Analysis: Libya pays a price

By Paul Reynolds BBC News Online world affairs correspondent

The lifting of UN sanctions means that Libya has largely, though not wholly, emerged from its long period of international isolation.

Given what has just happened to Iraq's Saddam Hussein, Colonel Muammar Gaddafi can reckon himself fortunate to have got away with, in effect, a fine.

Libya is trying to repair international relations

One of the suspects was found guilty and the other released.

The formal removal of these sanctions will help Libya's new policy of trying to repair its external relations.

However, bilateral American sanctions remain. These are a ban on trade, including oil, and penalties for non-US companies which invest more than $20m a year in Libya's oil industry.

'God curse money'

Washington still classifies Libya as a state sponsor of terrorism.

The US deputy ambassador James Cunningham said that the vote "must not be misconstrued by Libya or by the world community as tacit US acceptance that the government of Libya has rehabilitated itself".

"The United States continues to have serious concerns about other aspects of Libyan behaviour including its poor human rights record, its rejection of democratic norms and standards, its irresponsible behaviour in Africa, its history of involvement in terrorism and most important, its pursuit of weapons of mass destruction and their means of delivery," he said.

Colonel Gaddafi claimed recently that Libya had in effect bought off the US and Britain.

In a novel diplomatic defence, he said: "God curse money. With money we defend our country."

Libya also had to make an acknowledgement of guilt and it did so by "accepting responsibility for the actions of its officials," which is not quite same thing but near enough and importantly it did not mention the colonel himself.

French get less

Libya remains a major oil producer. It is seventh in the Opec oil cartel's top 10 and is currently producing slightly over its Opec quota.

UN SANCTIONS Imposed in 1992 and 1993 Forbade aircraft movements to or from Libya unless UN approved Banned sale of aircraft equipment/parts Halted operation of Libyan Arab Airlines office abroad Banned sale of arms, military equipment Limited diplomatic staff in Libya Froze Libya's assets abroad Banned the sale of oil-related equipment Suspended in 1999

Lockerbie will cost it $2.7bn, divided among the 270 families, though not all will be paid if the American sanctions are not lifted within six months.

Libya will pay the French far less. France did not follow the same determined track as the Americans and British and handed the issue over to the French courts.

In 1999 a Paris court ordered a payment of only $33m for the 170 people killed in the UTA bombing but the French Government now has the promise of more. How much more is not yet clear.

A figure of $1m per victim has been suggested in the French press which would compare with at least $5m for each Lockerbie family.

French legal action against Libyan officials, several of whom were found guilty in their absence by the French court in 199, will be dropped.

The $1m figure was described as "totally inadequate" by Francoise Rudetski of the French victims association.

But at this stage, the deal appears to have been done and Libya has little incentive to pay more.

Colonel Gaddafi can get on with putting forward his solutions to the problems of the world, which he does with regularity on his own website.

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