Libya Is Said to OK Funds for Lockerbie

The Libyan government signed an agreement Wednesday setting up a $2.7-billion fund for families of the 270 victims of the 1988 Pan Am bombing over Lockerbie, Scotland -- a key step toward lifting U.N. sanctions against Tripoli, the families’ lawyers said.

The agreement setting up an escrow account at the Bank for International Settlements in Basel, Switzerland, was reached after an 11-hour session in London, said an e-mail signed by attorneys James P. Kreindler and Steven R. Pounian.

Under the deal, U.N. diplomats said, the Libyan government would complete transfer of the money today.

The Libyan government then would send a letter to the U.N. Security Council saying it had met the conditions for lifting sanctions by taking responsibility for the bombing, renouncing terrorism and paying compensation, the diplomats said. After that, they said, Britain would circulate a draft resolution to lift sanctions.

While the attorneys appeared confident that sanctions would be lifted quickly, U.N. diplomats were not.

That’s because Moammar Kadafi’s government agreed in 1999 to pay only $33 million to families of 171 people killed in the 1989 bombing of a French passenger jet over Niger. French diplomats stressed that the amount for each victim is much smaller than in the Lockerbie settlement.

Also, a U.S. official in Washington said the Bush administration was weighing whether to abstain or support the British-drafted resolution.

A U.N. resolution passed in 1992 banned arms sales and air links to Libya. The embargo has been suspended since Libya handed over two citizens for trial in 1999. U.S. sanctions remain.