On Friday, February 25, 2011 President Obama issued an Executive Order blocking property and prohibiting certain transactions related to Libya. The presidential action came following a deterioration of the security situation in Libya, where "Colonel Muammar Qadhafi, his government, and close associates have taken extreme measures against the people of Libya, including by using weapons of war, mercenaries, and wanton violence against unarmed civilians." The Executive Order also noted "a serious risk that Libyan state assets will be misappropriated by Qadhafi, members of his government, members of his family, or his close associates if those assets are not protected."

The Executive Order blocks all property and interests in property that are in the United States or in the possession or control of a U.S. person, including U.S. financial institutions of Qadhafi, his daughter Ayesha and his sons Khamis, Mutassim and Saif Al-Islam. It also authorizes the Secretary of the Treasury to designate additional persons, including senior officials of the Government of Libya and their families as well as those responsible for human rights abuses related to political repression. In addition, all property and interests in property of the Government of Libya and its agencies, instrumentalities and controlled entities, including the Central Bank of Libya, are blocked.

The same day the Office of Foreign Assets Control within the United States Department of the Treasury published a notice designating Qadhafi and his children as "specially designated nationals," and also issued a general license that authorized transactions with financial institutions owned or controlled by the Government of Libya, provided those financial institutions are organized under the laws of a country other than Libya. See General License No. 1, Authorizing Transactions Related to Third-Country Libyan-Owned or Controlled Banks.

Also, on Saturday February 26, 2011 the United Nations Security Council adopted a resolution that imposed financial sanctions against Qadhafi and members of his family involved in or complicit in ordering, controlling, or otherwise directing, the commission of serious human rights abuses against persons in the Libya, including by being involved in or complicit in planning, commanding, ordering or conducting attacks, in violation of international law, including aerial bombardments, on civilian populations and facilities; or acting for or on behalf of or at the direction of such persons. UNSCR 1970 (2011). This resolution came into force at 5:15pm on Sunday, February 27, 2011.