MISC 80: Letter to the Chairman from the Secretary of State

for Foreign and Commonwealth Affairs

LIBYA AND VICTIMS OF TERRORISM

Thank you for your letter of 28 October regarding the issue of compensation for victims of Libyan-sponsored IRA terrorism. I am grateful for the Committee's willingness to grant an extension to its original 1 December deadline allowing my officials to complete a full search of the records held by the Foreign and Commonwealth Office.

I welcome the Committee's interest in this difficult and sensitive matter and in our relationship with Libya.

The UK has worked hard to develop a strong relationship with Libya since the restoration of diplomatic relations in 1999. The restoration of relations was made possible by Libya's decision to surrender for trial the two Lockerbie suspects, and its commitment to payment of compensation to the families of the victims of the bombing of Pan Am flight 103 over Lockerbie in the event the accused were found guilty. Libya's acceptance of general responsibility for the murder of WPC Fletcher and its agreement to pay compensation to her family in July 1999, as well as its accounting in 1995 to the then Government, for the level of support it had provided to the Provisional IRA, were also key steps prior to the resumption of diplomatic relations.

The UK has since been at the forefront of international efforts to persuade Libya to re-enter the international community, by renouncing its support for international terrorism and abandoning the pursuit of Weapons of Mass Destruction in 2003. Together, these historic decisions have paved the way for a fundamental transformation in UK-Libya relations and made visits by the then Prime Minister, Tony Blair possible in March 2004 and again in May 2007.

Despite difficult and painful memories of the past, the UK and Libya have now established mutually beneficial relations leading to important co-operation in many fields such as health, education, science, policing, energy and economic and financial reform. A significant factor in our relationship is our bilateral cooperation in the fight against terrorism. It is in the interests of the United Kingdom, that we and Libya continue to intensify that co-operation.

In your letter of 28 October the Committee asked a series of specific questions in relation to compensation for victims of IRA terrorism from Libya, on account of its past financial and material support to the Provisional IRA. My colleague Bill Rammell also addressed questions on this matter in a Westminster Hall debate on 22 October and both FCO Ministers and indeed the Prime Minister have addressed a number of Parliamentary questions and letters from members of the public in recent months. I would like to assure the Committee however that I have considered this matter very carefully.

The conclusion of the Government is that Libya has already answered questions put to it by the UK Government about its support for the IRA. This was confirmed in writing to the United Nations Secretary-General in November 1995. Libya, for its part has made it clear to us that it considers the matter closed and that it will not entertain a bilateral compensation agreement with the UK in respect of victims of IRA terrorism. This is crucial, given that it was Libya itself that initiated negotiations with the United States in respect of a bilateral settlement agreement.

Nevertheless, we have taken regular soundings on Libya's position since the restoration of diplomatic relations, notably in 2004, 2006 and most recent in November 2007, and through the United States earlier this year. On all occasions, Libya has stressed that they believe the matter is firmly closed. It is the Government's considered assessment that Libya would not be prepared to discuss a bilateral settlement of these cases, and were we to pursue a settlement this would entail considerable risks for the bilateral relationship. This course of action might also entail possible linkage to an unenforced Libyan court judgement against the UK in respect of our role in the US airstrikes against Tripoli and Benghazi in 1986.

The Committee will know that the UK's relations with Libya have been fundamentally transformed in recent years. Libya has dismantled its weapons of mass destruction programme and renounced its support for international terrorism. With the support of the UK Government, Libya has now returned to the international community and has become a vital partner for the UK on a wide range of issues including terrorism and energy security.

I want to underline that in drawing these conclusions the Government in no way underestimates the pain and suffering caused by the IRA's actions, nor does it in any way condone Libya's past financial and material support for the IRA.

The annexed memorandum aims to address the Committee's specific questions directly.

8 December 2008

MEMORANDUM FOR THE FOREIGN AFFAIRS COMMITTEE: LIBYA AND VICTIMS OF TERRORISM

What formal bilateral agreements form the basis for the present diplomatic, trading and other links between the UK and Libya? Are any bilateral negotiations between the two countries currently under way or anticipated?

The UK and Libya have built a modern, mutually beneficial relationship that involves co-operation on many levels including in the fields of energy security, health, education, trade and most importantly in the fight against terrorism.

The UK has signed a number of legally binding agreements with Libya. The most recent agreements were signed on 17 November 2008, when the UK and Libya signed four judicial agreements governing prisoner transfer, civil and commercial matters, extradition and mutual legal assistance in criminal matters in accordance with a memorandum of understanding concluded between the then Prime Minister, Tony Blair and the Libyan Prime Minister in May 2007. The UK and Libya also signed a Double Taxation Agreement to enhance transparency between taxation regimes and reduce tax compliance burdens for UK investors in Libya and vice versa.

A full list of all formal bilateral agreements between the United Kingdom and Libya is attached at Annex A.[1]

The UK and Libya are also in the final stages of negotiating an agreement to protect and promote investment helping both UK and Libyan businesses.

In addition the relationship is assisted by a number of MOUs that have been signed by our two countries. The UK and Libyan Governments signed a Memorandum of Understanding (MOU) on Deportation with Assurances (DWA) on 18 October 2005. At this time, the UK government is not pursuing the deportation of individuals under this agreement. The two Governments have also concluded an MOU in Scientific and Technological Collaboration signed in March 2007 and a Defence Accord signed in May 2007.

The UK strongly supports ongoing negotiations between the EU and Libya aimed at concluding an EU-Libya Framework Agreement. Once concluded the Agreement will provide a platform for cooperation between the EU and Libya on a wide ranging issues including energy security, irregular migration, trade, counter terrorism, education and human rights. It is also anticipated that the Framework Agreement will provide for an EU-Libya Free Trade Agreement, which the UK supports.

Is it the case that HMG did not pursue the issue of compensation for IRA victims when, as part of the process of rapprochement with Libya, it raised the issues of compensation for Lockerbie victims and the family of WPC Fletcher? If not, why not?

Diplomatic relations were severed following the murder of WPC Fletcher in July 1984 and the bilateral relationship deteriorated further following evidence of Libya's complicity in the bombing of Pan Am 103 over Lockerbie in December 1988 and its support for the Provisional IRA.

UN Security Council Resolution 731 of January 1992 urged the Libyan Government to respond effectively to requests to cooperate fully in establishing responsibility for the bombing of Pan Am flight 103. Under the terms of UN Security Council resolution 748 of March 1992, (which was legally binding under Chapter VII of the UN Charter), and later resolutions, Libya was required to respond to the requests of the UK and the US in relation to the Lockerbie bombing, including that Libya compensate the victims and their families. Resolution 748 also required Libya 'to commit itself definitively to cease all forms of terrorist action and all assistance to terrorist groups and that it must promptly, by concrete actions, demonstrate its renunciation of terrorism.' While Libya's support to the IRA was not explicitly mentioned in the UN Security Council Resolutions, it was under this latter requirement of Resolution 748 that the UK sought answers from Libya on the extent of its support for the IRA.

In the judgement of the then Government these questions were answered to its satisfaction following a round of exchanges between the UK, Libya and the UN Secretary-General in which Libya clarified the extent of its support for the IRA. On 20 November 1995, the UK Permanent Representative to the United Nations wrote to the UN Secretary General informing him that while there 'remain gaps and omissions in the information [provided by Libya], when the Libyan disclosures are considered in their entirety, we are satisfied that they have largely met our expectations.' The letter went on to acknowledge that the UK's questions in relation to Libya's support of the IRA had been answered.

Diplomatic relations between the UK and Libya were resumed in July 1999 after Libya handed over for trial the two suspects wanted in connection with the Lockerbie bombing and agreed to pay compensation to the families of the victims were the suspects found guilty.

In contrast to the requirement under various UN Security Council Resolutions (under Chapter VII of the UN Charter) that Libya pay appropriate compensation to the families of victims of Pam Am flight 103, no such legal requirement to pay compensation existed in relation to Libya's support to the IRA. There are also further material differences between the Lockerbie and Fletcher cases, and Libya's support to the IRA. As regards Lockerbie, the imposition of this requirement followed a criminal investigation into the bombing and the issue of warrants for the arrest of the two suspects by the Scottish and US authorities. In 2001, Abdelbasset Al-Megrahi was convicted of the bombing by a Scottish Court in the Netherlands. His appeal was refused in 2002, and in 2003 the Libyan government and the families of the Lockerbie victims agreed on compensation. As regards the payment of compensation in relation to the death of WPC Fletcher in 1999, this was preceded by an inquest into her death which concluded that Libyan nationals responsible were for her murder.

No such legal findings or settlement pertained to the supply of arms by Libya to the IRA existed prior to the resumption of diplomatic relations with Libya in 1999, and there was no requirement either internationally or bilaterally that Libya should pay compensation. The files held by the Foreign and Commonwealth Office indicate that no request was received by the Government to pursue such compensation from Libya for victims of IRA terrorism prior to the resumption of diplomatic relations. There is also no indication that this issue was considered within the Foreign and Commonwealth Office prior to the restoration of relations in 1999.

In 1995 Libya acknowledged its past connections with the IRA. Has the UK Government raised with Libya at any time or in any forum since then the question of compensation for victims of IRA terrorism? If so, when, in what terms and what was the response of the Libyan government?

The UK Government raised the issue of Libya's support to the IRA on 10 February 2004 when the then Secretary of State for Foreign Affairs, Jack Straw met the Libyan Secretary for Foreign Liaison, Abdulrahman Shalgam. FCO records are not clear on exactly the terms in which the issue was raised, but our files indicate that it did not include a request for compensation. It is likely that the issue was raised in order to clarify further, if possible, the extent of Libya's support to the IRA.

Libya's support for the IRA was subsequently discussed on 15 February 2004 between HM Ambassador to Tripoli and Libyan Ambassador to the UK, Zwai and and European Affairs Minister, Obidi. While the issue of compensation was not discussed, Libya made it clear that it considered the issue of its support to the IRA to have been closed in 1995 when Libya had accounted for its actions and the UK had written to the UN Secretary General to this effect.

The UK again raised the issue with Libya in April 2006 following the lodging of a class action in US courts (the so-called McDonald case) with the aim of establishing Libya's views on these cases. Libyan officials again reiterated their previous message that they considered the issue closed. Libya also made clear that UK Government involvement in the cases was not welcome.

In November 2007 HM Ambassador to Tripoli raised the issue of the cases in US courts again. Once again, Libya made it clear that they considered the issue closed, noting that the cases were before US not UK courts.

When it became clear in May 2008 that the US and Libya were proceeding with negotiations on a bilateral agreement to settle outstanding claims, the UK made representations to the US seeking inclusion of all UK claimants in respect of the McDonald case (ie the existing claims before US courts against Libya for its past sponsorship of IRA terrorist acts), in the list of recipients of compensation. Although the US concluded that it could not included the non-US claimants in the compensation arrangements agreed with Libya, US raised the issue of settling the claims of UK nationals during its negotiations with the Libyans. Other than settling the outstanding payments to families of British victims of Pam Am flight 103, the Libyans said they would focus only on US claims in the settlement.

Mr Rammell stated that "the UK Government made a number of diplomatic representations urging the US Government to include, on the list of recipients of any compensation package, UK claimants who had brought cases in the US against Libya", but that, "regrettably it did not prove possible for the UK claimants to be included in the US-Libya agreement" (HC Deb, 22 October 2008, Col. 98WH). Does the Government accept that those claimants have a moral case for compensation from Libya?

The Government recognises that it is essential to acknowledge and address the suffering of all the victims of violence, as a necessary element of the process of reconciliation in Northern Ireland. Nearly four thousand lives were lost as a result of the Troubles and thousands more were injured or suffered in other ways. That is why the UK Government has invested more than Ł20 million in victims' initiatives since 1998, including providing financial support for victims' groups and the establishment of the Northern Ireland Memorial Fund to which individuals can apply for help. In addition, the Northern Ireland Executive, which has devolved responsibility for matters relating to victims issues, along with non-Governmental community based organisations, have undertaken significant steps to provide of support and services for victims of the Northern Ireland Troubles.

It is against this backdrop that the Government has consistently taken the view that the claims lodged by a number of victims of IRA terrorism and their families in the US courts against Libya, the so-called McDonald claims, are a private matter for the claimants involved.

Notwithstanding this position, the Government did act when it became clear that negotiations between the US and Libya on a bilateral claims settlement agreement were likely to exclude from the recipients of compensation those UK claimants with existing claims before US courts against Libya. The Government concluded that while the legal claims were a matter for the families involved, given the strength of feeling involved, it would be appropriate for the Government to make representations to the US Government seeking the inclusion of those UK claimants in the recipients of any compensation package.

The Committee will already know that despite our efforts, it did not prove possible to include UK claimants as recipients of compensation in the US-Libya Compensation Agreement (apart from the families of the Lockerbie victims, for whom the agreed compensation represented the final tranche in the original compensation agreed with Libya in 2003). We understand from the US Government that a key reason for this was its view that international and US law did not permit the US Government to espouse the claims of foreign nationals. We also understand from the US that it believed that the claims would not succeed, if they ever came to court, on jurisdictional grounds as well as substantive grounds. Furthermore, we understand from the US Government that it raised with Libya the issue of settling UK claims during its negotiations with Libya, but that other than providing outstanding compensation to the families of British Lockerbie victims, Libya only wanted to focus on US claims in the settlement.

Mr Rammell also stated that "the Government considered [...] very carefully at length and on a number of occasions" whether to open bilateral negotiations with Libya "to seek compensation for the British victims of Libyan-sponsored IRA terrorism", but had rejected that option (HC Deb, 22 October 2008, Col. 98WH). Please give details of each of the occasions on which this issue was addressed within the Government; in each case, what prompted the issue being re-opened?

The records held by the Foreign and Commonwealth Office indicate that the first occasion that the issue of compensation was raised with the Government was in September 2002 when an Ulster Unionist member of the Northern Ireland Assembly, Sir Reg Empey, wrote to Mr Mike O'Brien, then Parliamentary Under Secretary asking if compensation had been raised during his visit to Libya the previous month. While the issue of Libya's support for the IRA was raised there is no record of compensation being mentioned during the visit. Mr O' Brien responded to Sir Reg Empey's letter in October 2002 by noting that a range of bilateral issues had been discussed with Libya including terrorism, but that in regards to compensation there were structures in place to support the victims of IRA violence.

Detailed consideration was given to the Government's position on question of compensation to victims of Libyan-sponsored IRA terrorism between April and June 2004 following Parliamentary questions directed at the Northern Ireland Office Ministers.

Consideration was again given to this issue in March 2006 following the lodging of a class action, the so-called McDonald case, in US courts. The Government decided to raise the matter with the Libyan government in order to ascertain its reaction. As set out above, Libyan officials reiterated their previous message that they considered the issue closed. Libya also made clear that UK Government involvement in the cases would not be welcome.

Further consideration was given to the issue in March 2007 following a meeting between a representative of H20, the legal firm representing victims of IRA attacks who had lodged cases in US courts, and FCO officials. H20 requested Government involvement in working towards a settlement between the plaintiffs and Libya. This was considered by the Government, but it was decided that the litigation was essentially a private matter for the claimants involved and that it was clear that Libya considered the matter closed. Jim Murphy, then Foreign and Commonwealth Office Minister of State responded in September 2007 informing H20 of the Government's decision not to intervene in the legal proceedings.

Following correspondence from Families Acting for Innocent Relatives (FAIR) to the Prime Minister and a meeting in November 2007 between FAIR representatives and Paul Goggins, Minister of State for Northern Ireland, the issue of compensation was addressed once again by the Foreign and Commonwealth Office and Northern Ireland Office.

In December 2007 the issue was again raised by FAIR and H2O with the FCO Minister of State, Dr Howells. Dr Howells made it clear that Libya considered the matter closed. Therefore any approach to Libya would be unlikely to succeed.

In July 2008 the Minister of State, Dr Howells and the Foreign Secretary considered the issue of UK claimants in further detail when it became clear that negotiations between the US and Libya would potentially bar UK claimants from bringing their claims in respect of terrorist related action before the US courts, whilst also excluding them from the compensation arrangements. Notwithstanding the Government's position that the claims were essentially a private matters for the individuals involved, the Government decided that it would be appropriate to make representations to the US Administration in order to attempt to include UK claimants in respect of the McDonald case, in the compensation agreement. In the event this proved not to be possible.

Have all UK victims of Libyan-sponsored IRA terrorism received compensation from the UK Government?

The papers held in the Foreign and Commonwealth Office provide details of 141 UK nationals with claims in US courts against Libya as part of the McDonald class action. This number is clearly a small proportion of those injured or killed as result of the Troubles. It is not possible to establish a figure for the number of UK nationals that were injured or killed by the IRA as a result of the assistance provided by Libya. However of the 141 UK citizens of whom we have details, according to the Compensation Agency in Northern Ireland and the Criminal Injuries Compensation Authority, a minimum of 31 claimants have been paid compensation.

The Compensation Agency in Northern Ireland (an executive agency of the Northern Ireland Office established in 1992) has paid compensation to a minimum of 20 of the individuals named in the class action. It is likely that a further 16 compensation claims from individuals named in the class action have been made and paid. However the Agency cannot confirm the exact figures as many of the cases precede 1988, prior to which the original files have been destroyed as required by law. Additionally, much of the data held by the Agency is personal information which it has no right to hold once a claim has been dealt with. All of those listed in the class action who did not claim are now out of time (the statutory time limit applies).

The Compensation Agency in Northern Ireland has no record of having received any claims from 52 of those named in the class action that are noted as resident in Northern Ireland, suggesting that in many cases applications for compensation have not been made. In addition, in some cases the named individuals in the class action appear to include family members of some of those who did make claims.

In Great Britain, claims for criminal injuries are dealt with by the Criminal Injuries Compensation Authority. They have confirmed that applications were received from 11 of the individuals named in the McDonald class action (in relation to incidents which took place in Great Britain), all of which were successful. However, as the computer system only has records as far back as 1992 it is possible that the figure could be greater.

Is it proposed that Colonel Qadhafi should pay an official visit to the UK, and if so, when? If such a visit takes place, will the Government raise the issue of victims of IRA terrorism with him?

Muammar Qadhafi was invited to attend an Energy Summit of Heads of State and Government in December, following on from the energy meeting held in Jeddah in June that the Prime Minister attended. The Prime Minister has subsequently decided to focus efforts by revising the meeting to a Ministerial rather than a Summit of Heads of State and Government. We therefore anticipate that Dr Shokri Ghanem, Libya's Energy Minister will represent Libya. Should Colonel Qadhafi visit the UK in the future we expect that a whole range of bilateral issues will be discussed.

8 December 2008

[1] Not published.