U.N. to allow release of $1.5 billion frozen Libya funds (Reuters)

UNITED NATIONS (Reuters) ? The United States and South Africa struck a deal on Thursday to allow the release of $1.5 billion in frozen Libya funds for humanitarian aid and other civilian needs, U.N. diplomats said on Thursday.

U.N. Security Council diplomats said the agreement would enable the funds to be released without a vote by the council on a U.S. draft resolution that Washington submitted on Wednesday in response to South Africa blocking a U.S. request to disburse the money in the U.N. Libya sanctions committee.

The South African delegation said it did not support funds going directly to the Libyan rebel government, the Transitional National Council (TNC), which the African Union has not recognized. Pretoria insisted that there be no mention to the TNC in the official request for the release of the funds.

U.S. Deputy U.N. Ambassador Rosemary DiCarlo told reporters the South Africans "are lifting their hold now."

"The council has reached consensus on the package of $1.5 billion," she said, adding that the United States was "very pleased with the outcome."

A spokeswoman for the South African U.N. mission, however, said her delegation had told the United States that Pretoria would withdraw its objection to the release of the money "as long as there is no reference whatsoever to ... the TNC."

"Because if it's TNC, then it means that we are agreeing as the 15 collective council members to say yes to the TNC and we have not all recognized it," she told reporters.

Diplomats said the TNC would be involved in deciding how to use the money, even though the request no longer refers to the TNC specifically.

Another diplomat told reporters that the U.S. delegation had agreed to reword its August 8 request to the sanctions committee, enabling the South African delegation to back the release of the funds. U.N. sanctions committees make decisions by consensus, which means each council member has a veto.

The unfreezing of the funds was expected to become official later on Thursday, diplomats said.

The original request called for $500 million to go to international humanitarian organizations directly, with another $1 billion going to "third-party vendors supplying fuel and other urgently needed humanitarian goods" and an "international mechanism" for providing social services.

It explicitly called for the TNC to play a role in deciding how some of the money would be used, which was what South Africa insisted be removed from the request.

The U.S. request had said the money, currently frozen by the U.S. government on the basis of U.N. sanctions adopted earlier this year, was not to be used for military purposes.

Russia and China, which for months have been reluctant to allow the council to do anything that would help the rebels, did not formally object to the idea of releasing the funds to the rebels this week.

(Additional reporting by Patrick Worsnip; Editing by Anthony Boadle)

Source: http://us.rd.yahoo.com/dailynews/rss/world/*http%3A//news.yahoo.com/s/nm/20110825/wl_nm/us_libya_un

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