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U.S.-Libyan Relations - 1998-2008 - The Thaw

By 1998, Libya and Qadhafi began taking steps to improve relations with the United States. On August 24, the United States and the United Kingdom proposed that the Libyan suspects in the Pan Am 103 bombing be tried in The Netherlands by Scottish judges under Scottish law. Qadhafi accepted the U.S.-British proposal, provided that there were no "hidden tricks." In November, the Government of Libya imprisoned three senior officials in its security services who were thought to be involved with the Pan Am 103 bombing, but still had not extradited the two Pan Am 103 suspects.

On February 20, 1999, Secretary of State Madeleine Albright declared that the United States would seek additional UN sanctions against Libya if an agreement was not reached about the surrender of the Pan Am 103 suspects within 30 days. On March 23, Colonel Qadhafi announced that suspects would be transferred to The Netherlands, and the suspects arrived at The Hague on April 5. The UN Security Council suspended its sanctions against Libya in April, and the trial of the two Pan Am 103 bombing suspects began. On January 31, 2001, the Scottish judges convicted al-Meghrabi and acquitted Fhima. Libya accepted the verdict, and stated that it expected UN sanctions to end. U.S. and British officials noted that Libya would first have to accept responsibility for the bombing and to compensate the victims' families. On August 3, 2001, President George W. Bush signed a 5-year extension of the 1996 Iran and Libya Sanctions Act.

After al-Qaeda's September 11, 2001 attacks on the United States, Qadhafi moved more quickly to improve U.S.-Libyan relations. He quickly condemned al-Qaeda's attacks. In October, U.S. and Libyan officials met in London to discuss Libya's compliance with UN Security Council resolutions about support for terrorism, and during the meetings, Libyan officials reportedly supplied information about Libyans involved with al-Qaeda. In May 2002, Libya agreed to compensate the families of the Pan Am 103 victims, and in August, Qadhafi announced the arrest of several al-Qaeda suspects. He said that Libya was no longer a "rogue state" and had now integrated its foreign policy with that of the African Union. In April 2003, Libya announced a formal plan to compensate the Pan Am 103 victims' families, and then in August, in a letter to the UN General Assembly, the Government of Libya accepted responsibility for its role in the Pan Am 103 bombing, announced the establishment of an escrow account in a Swiss bank for the victims' families, and promised that it would renounce terrorism. On August 18, representatives of the United States and Great Britain told the Security Council that they were prepared to end sanctions against Libya.

After the fall of Saddam Hussein, Libya made significant efforts to reincorporate itself into the family of nations. On December 19, 2003, President Bush and British Prime Minister Tony Blair announced that Libya had agreed to suspend its programs to develop ballistic missiles and weapons of mass destruction (WMDs). They said that Libya also had agreed to admit international inspectors to oversee removal and destruction of WMDs. The first inspectors arrived on December 27, and found that Libya's WMD programs were more advanced than anticipated. Libya ratified the 1996 Comprehensive Test Ban Treaty on January 14, 2004, and then signed the Chemical Weapons Convention on February 4. Libya further agreed to allow U.S. and British officials to supervise the dismantling of its nuclear weapons program, and the program's components were flown to the United States on February 27. On March 6, Libya shipped ballistic missiles and launchers to the United States, and admitted to the United Nations that it had produced 20 tons of mustard gas and put it into bombs during the 1980s. On March 10, Libya signed the Additional Protocol of the International Atomic Energy Agency (IAEA), which allowed surprise inspections of nuclear facilities.

With Libya's renunciation of its support for terrorism, admission of responsibility for the Pan Am 103 bombing, and agreement to provide compensation to the families of the Pan Am 103 victims, U.S.-Libyan relations moved quickly toward normalization. The United States opened an Interests Section in the Belgian Embassy in Tripoli on February 8, 2004. On February 26, the United States ended travel restrictions, allowed U.S. oil companies to resume operations in Libya, and permitted medical and educational exchange programs. Libya was also invited to open an Interests Section in Washington. Assistant Secretary of State for Near Eastern Affairs William Burns visited Libya to discuss further steps toward normalization on March 23-24. On September 20, 2004, President Bush signed Executive Order 13357, terminating the national emergency regarding Libya, ending U.S. economic sanctions, ending the freeze on Libyan assets, and authorizing the resumption of airline service. On May 15, 2006, Secretary of State Condoleezza Rice announced that the United States would restore full diplomatic relations with Libya. The U.S. Liaison Office in Tripoli and the Libyan Liaison Office in Washington were raised to Embassy status on May 31. In April 2007, Deputy Secretary of State John D. Negroponte visited Libya to discuss the crisis in Darfur and other regional issues with Foreign Minister Abdel Rahman Mohammed Shalgam. On October 7, without U.S. opposition, Libya was elected to a 2-year term on the UN Security Council.

Further improvements in U.S.-Libyan relations occurred. On August 4, 2008, President Bush signed into law the Libyan Claims Resolution Act. The law states that when the Secretary of State certifies that the United States has received sufficient funds to pay the Pan Am 103 and La Belle Discotheque settlements, and to provide fair compensation for American deaths and physical injuries in other cases against Libya, Libya's immunity from terrorism-related court actions will be restored. Ten days later, the United States and Libya signed the Comprehensive Claims Settlement Agreement, which provides for rapid recovery of fair compensation for U.S. nationals with terrorism-related claims against Libya, and addresses Libyan claims arising from previous U.S. military actions.