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Latest update : 2008-05-31

Libya and the United States opened negotiations to resolve claims related to terrorism acts sponsored by the country, including the 1988 Lockerbie bombing. Libya has already paid $8 million for each victim of the plane bombing. (Story: R. Tompsett)

WASHINGTON, May 30 (Reuters) - The United States and Libya
have agreed to try to resolve compensation claims from the 1988
Lockerbie bombing and other incidents Washington views as acts
of terrorism by Libya, the State Department said on Friday.

The two governments this week opened negotiations seeking
to lay to rest events that have bedeviled relations for decades
despite the improvement in ties after Libya's 2003 decision to
abandon its pursuit of weapons of mass destruction.

"Representatives of the United States and Libya met in
London May 28-29 to begin negotiations on a claims settlement
agreement," the two countries said in a joint statement issued
by the State Department.

"Both parties affirmed their desire to work together to
resolve all outstanding claims in good faith and expeditiously
through the establishment of a fair compensation mechanism."

Two people familiar with the matter who asked not to be
named said one idea that has been discussed would be the
creation of a global compensation fund to pay families of the
American victims of the incidents.

These include the bombing of Pan Am Flight 103 over
Lockerbie, Scotland, in 1988, which killed 270 people,
including 189 Americans, and the 1986 bombing of a West Berlin
disco in which two U.S. servicemen were killed.

Libya, which was implicated in both incidents, agreed to
pay the families of the Lockerbie victims $10 million per
victim. It has paid out $8 million per victim but has not made
the final payment of $2 million.

A senior U.S. official said Libya had sought the global
settlement talks out of concern about U.S. legislation that
gave terrorism victims greater ability to collect damages from
governments like Libya by having their assets frozen.


In addition, a U.S. judge in January ordered Libya to pay
billions of dollars in damages to relatives of Americans killed
in a 1989 suitcase bombing of a French airliner over Niger.

The U.S. official said that there were about eight other
incidents involved in addition to those of Lockerbie, the
Berlin disco and the French airliner but he did not provide

The legislation and the January ruling angered Libya, which
says it is being punished rather than rewarded for giving up
its weapons of mass destruction program, a move that led to a
thaw in relations.

In addition, U.S. companies seeking to trade with the North
African country say they are unable to do so because of fear of
lawsuits that could be slapped on them by Americans seeking to
freeze Libyan assets.

"They (the Libyans) became concerned ... and they came to
us to suggest a new way to expedite resolution of all of the
cases through a comprehensive settlement agreement," said the
U.S. official, who asked not to be named.

He said Washington hoped to resolve the issues "in the
shortest possible time" and with greater certainty than court
cases and settlement talks, which have dragged on for years.

Jim Kreindler, whose law firm represents 130 of the
Lockerbie victims and who chairs the plaintiffs' committee of
lawyers in the case, said he was pleased by the governments'
decision to open talks, but that his clients would insist on
being paid the full $2 million they believe they are owed.

"All of the clients will be glad to accept a mechanism
where the U.S. government is involved in a global resolution
provided that ... results in the payment of the $2 million that
is owed," Kreindler said in an interview. "I don't think any of
the clients would accept a penny under $2 million."

Date created : 2008-05-31