EXCLUSIVE | Key Document and Witness Reveal that the US Cannot Claim Further Compensation over Lockerbie – Al Marsad

EXCLUSIVE REPORT | The Lockerbie case returned to the surface once again after US prosecutors accused the Libyan citizen Abu Agila Mohammad Masud, the intelligence officer, of being implicated for manufacturing and transporting the bomb that was used in the bombing of Pan Am Flight 103. In an exclusive report, AlMarsad reveals the text of the Libyan-American Claim Settlement Agreement signed in Tripoli on 14 August 2008 and also speaks to a key member of the agreement’s follow up committee—both of which reveal that the US cannot claim further compensation from Libya over the Lockerbie case.

(Libya, 24 December 2020) – The announcement by the US Justice Department coincides with a British ruling lifting receivership on Libyan Investment Authority (LIA)’s frozen Libyan assets which total billions. The peculiar timing has led some to link this ruling with the US charges against Mr Masud which could risk these Libyan assets being seized, considering that the accident took place on British soil.

The site of the crash of Pan Am Flight 103 over Lockerbie in northern Britain on 21 December 21, 1988 (Archive)

But how likely is this? Can the US really put its hands on Libyan assets in the UK if the American judiciary settles upon the indictment of Mr Masud and convicts him? Mr Masud is a Libyan citizen who is imprisoned in Tripoli since 2011 on charges of “loyalty” to the former regime.

AlMarsad received the original and exclusive documents, which we publish here for the first time, of the full text of the Libyan-American Claim Settlement Agreement signed between Libya and the US in Tripoli on 14 August 2008. The aim of the agreement was to: a) reach a final settlement of all claims; b) terminate permanently all pending suits; and c) preclude any future suits. Therefore, the agreement effectively closed all related to Lockerbie, even if they are subject to appeal to the courts, after suits were filed by American families in New York in 2006, and for which  the US courts awarded US$6 billion to the US victims.

This agreement was a settlement to end the dispute and agree to a compensation of US$1.5 billion paid by Libya to the US, and the US paying US$300 million in compensation to Libya, totalling a settlement of US$1.8 billion.

This agreement, written in both Arabic and English, was signed by David Welch, the Assistant Secretary of State for Near Eastern Affairs, and Ahmed al-Faitouri, the deputy Secretary of American Affairs in the Libyan Foreign Ministry at the time, and provides for the establishment of a fund in which the parties or their representatives would deposit money requested by each other as compensation.

Signing of the agreement between David Welch, the Assistant US Secretary of State for Near Eastern Affairs, and Ahmed al-Faitouri, the deputy Secretary of American Affairs in the Libyan Foreign Ministry.

The agreement stipulates in the clauses of Article III that the parties accept the material settlement as a full and final settlement of all claims. These paid funds are considered as a complete settlement, it is completely final and no new claims may be opened for any acts committed by the two parties against the other before 30 June 2006. This means that the US has no right to claim or reserve any Libyan funds or assets after this decisive settlement, duly signed on 14 August 2008, and that Libya is not entitled to any claim in exchange for the US to pay compensation to the victims of the American raid on Libya on 15 April 1986.

In order to ensure respect for this agreement, Libya, in Clause 2b of Article III, demanded that the US commit to providing sovereign and diplomatic immunity to Libya and that the families of the victims were to receive no compensation from the common fund until such immunity was provided, and which has already been done through American presidential and legislative decrees.

Indeed, in compliance with this Libyan requirement, the US Congress passed Law No. 110-301 of August of the same year on the adoption of this agreement and Article No.4 of this Law stipulates that Libyan property and individuals concerned shall be safe from seizure or other judicial proceedings. It was President-Elect Joe Biden, who was a Congress member then, who introduced that legislation.

Joe Biden during his position in Congress in 2008.

On the 31 October 2008, US President George Bush signed a presidential decree No. 13477 stipulating the commitment of the US to settle the obligations required of it and committed by its citizens, provided that Libya should abide by the same principle with the complete termination of any future claims and the closure of any cases open by the victims’ families, whether before domestic and foreign courts. Some families had filed cases against Libya individually and obtained judgments with huge financial compensation, but it all became invalid once this agreement was signed.

Therefore, any speculation about the ability of the US to reserve Libyan frozen funds, or demand Libyan assets, or punish Libya with further punitive measures over Lockerbie has no legal ground in accordance with this agreement signed between Libya and the US, with the same legal power and the law on its approval by Congress and the presidential decree issued and signed by President George W. Bush.


In an exclusive interview given to AlMarsad, Mohammed Ismail, the assistant of Saif al-Islam Gaddafi and member of the agreement’s follow-up committee, said: “The Lockerbie compensation file was finally closed after the signing of an agreement to settle all claims and demands between the US and Libya on 14 August 2008.” In the interview he revealed some of the details that preceded and accompanied the signing.

“The negotiations began in Berlin in spring 2008 with Saif al-Islam Gaddafi’s meeting with David Welch. It was agreed that negotiations between the lawyers of the Libyan state and the families of the victims should be framed in a settlement agreement between the two countries, after which a law from Congress and a US presidential decree would be issued to close the file of all financial claims in all cases filed without exception before the American courts, and give immunity to Libya and that it is not permissible to institute any future claims in this regard.”

Mohammed Ismail added: “The agreement includes compensation for American victims and Libyan victims in the US raid in 1986, a joint compensation fund was to be established and to be operated by the Gaddafi International Foundation for Charities. For your information the Libyan state did not pay a single penny to this fund because the Leader [the late Muammar Gaddafi] refused to burden the Libyan treasure with this matter to the Libyan treasury, and so it was financed by countries and institutions as part of efforts to resolve the crisis.”

He continued: “A Committee was formed with the head of the General People’s Committee and its secretaries for foreign communication, Ministries of Finance, Planning and Justice, Secretary of the National Oil Corporation, the Governor of the Central Bank of Libya, and a representative of the Gaddafi International Foundation for Charities, in addition to assigning the American law firm as an adviser to this Committee. The work of the Committee culminated in the signing of the aforementioned agreement.”

“I should mention that after signing the decree, the former President George Bush called Colonel Muammar Gaddafi on 16 November 2008, heralding the beginning of the normalization of full diplomatic relations between the two countries. A US ambassador was then appointed in Tripoli.”

Mohammed Ismail concluded by saying: “Therefore, talking about opening the compensation file again is unfounded and any new investigation into the Lockerbie case does not affect Libya at all—as evidenced when a victim’s family filed a case in 2016 through a lawyer in the US and was rejected because of the closure of demands and lawsuits through the agreement and subsequent decrees.”

AlMarsad publishes, in sequence, the full version of the Libyan-American Claim Settlement Agreement, the law issued by US Congress, and the Presidential decree signed by President George Bush:

Cover Page

Prelim Page A

Prelim Page B

Page 1

Page 2

Page 3

Page 4


© AlMarsad English (2020)



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