On Friday 16 September 2011, the United Nations (UN) Security Council adopted Regulation 2009 (2011), which paves the way for further lifting of economic sanctions against Libya, most notably by removing the Libyan National Oil Corporation and Zuietina Oil Company from the sanctions list.1 In addition, it modifies the asset freeze on the Central Bank of Libya, the Libyan Arab Foreign Bank, the Libyan Investment Authority and the Libyan Africa Investment Portfolio, and entities they own or control. These financial institutions are now permitted to enter into new financial transactions as of 16 September 2011 with no restrictions. The previously frozen assets of these financial institutions and the entities that they own or control will remain frozen, but Member States of the UN may issue licenses of exemption for those frozen assets upon consultation with the Libyan authorities and notification to the UN Sanctions Committee for:

  • humanitarian needs;
  • fuel, electricity, and water for strictly civilian uses;
  • resuming Libyan production and sale of hydrocarbons;
  • establishing, operating, or strengthening institutions of civilian government and civilian public infrastructure; or
  • facilitating the resumption of banking sector operations, including to support or facilitate international trade with Libya.

The Resolution 2009 (2011) also indicates that the remaining restrictive measures against these financial institutions will be continuously reviewed and eventually fully lifted "as soon as practical." Although the UN Security Council resolutions are binding on its Member States, they do not have effect in the EU or the U.S. automatically.

In the field of economic sanctions, the Member States of the EU have implemented the UN sanctions against Libya collectively through Council Regulation 204/2011. Therefore the changes set out in Resolution 2009 (2011) will not take legal effect in the EU until Council Regulation 204/2011 has been amended. It is expected that the Council of the EU will adopt the necessary amending legislation to implement Resolution 2009 (2011) shortly.

In the meantime, the EU continues to lift sanctions against Libyan entities targeted autonomously within the framework of its Common Foreign and Security Policy. On 17 September 2011, the Council of the EU removed the Libyan national carrier Afriqiyah Airways from the list of targeted entities.2 The other Libyan carrier, the Libyan National Airlines, was delisted at the beginning of September, amongst the first 28 Libyan entities to be delisted under the EU's autonomous sanctions regime.

The United States Treasury Department's Office of Foreign Assets Control (OFAC) also has taken steps to ease U.S. economic sanctions against Libya in light of the UN regulations. On 19 September 2011, OFAC issued a general license authorizing all transactions involving the Government of Libya, its agencies, instrumentalities and controlled entities, and the Central Bank of Libya, with the exception of certain property previously blocked, which remains frozen, and transactions involving certain persons who continue to be named as specially designated nationals (e.g., Colonel Gaddafi and certain members of his family and close associates). U.S. authorities also issued a general license authorizing transactions with certain Libyan oil industry entities, provided that the transactions do not involve any other persons whose property is blocked, and subject to certain reporting requirements.