MS. FULTON: Okay. Thank you, and thanks, everybody, for joining us on such short notice. With the recent action in the UN to release frozen Libyan funds, we thought it would be useful to have some of our senior State Department officials speak with you about that action and take – just elaborate on it a little bit more.
This call will be conducted on background with attribution to Senior Administration Officials, but for the purposes of your records, we have speaking today [Senior Administration Officials]. So at this time, I’m going to turn it over to Senior Administration Official Number One, and we will take your questions following a short readout.
SENIOR ADMINISTRATION OFFICIAL ONE: Thanks very much, Heide. Welcome, everybody. Sorry to keep you waiting. As you know, the UN Sanctions Committee about an hour and a half ago did approve the U.S. request to unfreeze 1.5 billion in U.S.-held Libyan frozen assets. We spoke earlier today on the record about the three baskets of 500 million each that that funding will be appropriated under. We can talk more about that afterwards if you’d like. But we wanted to give you a little bit of the feeling of how this diplomacy went over the last few weeks.
So first, just to say that before we presented this proposal to the UN Sanctions Committee, we spent a number of weeks, primarily Chris Stevens in Benghazi, but also supported by Assistant Secretary Feltman, Ambassador Cretz, and the Secretary herself in her meetings with the TNC; working with the TNC to refine their proposal; to understand their needs; and to build in the kinds of assurances that we needed and we knew that other members of the sanctions committee were going to need, with regard to a commitment that this money, and assurances, that this money would only be used for humanitarian and civilian needs -- that there would be no ability or desire to use it for military or lethal purposes; that it would be completely transparent to everyone, including in the international community, how this money was going to be spent, and to bundle it in the baskets that you saw us present earlier today from the podium.
So by the time we got to the sanctions committee to formally present the proposal on August 8th, we had worked it through with the TNC, they had sent to the Secretary a letter in writing outlining all of the plans for the money and the baskets and the plans that we talked about today. We were able to then present that to the sanctions committee members. There were, as you can imagine, lots of questions, even from our close allies at the beginning who had to work through their own understanding of how we came to the proposal, how the TNC would use the money to reassure themselves of the transparencies.
About a week and a half ago, we were good to go, except for a few holdouts. There has been some reporting on who they were. The remaining concerns generally either had to do with reservations that sanctions committee members had with regard to the standing of the TNC – not all of the sanctions committee members had taken the steps that we had already taken to recognize the TNC as a legitimate governing authority in Libya – and also to reassure themselves that the vehicle that we were trying to use under the sanctions committee rules, the extraordinary exemptions, was appropriate in this circumstance. There were some countries that were willing to do some of the humanitarian, but not the fuel, et cetera.
The Secretary swung into action, Assistant Secretaries Feltman, Blake, others were called on to support the work that Susan Rice and the rest of the U.S. team in New York were doing with delegations to help explain and reinforce, and make clear that we felt the need was urgent, that the TNC had to start paying its bills, had to start providing for its own people, not only to establish its legitimacy and bona fides, but also to establish its track record as a clean, democratic, transparent organization.
Came down to this week; we had one remaining holdout, which was South Africa. The Secretary called Foreign Minister Mashabane yesterday and stressed the urgency, stressed the transparencies, the assurances that we had had from the TNC. And at the same time, as you know, we made clear both in New York and in capitals, that if sanctions committee members were not prepared to support this use of the extraordinary exemption, that we would take the question to the UN Security Council. And we participated in the drafting of a resolution, got it in final, and had that ready to go.
It was at about – what, [Senior Administration Official Two], 3:00 this afternoon that we finally heard from the South – the initial South African position was that they would support some of the money, the humanitarian’s first basket but not the rest. But I think a combination of the fact of the Secretary’s personal pressure, the fact that they had a better understanding through her diplomacy and diplomacy in New York of how the money was going to be used, and appeals that other countries made to them, including countries in their region and that the TNC made personally, they came off the fence and they obviously didn’t want to see the methodology of the sanctions committee undercut. So that is how we get to today’s happy news, and we can go back, if it’s of interest to you, to the three baskets, but we did describe them today during the briefing.
Why don’t we go – why don’t we pause there and go to your questions.
OPERATOR: If you have a question, please press *1 on your touchtone phone. Please unmute your phone and record your name at the prompt. That’s *1 if you have a question; *2 will withdraw your request.
Our first question comes from Josh Rogin. Go ahead, sir. Your line is open.
QUESTION: Thank you so much for doing the call. I understand that the TNC was removed from the text of the item and replaced with, quote-un-quote, “relevant authorities.” I also understand that your argument is that makes no difference, but if it makes no difference, why is that something that the South Africans wanted so badly?
Also, could you tell us what specific accountability and transparency measures will be applied to make sure that the TNC administers this money appropriately? And third, why do you call it the TNC when they seem to be calling themselves the NTC? Don’t they have the right to self-identify? Thank you.
SENIOR ADMINISTRATION OFFICIAL ONE: Okay. Thanks, Josh. First, on your last point – We spoke to this yesterday from the podium – the TNC, interestingly, in its own documents and statements, refers to itself sometimes as the TNC and sometimes as the NTC. So we’ve chosen to stick with the TNC, which they – again, using first and since they seem to use both as they self-identify.
You are correct that the last compromise that was made in the sanctions committee approval was to delete an explicit reference to the TNC and swap it out with a reference to the relevant Libyan authorities. This helped South Africa because it has not explicitly recognized the TNC itself, from a U.S. perspective, from the perspective of other partners on the committee, it doesn’t make a difference. And in fact, it’s slightly more flexible given the fact that we expect that in coming days and weeks, the TNC itself will transform into an interim governing authority in Libya, and will change its name when it expands and does that in keeping with its own roadmap.
Did I miss anything there?
QUESTION: Yeah. What specific transparency and accountability measures will be in place to follow this money and ensure that the TNC or NTC is up – using it appropriately?
SENIOR ADMINISTRATION OFFICIAL ONE: Well, as we discussed on the record earlier today from the podium, this money is allocated in three baskets. The first basket, to pay for UN agency support of $500 million. The second basket will pay existing fuel bills of the TNC and the Libyan people. And the third basket goes into the temporary financial mechanism to be drawn on for health, education, and social services.
In the first basket, humanitarian organization support, the money goes directly to the UN agencies who are providing the services. It doesn’t go through anybody’s hands other than the UN. In the second category, where we’re paying for the fuel, the vendor will be paid directly. And in the third category, the money is going into the mechanism that was created by the Contact Group, the temporary financial mechanism, which is managed with a steering board located in Doha. And the way it works is that the Libyans would come forward, requesting repayment from their own money being held in the TFM for bills accrued in the categories of health, education, social sciences. So there is a review, there is a steering board, there is an ability to track the money.
QUESTION: Thank you.
MS. FULTON: Okay. Thank you. Operator, next question, please.
OPERATOR: Our next question comes from Joe Lauria of Wall Street Journal. Go ahead. Your line is open.
QUESTION: Yes, thank you. Hadn’t the U.S. already unilaterally frozen these funds from Libya before the Security Council passed its sanctions? And if so, why didn’t the U.S. unilaterally unfreeze them the way Italy apparently did today, the $500 million?
SENIOR ADMINISTRATION OFFICIAL ONE: It’s not clear that the money that the Italians unfroze was actually covered by UN Security Council 1970. There are various pots of money. Yes, we did unilaterally freeze assets before we got the Security Council resolution. Once we had the Security Council resolution, we wanted to work within the UN sanctions regime in order to unfreeze it if we possibly could.
You heard us say from the podium on the record earlier today that our first choice was to get the sanctions committee to release the money; if that was not possible, we wanted to do it still within the UN system, through the UN Security Council. And we believe that if we had had to go that route, the positive vote would have been overwhelming. And the third option would have been to do it unilaterally if we had to, but we didn’t get to that step.
QUESTION: Oh, so this was a matter of choice, then, not a legal obligation?
SENIOR ADMINISTRATION OFFICIAL ONE: Correct.
QUESTION: It was a matter of choice to go through the – and that’s for political reasons, so the U.S. does not appear to be acting unilaterally in Libya the way they’ve been all the way from the beginning, the U.S., not wanting to appear to react unilaterally, wanting the Arab League and Security Council, for example, to authorize any kind of intervention. What were the reasons behind wanting the UN route to be taken?
SENIOR ADMINISTRATION OFFICIAL ONE: It is in U.S. interest for the UN Security Council – the UN Sanctions Committee to work. If you look at what we have done in the past in other parts of the world, if other countries start willy-nilly unfreezing money that the UN has put a blanket on, then the effort that we put into getting multilateral action to put sanctions in place isn’t worth very much.
So when the UN Sanctions Committee works, when UN sanctions work, they are very powerful. So it is in our interest to make that system work and to unwind that system as necessary within its own rules if we possibly can. And that was our preference for maintaining the integrity of the UN system, but we were prepared to act on our own if we couldn’t make that happen.
Let me see if [Senior Administration Official Two] has this – Briefer Number Two has anything he wants to add.
SENIOR ADMINISTRATON OFFICIAL TWO: The only thing I would add is that a number of countries have gone through this process, it’s been established. And I would just reinforce what my colleague said, that this is about doing it the most responsible – doing – unfreezing the assets in the most responsible way and in a timely way, which we think we’ve achieved.
MS. FULTON: Okay. Thank you. Operator, next question please.
OPERATOR: I am showing no further questions at this time.
MS. FULTON: Well --
OPERATOR: If --
MS. FULTON: Sorry.
OPERATOR: If you – I do show one coming through. Just a moment, please.
MS. FULTON: Okay. Thank you.
OPERATOR: Once again, if you do have a question, it’s *1 on your touchtone phone, and record your name at the prompt. One moment, please.
Our next question comes from Brad Klapper of AP. Go ahead. Your line is open.
QUESTION: Hi. I’m not too late, am I?
MS. FULTON: No. Go ahead, Brad.
QUESTION: Okay. I just wanted to know when the money would be available. That was one thing I didn’t quite understand exactly.
SENIOR ADMINISTRATION OFFICIAL ONE: Okay. Briefer Number Two, can you speak to this?
SENIOR ADMINISTRATION OFFICIAL TWO: I would say we’re going to be moving out as quickly as possible, and the money will start to flow in the coming days. As we’ve described, there are three different baskets of money, and we expect that the money may flow at different rates depending on the basket.
QUESTION: So how does that process work when you say we’ll go about moving this as soon as possible? They can draw on this as – like a bank account? Or is there some sort of transfer involved, or how does that work?
SENIOR ADMINISTRATION OFFICIAL ONE: Brad, I don’t know if you – were you on the call when I just went through the three baskets again, or were you not?
QUESTION: Yeah, I was, but maybe I missed it.
SENIOR ADMINISTRATION OFFICIAL ONE: Okay. So the first chunk of money, the first basket, the money that goes to pay for UN services, 120 million will go soonest to the UN. The rest of that 500 million, 380, will be held to pay for future UN appeals that the Libyan people and the TNC decide are needed. Okay? So that money goes to the UN, transfers to the UN.
Second basket for the fuel, the vendor gets paid, the fuel purveyor gets paid. In the third basket, as soon as we can release it, the money goes to the authorities in Qatar that have set up the temporary financial mechanism, and it goes into the bank account set up for that.
SENIOR ADMINISTRATION OFFICIAL ONE: And the TNC has to come forward with its request for disbursement from that mechanism.
QUESTION: But what do you have to wait upon when – you said “as soon as we can disperse it.” What regulatory hurdle? What’s left in the process?
SENIOR ADMINISTRATION OFFICIAL ONE: Let’s have Briefer Number Three speak to this.
SENIOR ADMINISTRATION OFFICIAL THREE: There’s – right now, there is a process that goes about. As you might understand, each of the funds that are frozen are controlled by OFAC and the executive order. And so since – to release them, there will be a process that is very familiar to OFAC that has where directive licenses are used. So it’s a process of getting the TNC and the United States State Department and Treasury to line up. But it’s not a very – as compared to other things, it’s not a very hard process.
QUESTION: Thank you.
OPERATOR: Our next question comes from Josh Rogin of Foreign Policy. Go ahead. Your line is open.
QUESTION: Hi. Thanks. So now that this part of the effort to unfreeze some of the funds is over – of course, this doesn’t come close to what the TNC has identified as their short-term needs for funding – what’s the next step? How do – what’s the next effort to unfreeze more funds? What’s your strategy for doing that? And when will we see some progress on that?
SENIOR ADMINISTRATION OFFICIAL ONE: Josh, I think we want to get this piece done, and then we’re going to go forward from there. As we’ve been saying, there is the larger question as the TNC gets its feet under itself in Tripoli and the violence begins to end about it coming forward to the UN to discuss how it would like to see the two UNSCRs – UNSCR 1970 and 1973 – unwound, and that will also speak to whether the UN freezing of all these assets comes to an end. So I think it’s premature to speculate, but there are a number of routes for unfreezing the rest of it.
QUESTION: Okay. Does this mean that the effort to unfreeze the 200 million or so that’s held unilaterally by the United States, is that still going on? Is that still part of the plan? (Pause.) Hello?
SENIOR ADMINISTRATION OFFICIAL ONE: Hi, Josh. We’re just trying to get it together here. Give us one second.
QUESTION: Oh. Sure, sure.
SENIOR ADMINISTRATION OFFICIAL ONE: I think we – now that we have this much bigger chunk on its way, we have to look again at that other piece. It may very well get wound into this 1.5.
QUESTION: Okay. Fair enough. Thank you.
SENIOR ADMINISTRATION OFFICIAL ONE: Okay. If there are no other questions, I think we’re good for tonight if you are.
OPERATOR: We actually do have more questions if you want to take more.
SENIOR ADMINISTRATION OFFICIAL ONE: Okay. We’ll take two more.
OPERATOR: Okay. We have a question from Richard Roth of CNN. Go ahead. Your line is open.
QUESTION: Hello from the UN. One can’t forget the image of South Africa’s ambassador kind of being late for the Libya vote a couple of months ago at the Security Council. What among the eight different reasons we’ve heard was the key holdup for them? And what do you see going forward from South Africa and other countries in your quest for a Syria resolution as it seems that more and more countries are willing to take on the U.S. a little bit in this area?
SENIOR ADMINISTRATION OFFICIAL ONE: We heard a lot of things from South Africa over the last couple of weeks. In the endgame, there were two issues. The first was that they wanted to wait for a little more support from their AU brethren. There’s an AU meeting going on now, as you know. Some members of the AU have recognized the TNC, but not all, and the AU as an organization has not done so. The second thing we spoke to at the beginning, which was that the initial draft spoke of giving the money to the TNC, which most of the rest of the sanctions committee members were comfortable with, but given that the South Africans have not themselves recognized the TNC as a governing authority, they needed that fuzzed up a little bit, which we were able to do with the last compromise, calling them relevant Libyan authorities.
OPERATOR: Our next question comes --
QUESTION: And going forward with Syria?
SENIOR ADMINISTRATION OFFICIAL ONE: Going forward with Syria, we continue to believe that more UN action on Syria is the right way to go, and we’re continuing to work on that. You know that we have problems with some Security Council members on that, and as the Secretary has said, we’re urging those countries to get on the right side of history.
MS. FULTON: Okay. With that, I think we have time for just one final question.
OPERATOR: Our next question comes from Arshad Mohammed of Reuters. Go ahead. Your line is open.
QUESTION: Just two quick things so that I’m perfectly clear: The transfers from the first two baskets of $500 million will ultimately then be from the United States directly to the UN agencies in the first case, and to the fuel provider in the second case? And then secondly, in the spirit of transparency, who is the fuel provider that has been providing power thus far to Benghazi and other parts of Libya and who you expect to pay out of that second basket going forward?
SENIOR ADMINISTRATION OFFICIAL ONE: Okay. First, on your first question, yes, the money goes right from the U.S. to the UN for the first basket and to the fuel provider for the second basket. The fuel provider has been uncomfortable having its name out in the press, so I think I will let you guys find that elsewhere.
QUESTION: Thank you.
MS. FULTON: Okay. If there’s nothing further, I think this concludes our call. Our principals have to move on, so thank you, everybody, for joining us. We appreciate your time this evening and thank you very much.
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