LIBYAN SANCTIONS UPDATE #6

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T01017R000404350001-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: December 22, 2016
• Document Release Date: March 7, 2011
• Sequence Number: 1
• Publication Date: October 3, 1986
• Content Type: REPORT

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Central Intelligence Agency
DIRECTORATE OF INTELLIGENCE
3 October 1986
LIBYAN SANCTIONS UPDATE #6
This report contains information relevant to the US effort to
impose sanctions on Libya. It covers the month of September and
includes all West European countries plus Argentina, Brazil,
Canada, Japan, and South Korea. Some countries are not mentioned
because there were no significant developments.
This report was prepared by the West European Division,
Office of European Analysis, with contributions from other 25X1
offices. Questions and comments are welcome and may be addressed
Chief, West European Division.
EUR M86-20113C
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The Karachi hijacking, Paris bombings, and Istanbul massacre
have raised concern about terrorism and led to stricter security
measures in a number of countries. Italy will henceforth check
diplomatic bags with metal detectors
Italy also signed an anti-terrorist cooperation agreement with
Greece and is seeking a similar accord with the EC. France and
Portugal have tightened visa requirements, while Ireland has
banned Libyan students from entering the country because of
Tripoli's support for the IRA.
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Greece, in 25X1
addition to signing the accord with Italy, said it would ratify a
1977 European convention on terrorism. 25X1
On the key issue of Libyan oil exports, the West Europeans
remain extremely skeptical of the US plan to require that oil
product exports to the US be certified free of Libyan crude.
Government jawboning against importing Libyan oil appears to be
bearing fruit in France -- where Libyan oil imports were down
sharply in June and July -- but not in Italy.
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Overview
Belgium's economic dealings with Libya have diminished
considerably but the government remains opposed to applying
economic sanctions to solve political problems. While Brussels
has told oil companies it looks down on importing Libyan crude
into Belgium, it lacks the legal authority to stop such dealings.
Belgian officials are also skeptical about the effectiveness of
the US certification program.
Canadian policy towards Libya remains unchanged. The
economic sanctions imposed in January remain in place and no new
ones are currently being considered.
Actions Supoortir.a US Sanctions
Contrary to earlier reports, Canada has imported no Libyan
oil this year. The statistics which indicated imports in
February represented only the payment for a delivery taken in
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Overview
France continues to quietly support US efforts to out
economic pressure on Qadhafi but the Libyan issue has largely
dropped from public view in France. Attention has focused on the
recent spate of terrorist attacks in Paris, which do not appear
Actions Supporting US Sanctions
In an early September meeting with US diplomats, the senior
French government official in charge of energy policy confirmed
that Elf Aquitaine and Total, the two largest French oil
companies, have stopped buying Libyan crude. The official added
that if the home governments of other oil companies joined in
instructing their firms to stop buying Libyan crude, Tripoli's
revenues would be cut more effectively than through a
certification program.
In another early September meeting, a Foreign Ministry
official told US diplomats that French firms have promised not to
service the two A310 airplanes recently diverted to Libya from
British Caledonian. The official went on to say, however, that
Airbus Industrie is concerned about its liability should safety
roblems
i
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p
ar
se
ue to improper maintenance.
According to recent customs figures, French imports of Libyan
crude cil continued to drop in July to 107,000 metric tons. This
contrasts with imports of 536,000 MT in April, 253,000 MT in May,
and 177,000 MT in June. Virtually all this oil was imported by
Shell and BP, two of the six companies now refining oil in
France. US diplomats report that the French government has made
strong appeals to Shell and BP to cut off imports entirely, but
the companies maintain that they are simply taking final
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Athens last month publicly supported some European
anti-terrorist initiatives, but remains reluctant to specifically
condemn Tripoli. 25X1
Actions Supportinq US Sanctions
Athens supported a strongly worded Council of Europe
resolution on combatting terrorism and announced that the
Council's 1977 Convention on the Suppression of Terrorism would
soon be ratified by the Greek Parliament.
Greece and Italy signed a bilateral agreement to exchange
information on terrorism, narcotics trafficking, and organized
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Overview
New Delhi's response to Qadhafi's harangue at the Nonaligned
:Movement (NAM) summit meeting in Harare and Indian suspicions
that Libya may have been involved in the Karachi hijacking
indicate growing Indian exasperation with Qadhafi. We expect
that New Delhi's irritation--especially if evidence of Libyan
involvement in the hijacking is passed to the Indians--will
prompt Prime Minister Gandhi to reevaluate Indo-Libyan eccnomic
:ies with an eye to curtailing activity.
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Overview
Dublin continues to allow Irish firms to pursue lucrative
beef export deals with Libya. 25X1
,Actions Supporting US Sanctions
Dublin announced it will refuse entry to Libyan students
because of Libyan support for the IRA; about 300 Libyans
presently studying in Ireland will be permitted to complete their
studies. Irish officials are anticipating that Libya will end
purchases of Irish beef in retaliation.
Overview
The recent terrorist attacks in Pakistan, Turkey, and France
aooear to have refocused Italian interest in finding
international means to combat terrorism. Rome signed an
anti-terrorist cooperation agreement with Greece last month, and
is seeking a similar EC accord to encourage greater information-
s^aring among the Community's police forces and intelligence
Actions Supporting US Sanctions
Fiat, several months after its initial offer, has persuaded
Libya to sell its 14.5 percent share of the company for $3.1
billion. Fiat has purchased about one-third of the stock; the
remainder will be placed with institutional investors through an
international consortium led by Deutsche Bank.
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As of this week, Rome will require diplomatic bags to pass
through metal detectors to prevent their use in the illegal
importation of weapons. To avoid accusations of favoritism all
countries will be notified that their pouches are subject to
inspection. In reality, some countries--at least including EC
members, Canada,.Australia, and the US--will be exempt.
Actions Undermining US Sanctions
The state-owned energy conglomerate, AGIP, which has half
ownership of Libya's offshore Bouri oilfield, sent an oil
drilling platform to Libya on 6 September. Production from the
platform--which is capable of pumping up to 150,000 barrels/day
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The president of ENI, AGIP's parent company, told US
officials that other Italian companies, most notably Montedison,
have increased their purchases of Libyan oil. He justified
continued purchases of Libyan oil on grounds that Qadhafi would
not live forever, and that Italy must take a long term view of
Libya in light of its large export market there.
Actions Undermining US Sanctions
The Maltese delegation briefly disrupted the recently
concluded Stockholm disarmament talks by demanding an expansion
of the agreement to include Mediterranean military exercises.
This action probably reflected the Maltese view that US
activities in the Mediterranean have increased tensions.
Maltese Foreign Minister Sceberras Trigona reportedly is
encouraging a US firm, Ingersoll Ltd., to establish a school in
Malta to train Libyan teenage boys in English, business, computer
studies, and general engineering. Ingersoll, which reportedly
once provided technical training in Libya and then London, now
operates in Dublin, but deteriorating Irish-Libyan relations
apparently are forcing it to relocate once again.
The Hague continues to encourage Dutch firms not to undermine
US sanctions and Dutch economic relations with Libya are small.
Dutch officials have told our Embassy the government does not
have the legal authority to ban imports of Libyan crude and is
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unwilling to take any further action without an EC agreement.
In light of the recent terrorists attacks in France, Portugal
has taken a tougher stance against international terrorism.
Several counterterrorist measures went into effect in
mid-September, most notably stricter visa requirements. Although
Lisbon acknowledges Tripoli's role in international terrorism, it
will not impose economic sanctions independently of the European
Community. 25X1
Overview
Seoul recently reiterated its backing for Washington's goal
of curtailing terrorism, and economic technocrats favor a plan to
-essen South Korea's dependence on Libyan construction contracts
and oil, according to State Department reporting. Nonetheless,
because South Korean firms still have a huge financial stake in
Libya, Seoul is resisting pressure to cut purchases of Libyan
crude oil, according to US Embassy and State reporting. In fact,
the South Korean government and the country's largest firms have
recently had to increase the role of oil in settling commercial
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and political accounts with Libya, because Tripoli insists on
paving its debts in crude rather than cash. 25X1
Actions Undermining US Sanctions
According to the US Embassy, Seoul resisted for
over a year Tripol-i's demands that imports be raised by 50,000
b/d but South Korean Foreign Ministry officials said unspecified
threats by the Libyans forced Seoul to accept at least some
additional imports.
Seoul has discouraged bidding on new Libyan construction
projects by domestic firms since sanctions were imposed, but the
government will have difficulty preventing South Korean firms
from bidding for the second phase of the Great Manmade River
Project if japan and European countries allow their firms to make
tenders, according to State sources. 25X1
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Actions Supporting US Sanctions
The Spanish Foreign Ministry has produced a paper which
provides a detailed report on Libyan financing and training of
radical and extremist groups in Spain.
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Overview
Ankara continues to pursue commercial relations with Tripoli
in hope of recovering debts owed Turkish firms.
UNITED KINGDOM
Overview
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London remains vigorously opposed to economic sanctions
against Libya. The British agree with the US objective of
reducing Libyan oil exports but have doubts about the
effectiveness of a US embargo on products derived from Libyan
crude. Officials continue to express a desire to be exempted
from the proposed certification program because of the small
amount of oil imported from Libya and the small percent of US oil
imports that originate in Britain. 25X1
Actions Supporting US Sanctions
The Foreign Office informed our Embassy that London will not
renew Libyan Arab Airlines' operating permit when it expires at
the end of October. Officials stressed that the decision was not
in response to US pressure but rather is linked to a court
finding that the airline had been used to smuggle hand grenades
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SUBJECT: Libyan Sanctions Update #6
Copy 1 - Ambassador Robert Oakley, Counterterrorism,
Rm 2236/State
2 - Ambassador Rozanne Ridgway, EUR, Rm 6226/State
3 - Kenneth Dillon, INR/WEA, State
4 - Roger Dankert, NEA/AFN, Rm 5250/State
5-6 - Douglas Mulholland, Room 4324, Treasury
7 - Ty Cobb, Room 368, NSC
8 - Ollie North, Room 368, NSC
9 - Don Halstead, Room 4324 Treasury
10 - D/DCI-DDCI Executive Staff
11 - DDI
12 - ANIO/EUR
13 - NIO/CT
14 - D/EURA
15-16 - EURA/PS
17-19 - IMC/CB
20 - NESA/SO
21 - OEA/NA/J
22 - OEA/NA/K
23 - C/MPS/PES (2G02)
24 - EURA/WE/BBC
25 - EURA/WE/CM
26 - EURA/WE/GN
27 - EURA/WE/IA
28 - C/EURA/WE
29 - DC/EURA/WE
30-34 - EURA/WE
35 - C/EURA/EI
36 - C/EURA/EI/EI
37 - WE Subject File
38 - C/NESA/AI/M
39 - OGI/SRD/SFB
DDI /EURA/WEB
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