February 17, 2004 - 10:45 PM

U.S. to ease some Libya restrictions

By Adam Entous and Arshad Mohammed

WASHINGTON (Reuters) - The Bush administration
is expected to lift travel restrictions on Libya
next week and is considering providing humanitarian
and eventually other types of aid as a reward for
dismantling its weapons programmes, people involved
in the deliberations say.

With ties warming rapidly, the administration
has told key lawmakers that it intends to take the
first tangible step toward easing its sanctions on
Libya by lifting restrictions on the use of U.S.
passports for travel to Libya. An announcement is
expected by February 24, when the measures come up
for review.

The administration is expected at the same time
to ease sanctions under the International Emergency
Economic Powers Act, to allow U.S. citizens to
spend money should they visit Libya.

The United States could also ease the way for
the sale of medical supplies to upgrade the
country's hospitals, congressional sources said.

The administration is considering sending
evaluation teams in areas such as health care to
see how the United States might help Libya, and it
may seek waivers under existing sanctions to
provide medical equipment and supplies.

Administration officials are also discussing
with key congressional committees the possibility
of providing development assistance to Libya,
though dollar amounts remain in flux, the
congressional sources said.

The aid -- which could come in the form of
grants or trade assistance -- could help develop
the country's oil sector. One option would provide
a small upfront "down payment" in U.S. aid with
more to come later, but sources said the
discussions were only preliminary.

Libya is eager to bring U.S. companies back,
especially in the oil industry, its main source of
foreign earnings.

It is unclear whether Libya could qualify for
direct development assistance, and the
administration would have to take several steps
first, including lifting trade sanctions and
removing Libya from its list of state sponsors of
terrorism.

EXAMPLE TO FOLLOW

Bush has seized on Tripoli's pledge to abandon
its weapons of mass destruction programs as an
example for other countries, including North Korea
and Syria, to follow.

A senior Bush administration official denied
any "quid-pro-quo," whereby Libya gives up its
weapons programs in exchange for specific economic
concessions from Washington.

"At this point the administration is pleased by
Libya's cooperation," the official said, adding:
"Continued movement on that issue ... would lead to
improved relations with the United States."

Washington has already re-established a
diplomatic presence in Tripoli after more than 20
years and said Libyan diplomats would set up in
Washington soon.

"It's clear we have to do something (tangible)
for them," one senior congressional aide said.
That, he added, could help "seduce the Syrians" to
cooperate on its weapons programs.

"It's a carrot for discussion, not a carrot for
delivery," one aide said of development assistance.

Unless Washington drops Libya from its state
sponsors of terrorism list and ends its bilateral
sanctions by April, Libya is entitled under a
compensation deal reached last year to halve the
$10 million (7 million pounds) payout it has
promised relatives of each victim of the 1988
Lockerbie airliner bombing. However, that deadline
can be extended if Libya and the relatives agree.

Administration officials would not say how fast
the United States would be willing to act. To keep
pressure on Tripoli to cooperate, congressional
sources said Bush was likely to only gradually lift
the ban on direct trade and U.S. imports of Libyan
crude oil.