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As part of the effort to isolate Muammar Qaddafi through economic sanctions, the U.S. has seized $34 billion of the Libyan leader's assets in U.S. financial institutions, and the European Union and several European countries have seized billions more. Now, as the Libyan rebels worry about running out of cash in a matter of weeks, they're asking the West to tap into those funds.

The Libyan opposition moved a step closer to that goal on Wednesday, when NATO, Arab, and African ministers, meeting in Qatar, announced, rather vaguely, that they would work with the rebel leadership to establish a "temporary financial mechanism," perhaps drawing from Qaddafi's frozen assets. "This is the money of the Libyans, not of Colonel Qaddafi," Italy's foreign minister explained, noting that the cash would go toward humanitarian purposes like providing Libyans with food and salaries. A rebel leader said the opposition is initially seeking a lifeline of $2 billion.

But, as a few news outlets are pointing out, there are substantial obstacles standing in the way of the U.S. unfreezing Qaddafi's assets. Here are the top three:

  • Time: Unfreezing assets, which are in vehicles ranging from real estate to stocks, is a "cumbersome and time-consuming" process, according to Reuters.
  • The law: Experts tell Reuters that the U.S. could face challenges under international law that could take years to surmount if it were to unfreeze Libyan assets. The U.S. might need to officially recognize the opposition as the new Libyan government, as the French have done, because otherwise there would be competing claims to who represents Libya and therefore is entitled to the state's assets. In a letter to Treasury Secretary Timothy Geithner last week, the rebel transitional council suggested a workaround: the U.S.could directly pay food and medicine suppliers rather than distribute the cash to the rebels themselves. On Wednesday, Libyan Finance Minister Abdulhafid Zlitni asserted that there were "no legal grounds" for dispensing frozen assets to the rebels, and requested that the assets be unfrozen for "humanitarian needs" in Libya as a whole.
  • National security: The Wall Street Journal reported last week that the Pentagon and U.S. intelligence agencies still harbor concerns that segments of the Libyan opposition have connections with Islamic extremist groups, and therefore worry that any money disbursed could wind up in hostile hands. The rebels have proposed appointing an international auditor to track the money's use.

This article is from the archive of our partner The Wire.

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