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Libya Ship Carrying $160 Million Seized In U.K.

Libya Ships

RAPHAEL G. SATTER   03/ 4/11 10:59 AM ET   AP

LONDON — A ship carrying about $160 million worth of Libyan currency has been impounded after turning back from a planned trip to Libya, a British government official said Friday.

The official said the ship – whose nationality and ownership she refused to identify – returned to Britain after its captain decided not to dock at Tripoli harbor because of the unrest there. The vessel returned to the port of Harwich in eastern England on Wednesday under escort by a Border Agency cutter, she said.

A number of containers full of currency were moved from the ship to a secure location.

The official spoke on condition of anonymity because she was not authorized to speak on the record.

She declined to comment on the precise timing of the events leading up to the second currency seizure this week, but said that the ship left for Libya before the imposition of international sanctions. She also declined to comment on where the currency came from, although Britain is home to international printer De La Rue PLC, which produces over 150 national currencies. De La Rue declined comment Friday.

Britain has banned the export of Libyan bank notes in line with U.N. sanctions, and earlier this week the government announced the seizure of around $1.5 billion worth of Libyan currency which had yet to leave the country.

Meanwhile, the U.K. is also expanding its asset-freezing program to include an additional 20 senior members of Libyan dictator Moammar Gadhafi's entourage – mainly top brass and spymasters – the government official said.

The total number of Gadhafi associates subject to British asset freezing orders now stands at 26, while the amount of money frozen in the U.K. – including the seized currency – has risen to approximately $3.3 billion, she said.

But in an illustration of how tricky asset-freezing campaigns can be, the London-based British Arab Commercial Bank PLC, which is mostly Libyan-owned and largely funded by the Libyan government, announced Friday that it has been given the official go-ahead to continue operating internationally.

The bank is about 83 percent owned by the Libya's central bank and about three-quarters of its funding comes from Libyan governmental or quasi-governmental sources, according to Fitch Ratings. The bank, which provides short-term loans and other services to wholesale customers across the Middle East and North Africa, had about 3.3 billion pounds ($5.36 billion) in assets in 2009.

The British official declined to answer questions about why the bank hadn't been blocked, while other Libyan government-associated funds such as the Libyan Investment Authority had seen their assets frozen.

But she said that, in general, government freezing orders are structured in such a way so as to avoid harming "innocent U.K. financial casualties."

She noted that assets belonging to people on the British Treasury's blacklist would be frozen regardless of where they were held.

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Filed by Curtis M. Wong  |