidence that Libya reduced supplies to
the Polisario. Morocco believes, however, that the Libyans were
behind the recent resumption of fighting and the introduction of
major weapons (SA-6s, armored vehicles).
o Chad: Libya is in the process of withdrawing its troops
from Chad. Whether the withdrawal involves Libyan forces
throughout the country, or is only a pull-back to the Aouzo cor-
ridor, where Libya has had a military presence since the early
1970s, is unclear. Libya was in many ways forced into the with-
drawal by French support of President Goukouni, who called for
the Libyans to leave. Had they not, and had they blocked the
creation of an OAU peacekeeping force, the OAU summit in Tripoli
next June would have been boycotted by many nations and Qadhafi's
election to the OAU presidency clouded. The Libyan withdrawal
is being done in a way that, according to the French, "takes
everything with them" to create disorder in their wake. There
are also reports that the Libyans are transferring some of their
equipment to their client Acyl Achmet. If true, such arms
transfers would considerably enhance the prospects of their prime
supporter in subsequent Chadian power struggles.
US Objectives
In the broadest sense, US objectives are: to end Libyan
support for international terrorism, to inhibit Libya from under-
mining friendly governments in Africa and the Middle East, and
to influence Libya to stop assassination efforts against US of-
ficials and Libyan nationals in third countries.
In furtherance of these broad generalized objectives we
have sought to get the Libyans out of Chad, to limit access to
military equipment and other items which serve military or ter-
rorist purposes, and to strengthen countries in the region to
deal with the Libyan threat.
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Political and Economic Measures
There is no clear-cut division between the political, eco-
nomic, and military measures available to deal with Qadhafi.
Steps already taken to increase military assistance to threatened
regional friends indicate a political resolve on our part and
carry a political message to Qadhafi, in addition to the practi-
cal effect that they have in increasing the capabilities of the
states involved. We are examining further political steps such
as organizing opposition to the OAU summit in Libya, the estab-
lishment of Radio Free Libya, further controls on travel by
Libyans, travel by US citizens to Libya, etc. We are offering
logistical and financial support to the OAU Peacekeeping Force
for Chad. If Libyan withdrawal from Chad is incomplete, we will
examine further steps in Chad.
At issue here is whether economic measures should be con-
sidered for the political message that they, too, can convey.
Economic sanctions by one country generally have been ineffec-
tive in changing the behavior of the target country. Neverthe-
less, economic measures do convey a political signal. They also
tend to involve less risk of escalation, reprisal, and irreversi-
bility.
The basic facts that recommend serious consideration of the
use of economic measures to send a strong signal to Qadhafi are:
o Our efforts to convince other nations to restrict
military relevant commercial transactions with
Libya have met with mixed success, because of the
importance of the Libyan market for their defense
industries and perhaps because of our own con-
tinued dealings with Libya.
o In 1980 the United States purchased 40% of Libya's
oil exports, paying Libya $10 billion in annual
revenues. At t e current rate, US oil imports from
Libya would run about $2.6 billion a year based on
sales of Auqust-October 1981. Libya's total annual
sales at this rate would be $9.2 billion. Under
current oil market conditions, Libyan oil revenues
have declined considerably; this has put Libya in
a tight cash-flow position for the near-term and
led it to borrow in international capital markets.
Libya still has reserves totalling $16 billion.
o Libya uses its oil revenue for campaigns of ter-
rorism, including assassination plots against
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our own public officials, subversion of its
neighbors, and external aggression.
o Libya also uses its oil revenue to purchase vast
quantities of advanced Soviet weapons with de-
liveries runnina $1 billion in 1981 and estimated
at $2.3 billion this year. Libya is the largest
recipient of Soviet weapons and accounts for one
fifth of Soviet arms exports to the Third World.
o We cannot discount the possibility that the ex-
cessive quantitites of Soviet armaments deployed
in Libya are "pre-positioned" there to serve
future Soviet purposes directed against western
interests in the Mediterranean, the Persian Gulf,
and in Africa.
o This places the United States in the embarrassing
position of indirectly funding a substantial ar-
ray of Libyan (and potentially Soviet) activity
that is directly anti-thetical to our national
interest and to the interests of the industrial
democracies, more generally.
By enacting an oil embargo or broader economic measures
directed aqainst Libya, the United States would be able to make
a powerful statement -- to Qadhafi, to regional friends, and to
the rest of the world -- that we would not conduct "business as
usual" with an international outlaw.
There is disagreement as to whether economic steps by the
US would affect Qadhafi's behavior. The two positions are:
o The necessary impact would have to be on Qadhafi's capa-
bilities, rather than on his intentions. We have less economic
eve eraae over Libya now than we did in 1980 -- when we took 40%
of Libyan exports and paid them $10 billion -- and it is highly
unlikely that this pattern will be repeated in the near-term.
To affect his capabilities, however, an economic boycott would
have to have the cooperation of our allies to have a sufficient
impact. Because they differ with us on the advisability of using
economic sanctions, the cooperation of our allies in this matter
is not likely to be forthcoming. Even if it were, Qadhafi would
always be able to find other customers for his oil, merely by
manipulating its price, and the Soviets and Eastern Bloc coun-
tries would be only too willing to come to his aid, for mutual
benefit.
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o Unilateral US economic action, in the service of our
political objectives, could be effective in altering Libyan be-
havior by demonstrating to regional states, the Soviets, Libyans,
and our own people the seriousness with which we view Libya's
lawless and aggressive behavior. This action would be viewed
in the context of the other measures we have taken to isolate
Qadhafi and to call attention to the danger to international
order posed by Qadhafi's support of terrorism and other aggres-
sive actions. The willingness of the United States to put
foreign policy goals ahead of its commercial interests would
dramatize the threat we believe Qadhafi poses. It would also
demonstrate US leadership and determination in meeting it. Not
until we deny our own monies to Qadhafi's fund for terrorism and
arms will we be free of charges of hypocrisy. Then we can begin
to serve as a model for other states that we are asking to incur
financial loss by limiting interaction with Libya -- particularly
in the nuclear and arms supply areas. Thus, while the US action
would be unilateral, it would exert a certain moral suasion upon
our allies.
Economic effects of US actions would vary with time and
with the state of world oil markets. Over the near-term, the
impact of unilateral US actions would (for the reasons noted
above) be minimal. However, over the medium-term, the withdrawal
of US personnel in particular could impose some dislocations in
Libyan oil production and the Libyan economy. These medium-term
effects referred to above would have the particular advantage,
from our point of view, of putting a crimp in Qadhafi's ability
to support subversion of his neighbors, just at the time when
these efforts seem to have been gaining in momentum. Such prob-
lems would not likely be lasting, as Libya restructured its
market for oil and its source of technology over the long-term.
Additional arguments against economic sanctions include:
o The Administration would be asking one part of
the private sector to bear the costs of sending
foreign policy "signals". Taking such steps
may be intrepreted as being contrary to Admini-
stration economic policies.
o Possible consequences of economic sanctions would
be confiscation of US-owned assets, some insur-
ance claims against OPIC, and court suits.
o Sanctions tend to persist long past their limited
usefulness because reversing them would convey
the wrong political message.
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Economic Options
The economic options are intended to be carried out in a
phased program. Option 1 can be put into effect immediately,
while the subsequent ones will be implemented at the appropri-
ate times, for example, at 30-60 day intervals. Timina will be
dependent in particular on the need to allow sufficient time for
the OAU-sponsored Peacekeeping Operation (PKO) to be put in place
in Chad. Timing may also be affected by other, unforeseen cir-
cumstances, such as Libyan provocations that may occur. Consul-
tations with our allies on our plans for dealinq with the Libyan
threat would begin immediately.
There may be legal difficulties in implementing each of the
following options.
Option 1: Pressure on Producing and Oil Buying Companies
We should encourage the US oil companies in Libya voluntar-
ily to dispose of their equity in Libyan production as Exxon is
now doing. This would have the advantage, if several or most US
companies complied, of getting more and more of our people out
of Libya, and reducing the "hostaqe" threat. Libya would lose
the benefit of the technical skills, though they could be re-
placed. In any case, the political message and demonstration ef-
fect of voluntary action by US companies would be positive. The
likelihood that companies would comply is difficult to gauge.
At the same time, we should ask US companies which purchase
Libyan oil to shift to other suppliers such as Nigeria, advising
US oil companies that the US government will no longer accept
Libyan crude for the SPR. Informal USG efforts of this type
would add to the pressures which have already reduced purchases
of Libyan crude; once these companies have signed contracts with
other suppliers, Libya will have difficulty winning them back.
Encouraging shifts to other suppliers could further reduce
Libya's exports; it would not provide a clear target for Libyan
retaliation against US personnel and assets nor a clear provoca-
tion engendering sympathy for Qadhafi, and it would offer some
possibility of obtaining cooperation from foreign oil companies
without straining relations with our allies. Company cooperation
is uncertain, of course, and a reduction in Libyan prices or some
tightenina of the oil market would discourage compliance. There
is a significant difference between this option and the forthcom-
ing ones.
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Option 2: Withdraw US Business Personnel from Libya
There are no simple and dependable means of ensuring the
withdrawal of all US business personnel from Libya.
This option includes several legal steps designed to bring
about the withdrawal of US business personnel. These steps
might be taken individually or in conjunction with other options
discussed in this paper. Several of those options involve novel
uses of statutory and regulatory authorities. Their implementa-
tion would require further legal and factual analysis by the
agencies concerned. The options are described at Tab D. They
include:
o Impose administrative and/or criminal penalties on
persons employed by United African Airlines,
o Impose restrictions on use of US passports for
travel to Libya, and
o Seek to compel or promote the withdrawal of US
business personnel from Libya as a prerequisite to
additional economic measures under IEEPA or the Ex-
port Administration Act.
Consequences of Regulatory Action. The oil companies have
received repeated appeals from State Department officials to
withdraw their personnel from Libya. Yet another, higher level
appeal would precede any legal declaration or action under the
Export Administration Act by several weeks to permit further
"quiet withdrawal." Exxon is now withdrawing totally, Mobil is
reported to be taking similar action, but the other companies
have not yet followed suit. Only 71 of Exxon's 1920 person
work force are US citizens, however, and most of the 429 other
foreign workers and the 1400 Libyans will remain behind. One
company, Occidental, is very unlikely to withdraw personnel
unless required to by some US Government mandatory action.
Some oil companies still operatina in Libya may prefer ex-
plicit US Government regulatory action limiting their opera-
tions as opposed to unofficial pressure for a "voluntary with-
drawal." Such official action would place them in a better
position with their stockholders and insurers, and would facili-
tate later re-entry into Libya. On the negative side, however,
Libya may respond to official US action by harrassing those who
wish to leave; nationalizing US oil company assets there; or by
other negative actions aimed specifically at the United States.
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Although we cannot rule out the possibility that US action
to reduce the presence of US employees alone would create a
hostage situation, it is much more likely that Qadhafi will not
take the sort of action that would scare off other westerners
and threaten him with US military action. In any case, we should
give prior warning and explanation of US action regarding our
citizens to selected allies and friends.
The oil companies have an investment in Libya with an esti-
mated replacement value of $2.5 billion. Current book value is
substantially lower, possibly less than $200 million. (National-
ized assets can be written off against taxes by the companies at
a rate of 46%.) Furthermore, the companies would likely be fore-
going substantial future earnings if forced to leave Libya. We
could come under pressure from the companies and the Congress to
obtain compensation from Libya for any nationalized property at
its fair market value.
The most prominent arguments in favor of this step are that
it would prepare the way for stronger measures -- both economic
and military -- if we should decide to undertake them at a later
date and it would substantially reduce the potential hostage
problem. We should accept for planning purposes that it will
probably not be possible to eliminate all potential hostages.
Option 3: A Unilateral US Oil Embargo
An oil embargo could be accomplished through the applica-
tion of Section 232(b) of the Trade Expansion Act of 1962, as
amended, on the ground that US dependence on Libyan oil consti-
tutes a circumstance that threatens to impair national security.
Alternatively, IEEPA could be used, but because of its broad
scope, this would raise serious concerns among our allies and
other oil producers.
The advantages of imposing a unilateral oil embargo are
that: it would be an action totally within our control; it
would make a strong political statement that would receive wide
publicity; we would not have to expend precious capital and risk
straining the western alliance by trying to achieve allied co-
operation. This time of relatively weak oil markets may be
especially appropriate for US companies to switch suppliers.
Disadvantages are that: such action would undermine the
credibility of the position we have taken with oil producers
that oil should not be used as an instrument of foreign policy;
Qadhafi could exploit the economic ineffectiveness of a US-only
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oil embargo for his own propaganda purposes (e.g., he might at-
tempt to characterize the US as impotent, although we could re-
duce his ability to do so by emphasizing that the purpose of our
embargo is to disassociate the US from Libyan activities, not
necessarily to injure the Libyan economy); one portion of the
US economy would feel itself bearing an undue share of the
cost of supporting our policy against Libya; a US-Libyan "con-
frontation" of this sort may redound to Qadhafi's advantaoe by
drawing further attention to him; and US action against Libya
may move Qadhafi even closer to the Soviets. Most of our Allies
might deride the US for hurting itself economically without
making much of an impact on Libya, and would fill the economic
void themselves.
From a policy standpoint, the Trade Expansion Act would
clearly be the preferable legal basis for an oil import ban. The
alternative of invoking IEEPA raises the spectre of a broader em-
bargo extending to US subsidiaries overseas, and would unneces-
sarily concern allied governments and investors. IEEPA would
make sense as a basis for restricting Libyan oil imports only as
part of an overall prohibition of transactions with Libya.
Following Options 1 and 2, this action can be conceived as
one in a series of graduated steps against Qadhafi.
Option 4: An Embargo of US Exports on Foreign Policy
Grounds
The US would, under the foreign policy provisions of the
Export Administration Act, prohibit to the maximum extent allowed
by the Act, US exports to Libya. Most US direct sales to Libya
are of machinery and transportation equipment about half of which
is related to oil production. Though this option would not damage
Libya to any great extent, US exports to Libya run about $500
million a year and it would be a symbol of our willingness to cut
all ties.
The commercial cost to the US may be greater than the $500
million a year in exports foregone. Other countries might per-
ceive the US as an unreliable supplier of goods and services and
may shift to more reliable European and Japanese suppliers, as
they have tended to do following our imposition of controls on
sales to Iraq and Syria.
The political cost lies in our practice of limiting re-
export by Europeans (and others) of goods or components of US
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origin. Europeans resent what they see as extraterritorial in-
trusion in their commercial transactions. We could expect lit-
tle Allied support. At the beginning, to avoid creating a US/
European problem, we would have to avoid enforcing controls on
third countries, though in time we could not avoid this.
Military and Security Measures
Options 5 and 6 below consider additional funding for as-
sistance to regional states. No decisions on those options are
required now. A decision document on assistance enhancement is
being prepared separately.
Option 5: Enhanced US Security Assistance
Although US security assistance to regional states is al-
ready higher in real growth than it was in FY 81, the recent
attention to the Libyan threat has led almost every regional
state which participates in US security assistance to design
necessary programs which greatly exceed planned funds in FY 82
and FY 83. Egypt has virtually committed all of its FY 82 FMS
financing. We will be unable to expand or accelerate deliveries
after June without additional funds or guaranty authority. The
Sudan's follow-on air defense procurements (F-5s, ground based
weapons) will have to be stretched out unless more financing is
allocated. Morocco is unable to replace its combat losses and
is having difficulty fundina the US loan of equipment to counter
the SA-6s. A similar pattern exists throughout the region.
To increase funding we could re-open or amend the FY 83
assistance budget for this area. Although some direct credit
(repayment of which could be forgiven) might be necessary, most
additional financing would be FMS guaranties and would not in-
crease the FY 82 or FY 83 budgets. The arguments against such
a step are a) that it will raise the hopes of the regional
states, only to have them dashed when Conaress refuses the
requested program levels, b) that other areas, such as the
Caribbean, are equally in need, c) that security would be more
greatly enhanced by non-equipment intensive solutions such as
IMET training in anti-subversion tactics, ESF and development
assistance.
Option 6: Increased Economic Assistance
Given the size of Libya's population, despite even the most
bristling of military arsenals, Qadhafi can never expect to oc-
cupy a country for an extended period against its will, e.a.,
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Chad. He must then feed on subversion and/or ally with contend-
ing power factions. His ability to affect events in many of the
countries is directly proportional to their stability -- politi-
cal, economic, or religious. To the extent that we do not suc-
ceed in unseating Qadhafi quickly and must contend with him for
another five or ten years, we must consider efforts to support
longer-term stability in neighboring countries passing through
the inherently destabilizing modernization process. Providing
increased economic assistance (ESF, PL-480, development assist-
ance, Exim loans, etc.) offers a clear way to support economic
stability and limit the base for subversion and revolution in
strateaic countries like Sudan and Egypt and other neighboring
states like Chad and Niger. It mobilizes popular support for
pro-Western governments and provides a population base with a
stake in defending the country and opposing Qadhafi. Economic
assistance is also an area in which we may find our allies more
amenable to our anti-Libyan policies, and more willing to assist/
support us.
Option 7: Increased US Military Presence
In August the US Navy returned to the Gulf of Sidra in an
exercise that gained worldwide attention. Now the US is engaged
in the largest military exercise it has ever conducted in the
Middle East, Bright Star 82. Three issues that have been raised
in this review are: Should we continue this pace of operations?
Should we shift the focus to nations most directly threatened by
Libya? Should we increase the pace of exercises by decreasing
our reliance upon major movements of equipment?
US military presence in the area may be reassuring to
governments that feel threatened by Libya. It may also deter
further Libyan adventurism by implying that the US will use its
own forces in reaction to Libyan aggression. Conversely, a large
US military presence in the region might be destabilizing. It
might provide Libya withhaa propaganda target, allowing them to
charae that the US is bent on military domination of the area,
permitting them to whip up nationalist feelings by charging that
the regional states are US puppets. Moreover, there is no clear
evidence that US force presence has to date deterred Libya from
terrorism and subversion. It could increase the chances of Libya
granting the Soviet military access.
Three sub-options for increased US presence are:
o A Return to the Gulf of Sidra: We previously exercised
in Sidra twice a year because of its unique location for MIS-
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SILEXs, but another exercise might again provoke Libya to re-
spond. This would require careful evaluation to determine the
possibile need for consultation and reporting under the War
Powers Resolution.
o Marine/SF/Airborne Exercises: Since Bright Star involves
heavy units, it requires long-lead planning and heavy lift re-
quirements. A stepped up pace of exercises with light units
could increase the visibility of US military forces and demon-
strate our resolve while at the same time reducing deployment
costs. A Marine landing and a Special Forces exercise are
already scheduled in 1982 for Tunisia. Additional exercises,
such as landings and fly-overs, could demonstrate support for two
"target states", Sudan and Somalia. Using host nation weapons
to reduce lift is under consideration, but that could imply that
the US will replace the host nations in combat and could feed
propaganda about US intentions.
o Sudan Airfield: Al Fashir and Zalingei airfields are cur-
rently capable of suportina only limited C-130 operations. A plan
to use US military engineers to improve Zalinqei was proposed too
late to be factored into Bright Star 82. US forces could return
to the Sudan to build a C-130 field at either of these locations
at an estimated cost of $13 and $24 million respectively. Using
combat engineers in the context of the JCS exercise program would
require that the activity be capable of being characterized as a
DOD activity rather than as security assistance. (Note: Any up-
grade of an airfield in Western Sudan would be useful in supply-
ing Habre should the Libyans return in force and we wish to urge
him to resume a combat role.)
Option 8: Increase Support of Regional Forces
Egypt has proposed a Regional Training Center in Egypt to
train friendly regional states (Sudan, Somalia, Tunisia,
Morocco) as well as US units. Another step to increase support
of regional states would be stepped up US overhead reconnais-
sance, mapping, and sharing with regional forces. Finally,
Defense has proposed a change in legislation that would permit
greater unit exchanges with non-NATO states.
o Regional Training Center: The center would be in Egypt
and the US would preposition major equipment items for traininq
of its own forces (M-60, M-113, M109). Funding and othe details
would be determined by a DOD survey team that Egypt has re-
quested. Depending on degree of sophistication desired, total
project could possibly go as high as $100 million.
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o Intelligence: Stepped u, collection is proposed, includ-
ing SR-71/U-2 flights, the creation of operations maps, and the
sharing of the maps and Libyan troop disposition information
with regional militaries. There would be increased cost to fly
the missions and to make the maps. Current cost for a 5 hour
mission is approximately
o Unit Exchanges: Legislation restricts the extent to
which we can engage in unit exchanges with non-NATO states. DOD
proposes that we seek legislation that would permit greater ex-
changes and that we should then proceed with small unit exchanges
with army, navy, and air force units from regional states. Costs
for such a program are minimal, limited primarily to transporta-
tion.
Option 9: Contingency Use of US Forces
DOD has discussed the use of US forces to assist in the
defense of regional states from overt attack, in collective de-
fense operations with regional states, or unilaterally. (Uni-
lateral US action might come in response to a Libyan terrorist
attack.) There are issues involving defensive planninc.
o Assisting in Defense: We propose that DOD expand its
contingency planning effort with Egypt and initiate planning with
Sudan for defense of Sudan against a direct Libyan attack. Plan-
ninq for US activity would be limited to combat service suport of
Egyptian/Sudanese combat operations in Sudan and Chad only. To
carry out this policy, in addition to building a western Sudan
airfield, further discussions need to take place with the Egyptian
and Sudanese, in order to plan for the lift of both of their
Quick Reaction Forces. We will also need to train the Egyptian
fighters to operate with US aerial refueling tankers.
We do not decide in advance what specific actions we would
take in a given contingency and detailed contingency planning is
a military prerogative, but we do need to analyze possible re-
sponses for contingency purposes. Given that requirement, the
JCS need to know whether their assumptions about the US role in
a Sudan-Libya crisis are correct. They have proposed confining
the conflict to the Sudan and Chad and not involving US combat
personnel. This policy minimizes the likelihood of the conflict
escalating into a superpower confrontation or a regional war. It
also provides Libya with a sanctuary and places a large burden on
the under.-equipped Egyptian Air Force. An alternative would be
to have the JCS plan for the introduction of ground-based air de-
fense and close air support forces into Sudan in the event of a
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major Libyan attack. (Continqency plans already exist for US
bombing of Libyan high value targets.)
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Economic and Security Policy Toward Libya
Summary Decision Sheet
Option Approve Disapprove
1. Pressure on Producing and Oil Buying Companies
2. Withdraw US Business Personnel
3. Unilateral US Oil Embargo
4. An Embargo of US Exports on Foreign Policy
Grounds
5. Enhanced US Security Assistance
(Decision in principle only)
6. Enhanced US Economic Assistance
(Decision in principle only)
7. Increased US Military Presence
a) Gulf of Sidra Exercise before next August
b) Additional Non-Equipment Intensive Exercises
(Sudan, Somalia)
c) Airfield Construction W. Sudan by US Mili-
tary
8. Increased Support of Regional Forces
a) Regional Training Center: Begin Consulta-
tions, Survey
b) Greater Intelligence Collection and Sharing
c) Increased Unit Exchanges, Legislative Change
9. Contingency Use of US Forces
a) Contingency Plans for US air defense and
tacair to oppose overt Libyan attack on Sudan
b) More detailed discussions with Egypt and
Sudan on airlifting/supporting their QRF;
training Egyptians with US KC-135s
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FOLLOW-UP ON EARLIER DECISIONS
On June 4, the President made the decision to implement
a number of actions regarding Libya. Action is underway and
continuing on all of them,. as follows:
1. Assistance to Threatened States: We are providing
military assistance and demonstrations of support to key
countries threatened by Libya:
-- Egypt: Egypt is Qadhafi's biggest target. Bright
Star 82 is a strong message to Qadhafi of American support
for Egypt. Continuing high level military and economic
assistance to Egypt is the single most important counter-
balance to Qadhafi in the region.
-- Sudan: Qadhafi has attempted to overthrow President
Nimieri. The Tripartite Agreement with Ethiopia and PDRY
supports this goal. Expedited deliveries to Sudan of U.S.
weapons and $200 million in economic and military assistance
for this year are an important American response.
--Tunisia: We have increased FMS from $15 million to
$95 million and hope to go to $140 million for FY 83. We
have formed a joint military commission with Tunisia, and
will provide the weaponry and training needed to offset Libyan
adventurism such as the Gafsa incident of 1980.
-- Morocco: We plan to increase FMS for Morocco from
$30 million in FY 82 to $100 million in FY 83. We are pro-
viding Morocco with assistance to counter Polisario utilized
SAM-6 missiles provided to the Polisario by Libya.
-- Niger: In response to Qadhafi's threats to Niger, we
reprogrammed $3.2 million in FY 81 FMS and have allocated
$5 million for FY 83.
-- Somalia: In response to the Tripartite Agreement
threat to Somalia, we have continued FMS credits and included
Somalia in the Bright Star 82 exercise.
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-2-
2. Approaches to Military Suppliers: We have approached
European and other states to seek a cut-off or reduction of
military sales/training cooperation with Libya. The reaction
to this approach has not yet been satisfactory. The French
have promised to delay some shipments in the pipeline and not
to sign new contracts with Libya so long as Qadhafi remains in
Chad. Despite the past close ties with Libya, Turkey is con-
sidering a program to reduce military sales to Libya and train-
ing of Libyans. Some others, while expressing general agreement
with our concerns over Libyan behavior, nonetheless explained
that they intend to continue sales, including lethal weaponry,
because such sales give the Libyans an option to total
dependence on the USSR.
3. Denial of Civil Aircraft and Parts: We have had more
success in denying or hindering Libyan acquisition of U.S. air-
craft and have restricted the sale to Libya of certain aircraft
spare parts which were available previously under general license.
This effort has been met with some understanding and cooperation
from other countries and is making Libyan efforts to intervene
in other African states much more costly and complicated. How-
ever, the British have strongly protested the extra-territorial
aspects of our controls.
4. Preventing Libyan Acquisition of Nuclear Explosives:
We have no bilateral nuclear cooperation with Libya and have
had some success in limiting such cooperation on the part of
our allies. We believe Qadhafi remains dedicated to acquiring
nuclear explosives, and we are concerned at some indications
we have seen of possible Libyan progress toward this goal.
We have made a strong demarche to the Soviets and have spoken
with others about our concerns over recent developments. A
Subcommittee of the IG has been formed and has prepared a joint
draft plan for further U.S. action.
5. Foreign Consultations: We have had extensive contacts
with foreign governments about Libya. Discussions, both in
Washington and abroad have been held with virtually every
Western European government and with many African, Middle
Eastern and other countries. These discussions have included:
(a) Briefings of African states on Libyan subversion (which
has led to greater awareness in Africa and to protective steps
by some of the threatened states. (b) Effective allied and
African cooperation on Chad which has led to the beginnings
of Libyan withdrawal and the prospect of a major setback to
Qadhafi.
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(c) Successful campaign to date to limit Qadhafi's being
able to visit European and some African states, denying
him some of the prestige he desperately wants.
We believe that we have been successful in disseminating
to others our Libya policy, but acknowledge that there is
disagreement among the Europeans and others about what measures
should be taken to deal with Libya. The Europeans have a
greater stake in commercial ties with Libya, either because
of a greater dependence on oil or because of more substantial
exports, and some see our policy toward Libya as likely to
result in closer Libyan dependence on the Soviet Union.
6. Media Campaign: Libya has received extensive media
coverage in recent months. Some of this has been stimulated
by our Congressional testimony and by ICA/VOA coverage. Much
of it has come from growing public and media interest in and
concern over Qadhafi's aggressive policies.
7. Naval Maneuvers: On August 18-19 the Sixth Fleet
conducted exercises in the South Central Mediterranean, in-
cluding the Gulf of Sidra which Libya illegally claims as
internal waters. On August 19, two Libyan jets attacked and
were subsequently downed by two U.S. aircraft in international
airspace.
8. E & E: We are in frequent touch with U.S. companies
which have American citizen employeess in Libya. The Belgians
continue to be prepared to represent our interests in Tripoli,
and the Libyan Government appears to remain interested in seeing
the establishment of such an arrangement. Some DOD planning
has been done for a military action to rescue U.S. citizen
hostages.
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A PUBLIC AFFAIRS STRATEGY FOR ACTIONS AGAINST LIBYA
An effective public affairs strategy for gaining support
for whatever measures we decide to take against Qadhafi would
have to (1) dramatize the message of the danger we feel Libya
poses to U.S. interests and to international order; (2) anti-
cipate fears and op osition likely to be engendered by the specific policy actions c osen to deal with Qadhafi; (3)
counter these concerns with arguments designed to alleviate
undue anxiety and appeal to overriding motives of morality
and patriotism; and (4) expend the necessary resources and
utilize sufficiently varied channels to get the message
across to broad and opinion-shaping sectors of the public.
Danger Posed by Qadhafi.
We would want to get the following message across:
-- The political ideology subscribed to by Qadhafi is
antithetical to U.S. and western interests and to the norms
of international order subscribed to by most civilized
nations.
(1) Qadhafi considers assassination and terrorism to
be legitimate vehicles for accomplishing his policy
objectives.
- He has supported regimes as reprehensible as
that of Idi Amin.
- He operates a network of terrorist training camps
in Libya; people trained in these camps are then fanned
out within Africa, throughout Europe, and as far away
globally as the Philippines. (Declassify this informa-
tion, as necessary.)
- Groups supported include the Red Brigades (who
took credit for the kidnapping and killing of Aldo Moro
in Italy).
- Qadhafi planned to assassinate U.S. Ambassador to
Egypt Eilts in 1977 and was deterred from attempting to do
so only by strong action on our part. Within the last
three months, Qadhafi has publicly threatened the life
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of President Reagan and has sent assassination teams to
target several U.S. Ambassadors in Western Euro e. (If
proved): Even more recently, Qad afi s agents were
responsible for attempting to assassinate our Charge in
Paris, Christian Chapman.
(2) Qadhafi's incursion into Chad, ostensibly
to support the legitimate government t ere in the
midst of an ongoing civil war, was followed by demands
that Chad merge with Libya. When these demands were
rejected and Qa hafi was asked to leave in favor
of an OAU-sponsored peacekeeping force, Qadhafi
tried to manipulate the situation by withdrawing
precipitately, taking food and supplies with him,
and depositing new armaments with pro-Libyan guerrilla
forces so that they could carry on their campaign
against the central government on Libya's behalf.
Libya is reported to hope either that the resulting
chaos in Chad will result in an invitation to the
Libyans to return or that the ascendancy of pro-
Libyan forces who will view the merger plan with
greater favor than their predecessors will be achieved
on the battlefield. (Declassify this information, as
necessary.)
(3) Qadhafi's opposition to Israel and the Camp
David process is well-known. In efforts to undermine
constructive approaches to Middle East peace, Qadhafi
has sup orted the most radical of the Palestine
i eration groups -- those openly subscribing to the
the use of terrorism to achieve their goals.
(4) Partly as a result of his regional ambitions to
head a pan-Saharan Islamic State and partly in oppo-
sition to the U.S. and Camp David, Qadhafi has
supported dissident groups in pro-Western Tunisia,
Morocco, Somalia, the Sudan, and Egypt -- along with
a score of smaller African countries.
- Qadh afi's gloatin~ in the wake of the assassi-
nation of Anwar Sadat and his exhortations aimed at
achieving the overthrow of the successor regime in
Egypt were particularly obnoxious -- and give a measure
of the man he is.
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(5) Within Libya, itself, Qadhafi is punishing
opponents to his regime with arrest and torture,
while subscribing to an anarchistic philosophy that
alleges that there is no government. Instead, there
are "People's Committees" that undertake actions
in the name of the people in a manner that leaves
the individual citizen of Libya no redress agagainst
their excesses.
- Libyans who oppose the regime are not safe
even when living -in exile abroad. Qadhafi has
called for their liquidation as enemies of the
Libyan revolution.
- Qadhafi's long reach in this regard has
extended to western European countries and even
to the United States, as illustrated by the widely
publicized shooting incident involving a Libyan
dissent graduate student living in Colorado.
-- Qadhafi and the power that he could command by
virtue of Libya's small population of 3 million would
pose a relatively small threat were it not for Libya's
huge oil income. Under normal oil market conditions, this
income amounts to $25 billion a -year. Before the dis-
covery of oil, Libya'was one of the world's poorest coun-
tries.
-- Libya has used its oil income not to help in the
economic development of other poor countries, but to 2u1_
chase a vast arsenal of advanced Soviet weaponry, far in
excess of its own legitimate defense needs.
- Libya has already purchased over $12 billion
worth of Soviet weapons, paying the Soviets, in turn,
much-needed hard cash.
- These weapons, in addition to Libyan campaigns
of subversion directed against its neighbors, pose a
substantial regional threat in North Africa and in the
Horn of Africa -- areas crucial to the protection of
the Mediterranean and the oil-rich Persian Gulf.
- We cannot be certain of Soviet motives in pro-
viding a client as reckless as Qadhafi with such
advanced arms, but cannot discount the possibility that
the Soviets have pre-positioned advanced weaponry in
Libya_ to serve their own military purposes some time in
the ' future .
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-- Libya has widely proclaimed its intention to produce
an Islamic nuclear bomb. In spite of our efforts to curtail
the dissemination of nuclear technology and weapons-usable
materials, Libya's oil income makes it almost impossible to
prevent black market acquisition of roscri ed items.
U.S. Response to this Danger.
We have already taken several steps designed to demon-
strate that we will not conduct business as usual with a
.regime led by a person we consider to be an international
outlaw. The most dramatic of these steps were the closing
of the Libyan People's Bureau in the U.S. in May 1981 and
the U.S. naval exercise in international waters illegally
claimed by Libya in August 1981. In addition, we have taken
a variety of steps designed to curtail Libya's ability to
support international subversion and to reduce Libya's
conventional military capabilities.
If we decide to move further and undertake economic actions
like (1) a unilateral embargo of U.S. imports of oil from Libya;
(2) a blanket prohibition against U.S. commercial relations with
Libya; or (3) the mandatory withdrawal of U.S. citizens now re-
siding in Libya, we can expect the following concerns to be ex-
pressed by the U.S. public:
-- First, fear that the U.S. will pa for these actions at
the marketplace. In particular, there is likely to be an ex-
pectation that denial of Libyan oil -- whether by our own ac-
tion or by Libyan reprisal -- will cause U.S. domestic consumers
hardship. Memories of the Long gas lines of 1973 are still
sharp, as is concern about the high cost of home heating fuel
and its impact on the poor and elderly.
-- Second, antagonism generated by the assum tion that
others will profit commercially at U.S. expense. This
will be especially acute if wide publicity is given to the
likely continuation of lucrative business relationships
between Libya and our western allies.
In order to counteract these concerns, we would want to
stress the moral issue: service of the national interest
rather than private gain. Our policies would be making it
clear that we were not going to be doing "business as usual"
with an international outlaw. No longer would U.S. dollars
be used to fund international terrorism and purchase advanced
Soviet weapons.
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We would also want to undertake a campaign to explain those
aspects of the oil market that are especial relevant'here?
-- In the current period of glut, the U.S. is only import-
ing 3 percent of its imported oil supplies from Libya.
-- Oil of equal quality and lower prices is available from
Nigeria.
-- Even if the current glut should disappear, the U.S.
would be able to replace Libyan oil with that of other
suppliers.
-- Our recent policies to move forward on conservation
measures, the filling of our Strategic Petroleum Reserve, and
the encouragement of exploration for new sources of oil through
de-control of oil prices, are all measures that help provide us
with a safety net in the event that supplies are discontinued
from a single source.
-- Even though we have deplored the use of oil as a
weapon, there is no guarantee that oil producing nations will
not again seek to embargo oil to the West. By our actions we
will have indicated that consuming nations have a card to play,
too, and that we will no longer follow passive and reactive
policies that leave the initiative with the Libyas of this
world. (Although this theme would resonate well with an Amer-
ican audience, we may want to forego its use because, when re-
played in Arab oil-producing states, it may: engender sympathy
for Qadhafi; reactivate sednsitivity about the possibility of
the formation of a "consumer cartel"; and, in a worse-case
scenario, impel consideration of a counter-boycott against the
U.S.)
If we decide to undertake military steps beyond enhanced
regional security assistance, we will encounter fear of es=
calation that could lead to:
-- direct involvement of U.S. forces in combat in an area
far from home; and
-- ultimate U.S.-Soviet military confrontation on behalf
of the respective client-states involved.
Again, in order to counteract these concerns we would want
to focus attention on particular messages:
-- the deterrent effect of the military measures we are
undertaking.
-- our resolve not to introduce U.S. combat forces into
the area; and
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-- the necessity to take forceful, timely action in order to
prevent harder choices form confronting us further down the
road.
Channels for an Information Campaign
These would be varied. In addition to backgrounders to
the press, we would want to ask key administration officials
-- from the Departments of State, Energy, Commerce, and
Defense -- to brief opinion-shaping groups privately and to
give public addresses in the forums that would gain the
greatest publicity: the Council of Foreign Relations in New
York, the Chicago Council on Foreign Relations, the World
Affairs Council, the Foreign Policy Association, and other
similar groups -- with special emphasis on regional dispersal.
We would also want to mount a speaking campaign, coord-
inated by State, to reach public affairs groups at the
community level. The scope of this effort and the resources
we would devote to it would depend, in part, on the measures
chosen to deal with Libya. Similarly dependent on the kind
of measures chosen would be the kind of audience targeted at
the community level. If low-level military-measures are
chosen to supplement economic measures, for example, we
would want to address groups that are eager to support
a more forceful U.S. stance in the world as well as their
opposite number: groups that are fearful of the escalating
consequences and ultimate social costs of such action.
If only economic measures ar chosen, we would want to place
our emphasis on business and consumer groups.
Timing
The sequencing of the components of a public affairs
campaign, and the amount of lead-time needed for each one
would also be partially dependent on the measures chosen and
the need for secrecy prior to their effective enactment. We
could certainly begin with a campaign to outline the general
threat Qadhafi presents, as indicated in the first section
of this paper. Following this, we would want to tailor the
subsequent stages of the information campaign to the require-
ments set by the measures chosen and others that we see
downstream.
Drafted: S/P: EMorton
11/17/81
Cleared:'INR: GHarris
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TAB C
CHRONOLOGY OF CONSULTATIONS AND PUBLIC STATEMENTS
RELATED TO ACTIONS AGAINST LIBYA
Assu__m__pt~ti__o_nns_~ governing this chronology and factors that
will bdetermining when precise dates are selected include the
following:
1. The President, upon consultation with the NSC, may
approve a program of phased implementation of more than one
op on. Time allotted to evaluate the effectiveness of each
measure and choice of the optimum point for proceeding to the
next step will have to be factored into the scenario presented
here.
2. Timing of implementation of the more forceful o tions,
for example, Option 3, the U.S. embargo of Libyan oil, will
have to be geared to external events. Principal among tie is
the Libyan withdrawal from Chad and the degree to which the
Africans and our European allies believe this process to be
demonstrating good faith on the part of the Libyans.
3. We will want to weigh the benefits of implementing
our stronger measures (Option 3 and above) immediately follow-
ing some particularly-
articular y egregious Libyan action against those of
moving in a deliberate, measured manner, and at a time of our
own choosing, to demonstrate that we are acting against the
whole range of threatening Libyan behavior. A particularly
heinous Libyan crime., like the assassination of a U.S. ambas-
sador, would help dramatize the need for U.S. actions against
Libya and the fulfillment of our promise of swift and effective
retribution against terrorism. On the other hand, we would not
want to narrow the frame of reference of "provocation" and
"response" to such an extent that we leave ourselves open to
the politically costly charge of having overreacted.
4. While we will want to give Congress and our allies as
much advance warning of our intended actions as possible,
the presence of 1500 Americans in Libya makes us particularly
vulnerable to the negative effects of leaks. Our first goal
will be to try to o tain the withdrawal of as many Americans as
possible, through application of Option 1 (voluntary withdrawal
by U.S. companies) and, if necessary, Option 2 (mandatory
withdrawal). Even as we consult with the CEOs of the major
companies in Libya as envisioned by Option 1, we cannot rule
out the possibility that we will be contributing inevitably to
a self-fulfilling prophecy: some of the companies may immed-
iately inform Qadhafi of the purpose underlying our approach to
them; although unlikely, Qadhafi, in turn, may delay the depar-
ture and otherwise harass those Americans under instruction to
leave, creating a situation differing from a "hostage crisis"
only in degree.
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5. We will want to weave together the public affairs
strategy presented at Tab B with the implementing actions
that we choose to undertake. This will require careful
calibration so that we prepare the U.S. public in advance of
actions taken without (a) adding to the gap that currently
exists between rhetoric and action and (b) sending a message
to our domestic audience that will build up Qa ha i s
prestige when replayed in the media of Arab and other Third
World states that harbor a certain sympathy for Qadhafi as
an underdog taking on -- or being taken on by -- one of the
superpowers.
6. We will want to encourage a shift in the oil market
away from Libya and toward Nigeria and other alternative energy
suppliers. We will also want to see production levels and
pricing policies undertaken by Saudi Arabia and other OPEC
members that will facilitate our ability to enact an embargo
against Libyan oil without incurring undue hardship ourselves
or bringing it upon our allies. We can approach our allies
with the suggestion that they shift their contracts, where
possible, to Nigeria. We can approach the companies with this
fairly obvious suggestion. We can approach Saudi Arabia and
other OPEC members carefully and generally about issues like
production levels and in explanation of the rationale behind
actions being considered against Libya. We must be very
careful, however, lest we:
-- create sufficient sympathy for Qadhafi to activate
Article 4 of the OPEC charter that states that "if Fa.nons
are adopted directly or indirectly by one or several companies
against one or several member states, no other member state
will accept an offer of preferential treatment"; or
-- by informing Nigeria in advance of our intention to
embargo Libyan oil and encouraging our own companies and
allies to shift to Nigeria as a supplier, that we inadver-
tently encourage Nigeria to raise its price or hold up long-
term contracts currently being negotiated with our companies
and those of our allies, in the anticipation that an embargo
against Libyan oil will put them in an advantaged position.
We may have already passed the point at which advance
notice of the likelihood that the U.S. will impose an embargo
against Libyan oil constitutes "secret" information that could
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be used for commercial gain either by the producers or oil-
importing companies. Nevertheless, the companies would
probably prefer handling the shift to Nigeria in their own way,
without a well-meaning government-to-government approach that
might undercut them financially more than it paves the way for
increased access. The Nigerians have oil to sell and they will
sell it. In this instance, it may be better to let the oil
market do our work for us.
Scenario The target dates presented below are for
purposes of llustration only. In order to establish the
distinction between consultations in the pre-decision and
post-decision stage, an arbitrary date for Presidential decision
has been selected as being December 4. Another parameter that
has to be taken into account is the fact that it takes from
45-60 days for the processing of exit visas of U.S. citizens
wishing to leave Libya. Implementation of Option 3, the oil
embargo, and above, would have to be delayed accordingly.
The following groups would be consulted: (1) companies
with major operations in Libya and principal U.S. exporters to
Libya; (2) members of Congress; (3) our allies; (4) regional
friends in Africa and the Middle East; (5) Saudi Arabia, key
OPEC states, and (if decided advisable) Nigeria and other
potential replacers of Libyan oil; and (6) the U.S. public. It
is assumed that our campaign to publicize the Libyan threat
abroad is underway and is continuing.
Chronology: Pre-Decision Phase. There is a strong
feeling on the part of those with wide experience in dealing
with Congress that we should bring key members into our decision
process by consulting them before a decision is actually taken.
given the problem of leaks, even from such a select group, a
decision to inform key members of Congress about the kinds of
action we have under review necessitates even earlier consulta-
tion with our principal allies, again in very general terms.
In order to guard against the possibility of injured feelings on
the part of Saudi Arabia and other key OPEC members, this may
also be the time to consult with this group as well.
-- Consultations with Allies would begin immediately. We
would go to the Quad and to Malfatti of Italy and
indicate that we are reviewing our policies toward
Libya and feel the need to take measured action to
protect our citizens there and our friends in the area.
No further details would be given. The objective would
be to prepare the ground for more specific information
to be provided later and to guard against the possi-
bility that the allies learn of the basic outlines of
our policy review from leaks in the press.
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-- Consultations with key members of Congress would
begin twos later. At this stage we would want
to consult with--t-Fe--bipartisan leadership of both
the House and Senate. Our primary purpose would be
to begin to build support for more forceful actions
against Libya by consulting privately with key
members of both houses, those who could be especially
influential with their colleagues, and in a way that
would give them a stake in the policy outcome. We
would also want to consult with those members who
have a particular interest in usage of IEEPA, the
Trade Expansion Act, and the Export Administration
Act should we want to use these as legislative
instruments later on.
o
In the House we would want to consult at
this
stage with Zablocki, Broomfield, Fascell,
Hamilton,
Findley, Wolpe, Derwinski, Goodling, and
Bingham.
o
In the Senate we would want to consult with
Percy, Pell, Boschwitz, Kassenbaum, and Lugar.
o
To be effective, these consultations should
be conducted at the Secretarial-level.
-- Consultations with Saudi Arabia and key OPEC states,
including Nigeria would begin simultaneously wit
these early Congressional consultations. Our
objective would be to discuss the Libyan threat in
general terms, our feeling that we will eventually
have to take action to protect our people and
regional friends, and our concern that the oil
market not be allowed to give Libya particular
advantages at the very time when its threatening
actions will have to be contained.
-- Public Statements. We would begin immediately to
ask administration spokesmen to introduce, where
relevant, measured but forceful statements about the
broad scope of Libyan activities that threaten U.S.
interests. We would stress the political ideology
that motivates Libyan activities (see Tab B)
and the capabilities that Libya has at its dis-
posal. We would seek as wide as possible geogra-
phical distribution of this message within the U.S.,
through backgrounding the press as well as through
the vehicle of public speeches. What we would want
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to avoid, at this stage, would be highly dramatized
descriptions of Libyan behavior (assassination
plots, terrorist training camps) that would heighten
the public dismay that our rhetoric is unmatched by
action on our part.
Chronology: Presidential Decision. Anticipated
by December 4.
Chronology: Immediate Post-Decision Phase. We would
want to give the oil companies enough in ormation to make a
persuasive case that they should withdraw their personnel
voluntarily without giving them information that, if leaked,
will forewarn Qadhafi and enable him to take pre-emptive
action -- including the taking of hostages. It will be
very difficult, if not impossible, to strike this balance.
-- Consultations with CEOs of major companies doing
business in Libya would take place within one week
of the decision. In order to be effective, t ese
consultations would have to take the form of a
personal appeal by the President for these companies
to withdraw their personnel from Libya as rapidly as
possible in the national interest (Option 1).
o If Option 2 (mandatory withdrawal) or Option 3
(oil embargo) are chosen, the message would be
restated and framed accordingly at the appro-
priate time. If Option 1 is relied upon to get
the Americans out of Libya prior,to implementation
of an oil embargo, the date of the oil embargo
itself would be projected to fall approximately
on February 15.
o If Option 4 (banning all exports to Libya) is
chosen, the President would also call in the
CEOs of major U.S. exporters to Libya.
Broader Consultations with Congress would begin at
the same time: within one week of decision, bearing
in mind the possibility that the Christmas recess
will intervene.
o During this phase we would want to broaden the
scope of individual congressmen being approached
privately and confidentially. In the House,
for example, we would want to include Members
like Fenwick and Lantos who, while not as
intimately connected with the regional issues,
have a unique ability to focus their colleagues'
attention on the moral imperative of certain
policy actions. We would also want to broaden
the initial group in the Senate for similar
reasons.
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- 6 -
o We would also want to make certain that from
this point forward (from decision to implemen-
tation of Options 2-4), there is good liaison
work between the intelligence community and the
relevant intelligence committees of Congress on
(a) the Libyan threat and (b) the likely impact
of our planned actions.
o Legislative requirements to consult with
Congress before invoking IEEPA, the Trade
Expansion Act, or the Export Administration
Act would be fulfilled during this phase.
The precise requirements are set forth in
Attachment A of this paper.
Chronology: Pre-Implementation Phase (for Options 3-4,
with implementation date for Option 3 tentatively set at
February 15. If Option 2 is necessary to achieve a suffi-
ciently large withdrawal of U.S. citizens then the implemen-
tation date will slip accordingly).
-- Broader Consultation with our Allies would take
place at least one wee prior to implementation.
We would want-to be certain to include the Turks
(because of their 70,000 nationals now working in
Libya) and the Netherlands (because of the operation
in Libya of Royal Dutch Shell). Our briefings at
this point would also include NATO Secretary
General Luns and European Community Commission
President Gaston Thorn.
o We would explain our purposes in undertaking
unilateral action; express our preference for
allied action of a similar kind; thank them in
advance for whatever other cooperation they can
provide; and express our willingness to help
them as much as possible to counteract whatever
negative effects of our actions they find
themselves enduring.
o As with similar instances of prior consultation,
we would want to prepare contingency press
guidance for use in case there are leaks to the
press.
-- Consultation with Regional States would take place
at the same time There would be a trade-off here:
the possibility that leaks or intelligence gathering
on his part will give Qadhafi prior warning and the
ability to take pre-emptive or retaliatory action
versus the responsibility on our part to give our
friends in the region sufficient time to present
their own views and to take preparatory action
should Libya decide to retaliate against them.
S.RC'RRT /SRNSTTTUR
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o It can be argued that, as with our allies,
certain regional states, principally Egypt and
the Sudan, should be approached in a two-phased
process that gives them a longer lead-time than
1 week.
Chronology: Upon Implementation. (Options 2, 3, or 4)
-- Presidential meeting with leadership of both houses
of Congress. This would take place immediately
prior to public announcement of the action to be
taken and its rationale. These leaders will already
have been briefed by others. A meeting with the
President at this time would signify to those
concerned, and to the press, when announced, the
importance and symbolism of the policy action(s)
about to be implemented.
-- Presidential Statement indicating that U.S. concern
about Qad afi s support of international terrorism;
his destabilization campaigns aimed at regional
states; his initial incursion into Chad and the way
in which he manipulated his withdrawal to Libyan
advantage (or, if clearly apparent by this time, "in
spite of Qadhafi's orderly and seemingly permanent
withdrawal from Chad"); his assassination campaigns
against U.S. public figures and against the leaders
of regional friends -- Egypt and the Sudan -- and
the massive Libyan stockpiling of advanced Soviet
weaponry make it imperative that the United States:
o If Option 2 being implemented: "withdraw our
citizens from the danger we believe them to face
in Libya so long as that country is led by a
lawless regime that does not respect the norms
of international behavior";
o If Option 3 being implemented: "cease funding
such lawless Libyan behavior through U.S. yearly
$10 billion purchase of Libyan oil"; or
o If Option 4 being implemented: "cease all ex-
ports to and commercial activity in Libya so that
we will no longer be in a position of contributing
to Libya's ability to carry on its lawless behavior
through our $10 billion yearly purchase of Libyan
oil and our $500 million yearly exports of oil
production and other high technology equipment".
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8 -
Cautionary Note. In making our case to the public at
this point, the greatest political danger (and one that
could be focused on the President and the Secretary, in
particular) is that the United States would be perceived
as over-reacting, no matter how great the actual threat
posed by Libya. To the extent that the way in which we talk
to our own people about Libya will be replayed in the press
of our allies and throughout the Arab and Third World, this
cause for concern is magnified. Therefore, we will want to
get across the basic message that our purpose is to protect
our citizens and to cease being in a position of funding
Libyan aggression, albeit indirectly. We would stress that
our actions are measured and, after careful analysis,
calculated prudently to meet the specific problem posed by
Libya: that Qadhafi is an international outlaw, there is a
need to respond, and ours is a reasonable, concrete response
to the dangers posed by Qadhafi's behavior. In addition,
we may wish to put a time limit on whatever action we decide
to take, along with conditions that Libya must fulfill for the
measure(s) to be rescinded. We do not want to leave ourselves
open to the facile charge that our measures have not achieved
a moderation of Qadhafi's behavior. On the other hand, we
do not want removal of our sanctions to signal approval of
Qadhafi's behavior at some later date. One way out of this
dilemma may be to make it clear that we will review whatever
sanctions we undertake after a one-year (or two-year)
period. This approach may also have the advantage of
appealing to those portions of the U.S. business community
that will be bearing the brunt of this foreign policy
action.
Drafted: S/P:EMorton
x20993
11/19/81
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Congressional and Industry Consultations:
Statutory Requirements
IEEPA provides that "the President, in every possible
instance, shall consult with the Congress before exercising
any of the authorities granted by this title. . . . .
" It does not specify the procedures to be followed in
conducting such consultations. Based on past practice we
judge that, as a minimum, the Chairman and Ranking Minority
Member of (a) both Foreign Affairs Committees, (b) the Trade
and Economic Subcommittee of the House Foreign Affairs
Committee, and (c) the Senate Banking Committee should be
contacted.
IEEPA does not specify the content of such consultations.
It does require, however, that upon exercising his authority
under the Act, the President shall immediately transmit to
Congress a report specifying the circumstances which necessitate
such exercise of authority and why they constitute an unusual
and extraordinary threat. He must also report the actions to
be taken and why such actions are necessary. Congress will
expect these matters, at a minimum, to be covered in prior
consultations.
Finally, IEEPA does not specify the timing of such
Congressional consultations. The Congress will expect that,
consistent with the purposes of the requirement, consultations
occur sufficiently in advance of a decision that any views
conveyed during such consultations could be taken into
account by the President in reaching a final decision.
Section 6 of the Export Administration Act of 1979
authorizes the imposition of Foreign Policy controls on U.S.
exports. Certain enumerated criteria must be considered
prior to imposing such controls. The Secretary of Commerce
is required to "consult with such affected United States
industries as the Secretary considers appropriate" with
respect to two of those criteria -- (a) the probability
that the controls will achieve their intended purpose
and (b) likely effects of the controls on the export per-
formance, competitive position and international reputation
of the United States.
Prior consultations with Congress are also required
"in every possible instance." At a minimum, such consultations
should include the Chairman and Ranking Minority member of the
Trade and Economic Subcommittee of the House Foreign Affairs
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Committee and of the Senate Banking Committee. A written
report to the Congress detailing the conclusions reached by
the President concerning the various criteria enumerated in
the statute is required immediately upon imposition of
controls.
As in the case of IEEPA, timing of consultations should
be such as to permit Congressional views to be taken into
account prior to a final decision.
Section 232(b) of the Trade Expansion Act of 1962, as
amended, which authorizes the restriction of imports for
national security purposes, requires consultations with the
Executive Branch and public hearings "if it is appropriate."
We believe a decision not to hold public hearings in this case
would be legally supportable. A public report is required on
the dispositon of each such proposed restriction.
Congressional consultations are not expressly required,
but would seem prudent, particularly in the absence of
public hearings. Experience would indicate that the Chairman
and Ranking Minority members of the Trade Subcommittee of the
House Ways and Means Committee and of the Trade Subcommittee
of the Senate Finance should be contacted as a minimum
L/NEA:MKozak:jv
11/18/81 ext. 24110
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Option 2: Withdraw U.S. Business Personnel from Libya
As indicated in the basic policy paper, this option
includes several legal steps designed to bring about the
withdrawal of U.S. business personnel. These steps might be
taken individually or in conjunction with other options
discussed in this paper. Several of those options involve
novel uses of statutory and regulatory authorities. Their
implementation would require further legal and factual
analysis by the agencies concerned.
A. Impose administrative or criminal penalties on
persons employed by United African Airlines under the Export
Administration Act: Violations of regulations or orders
issued by Commerce pursuant to the Export Administration Act
are punishable by the imposition of administrative penalties
(fines and denial of export licenses) or criminal sanctions.
UAA has been determined by Commerce to be ineligible as
a recipient of U.S. exports. Commerce regulations prohibit
any person from providing U.S. origin goods or technology to
such a "denied party." Therefore, persons providing such
technology in the form of services to UAA might be charged
with a violation of the regulations on this ground.
Under the regulations, aiding or abetting violations of
the export controls imposed pursuant to the Act is itself a
violation. Some of the U.S. civilian type aircraft used by
UAA have been transferred to Libya in violation of Commerce
Department export controls. Use of such aircraft with
knowledge of the violation is a continuing violation under
the regulations. Commerce might therefore charge United
States persons working for UAA in the use or servicing of
illegally obtained aircraft with aiding and abetting such
violations.
Such actions would constitute novel applications of the
Act, and enforcement could prove problematic given the
difficulty of obtaining information on activities in Libya
which could be used as evidence in on-the-record adminis-
trative proceedings governed by formal ajudicatory procedures
or in judicial proceedings. Nevertheless, the very fact
that we were seeking to impose sanctions in such cases could
serve as a deterrent to additional U.S. nationals taking
employment with UAA.
This step would be consistent with all of the other
options described in this paper, but is not dependent upon
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the adoption of any other measures. It could be taken now
in furtherance of our existing policy of denying support to
Qadhafi's air carriers.
B. Impose Restrictions on Use of U.S. Passports for
Travel to Libya; The Secretary of State has authority under
the Passport Act of 1926, as amended, to make passports
invalid for travel to, in or through "a country or area in
which there is imminent danger to the public health or
safety of U.S. travelers." Restrictions on the use of
passports for travel to Libya could be justified in light of
Qadhafi's manifest hostility towards the U.S., his willing-
ness to encourage or permit placing in jeopardy the safety
of U.S. individuals, as the mob attack on our Embassy which
caused us to withdraw U.S. diplomatic personnel demonstrates,
and the absence of any consular protective services in Libya
for U.S. nationals.
It should be recognized, however, that this step alone
could be of limited effectiveness. During the nearly 40
years in which geographic restrictions on travel by American
citizens to one or more foreign countries were in force
under the Passport Act, no successful prosecution was main-
tained for violation of geographic restrictions. This is so
largely because in order to have a successful prosecution
the Government must prove that a U.S. passport that was
geographically restricted was used to enter the country to
which travel was restricted. Persons travelling to geograph-
ically restricted areas generally work out arrangements with
the country of destination to admit them without presentation
of the passport; if the passport is not used, no violation
occurs. Even if the passport is used, evidence on this
point is not likely to be available to prosecutors in the
United States.
Notwithstanding the potential prosecutional problem, an
order under the Passport Act might be effective as a basis
for withdrawal of U.S. persons by corporations otherwise
inclined to such withdrawal but who simply desire a firm
order from the Government to protect them from shareholder
actions. Thus it would serve to reinforce efforts under
Option 1 to encourage voluntary withdrawal. Moreover, it
would constitute a means of buttressing our legal case in
support of the steps described under C below, should one of
those measures be approved.
C. Seek to Compel or Promote the Withdrawal of U.S.
Business Personnel from Libya as a Prerequisite to Addi-
tional Economic Measures Under the International Emergency
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Economic Powers Act or the Export Administration Act:
U.S. policy making vis-a-vis Libya has been constrained by
the presence of the significant number of U.S. business
personnel there as potential hostages. Under this approach,
we would seek in advance of imposing any additional economic
sanctions to minimize the potential for hostage-taking by
taking--in conjunction with passport restrictions--steps
designed to force the termination of employment of U.S.
nationals in Libya. Two potential legal bases are avail-
able; there are legal problems and uncertainties with each.
First, under the International Emergency Economic
Powers Act the President may declare a national emergency to
deal with any unusual or extraordinary threat to the national
security, foreign policy or economy of the United States
which has its origin outside the United States. Once he has
done so, he has authority to preclude transfers of credits
or payments by any person subject to U.S. jurisdiction,
directly or indirectly, to any foreign country or its
nationals as well as to prohibit importation or exportation
of any property in which any fcreign country or its nationals
has an interest. This authority has been used in the past,
specifically in the Iranian hostage situation, to restrict
transactions related to travel, but only in the context of
broad restrictions against transactions with the country
involved.
Conceivably the President could declare a national
emergency in narrow terms focused on the presence of the
approximately 1500 U.S. citizens now.'.in. Libya. -The-argument
used would be that Libya's record of support of terrorism
and declared hostility against the United States places
these Americans in circumstances that make them potential
hostages, thereby constituting "an extraordinary threat to
the effective conduct of U.S. foreign policy."
There are three concerns regarding declaration of an
emergency which is narrowly based on the voluntary presence
of U.S. persons in Libya. First, such a declaration accompanied
by appropriate sanctions would be utilizing the power available
under IEEPA as a pure restriction on travel, a purpose not
clearly justified by its history. Such a narrow utilization
of IEEPA power would provide an additional basis for challeng-
ing prosecutions for violation of such an IEEPA order. in
addition, a narrow declaration would possibly require the
issuance of a broader declaration if other IEEPA sanctions
were deemed necessary at some point in the future, requiring
the various procedures required by IEEPA to be followed.
Finally, it can be argued that invocation of IEEPA on this
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basis could "cheapen the currency" and raise foreign appre-
hensions that IEEPA can or will be invoked to deal with
situations of lesser gravity.
On the other hand, it can also be argued that declaring
and explaining an emergency on such narrow grounds might
minimize concerns of investors and other governments that
might follow from declaring a broadly articulated emergency
that would permit full-scale U.S. embargo of Libya possibly
e-:tending to foreign subsidiaries of U.S. firms.
On the basis of this declaration of emergency, the
President would prohibit direct or indirect financial trans-
actions by Americans with foreign persons related to the
travel to or presence in Libya of Americans for business
purposes. This would substantially inhibit business travel
to or presence in Libya. Limiting the restrictions to
business related travel would substantially increase the
prospects for effective enforcement. To the extent that
U.S. based and controlled firms are the employers, enforce-
ment efforts could be focused on them rather than on indi-
vidual employees.
By restricting only business related transactions, we
would seek to avoid Constitutional challenges based on
interference with first amendment freedoms.
A second alternative legal basis for applying pressure
to achieve the withdrawal of U.S. personnel would be the
Export Administration Act of 1979. That statute permits the
President to prohibit the export of goods and "technology"
for overriding foreign policy reasons. Restrictions on the
export of "technology" have included restrictions on the
export of technical services (e.g., technical services by
computer technicians in the Soviet Union). We could prohibit
the export of "technology" in the form of technical services
performed in Libya by U.S. oil workers, aircraft pilots and
service personnel.
This approach would have certain advantages from an
enforcement standpoint. Administrative sanctions against
U.S. firms, which failed to cease providing designated
services, include general denial of export privileges. On
the other hand, usable proof that an individual performed
technical services utilizing U.S.-sourced "technology" while
in Libya would be extremely difficult--if not impossible--to
obtain.
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The alternative legal bases described above are not
mutually exclusive. If this step were decided upon, further
review would be required to determine which of the two bases
(or a combination thereof) would be most effective.
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lipi DEPARTMENT OF STA E ~'
SECRETARIAT STAFF
(s/s-s) 01
I neglected to pass out to you
during today's SIG the most current
version of the paper under discussion.
Tain Tompkins
S/S-S (IA)
brought the attachec25X1
over this morning. He said it is
the most recent paper on Libya.
They did not discover that it was
in Admiral Inman's safe at home
until 4:00 on Friday. 0 25X1
trusts that we will get 25X1
Me ppropriate copies to the
proper people (ES, etc.).
(FYI-This paper came in in an
EYES ONLY envelope).
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