Taxman 'could be profiting from frozen Libyan assets', MPs say
A total of 拢12bn聽is being held in British financial institutions following the collapse of Colonel Muammar Gaddafi's regime.
Tuesday 9 April 2019 04:45, UK
Large sums of money from frozen Libyan assets could be going to the taxman while UK terror victims of the former regime receive nothing, MPs say.
A total of £12bn is being held in British financial institutions following the collapse of Muammar Gaddafi's regime.
In 2011 a UN sanction froze Libyan assets around the world to prevent their theft or misuse during the civil war that overthrew Colonel Gaddafi.
The dictator's supply of several shipments of Semtex explosives to the Provisional IRA in the mid-1980s led to a deadly campaign of bombings across the UK.
The Northern Ireland Affairs Committee, which published a report on the matter, urged British ministers to do more to help victims receive compensation.
Chairman Dr Andrew Murrison said: "My committee is disappointed our government has been less successful in securing compensation for UK victims of Gaddafi-sponsored IRA Semtex attacks than other governments have been for their nationals.
"We now find that HMRC may have been scooping up big tax receipts from frozen Libyan assets, a small part of which could help victims' pending reparations being negotiated with the Libyan government."
Victims of IRA attacks that used Gaddafi-supplied Semtex, like the 1996 Docklands bombing, have not received compensation from Libya.
The government has committed to take a more "visibly proactive approach" to securing compensation for the victims of these attacks; however, the MPs argued that "continued inaction" had led to time running out for many victims.
The report recommended ministers enter into direct negotiations with the Libyan authorities to seek a compensation deal, reveal whether any tax is collected on frozen Libyan assets and expand the remit of the newly-appointed specialist adviser William Shawcross to ensure an active role in seeking and securing compensation for victims.
It also asks for an explanation as to why the government has chosen not to finance a victims' reparations fund if tax is being collected.
In 2011 a UN sanction froze Libyan assets around the world to prevent their theft or misuse during the civil war that overthrew Colonel Gaddafi.
Cash, property and securities in the UK are now worth £12bn.
Correspondence between the committee, the Foreign and Commonwealth Office and the Treasury revealed that the assets are not exempt from tax.
The government was "opaque" in its response to questions on how much tax had been collected, the committee said.
Licences have been issued to make funds from the Libyan assets available.
The committee criticised official refusal to explain for what, and to whom, the licences were issued.
A government spokesman said it took the issue extremely seriously and wanted to see a just solution for all victims of Gaddafi-sponsored IRA terrorism.
"In accordance with international law, when assets are frozen, they continue to belong to the sanctioned individual or entity. Sanctions can only be lifted by the EU or UN," they said.
"We do not comment on individuals' tax affairs.
"Generally, where taxable income or gains are made in relation to frozen assets, a tax liability will arise, regardless of the assets' frozen status."