Libya ensnared.

A successful attempt by Libya to sidestep UN sanctions by divesting control of millions of dollars of oil industry assets in Europe has failed to protect those assets from the unilateral US trade embargo against Colonel Gaddafi. The US Treasury Department's Office of Foreign Assets Control (OFAC) has issued an updated list of companies and individuals it seems to be "specially designated nationals "(SDNs) of Libya, or "agents" of the Libyan government. 113 companies and 28 individuals are named with whom it is illegal for US corporations and businessmen to trade with the blacklisted entities.

The list includes a Dutch firm, Oilinvest (Netherlands) BV, which until last autumn was a 100% Libyan-owned holding company whose 33 subsidiaries, many using the Tamoil trade name, own the bulk of Colonel Gaddafi's oil European oil industry investments. They include firms owning refineries in Cremona, Hamburg and Colombey, near Geneva; some 2,000 petrol stations in Italy, over 300 in each of Germany and Switzerland and a handful in Spain and Hungary; and pipelines and port oil storage tanks in north Germany. Oilinvest's subsidiaries refine and market about 350,000 barrels per day of Libyan crude - over one third of Tripoli's total output.

Last October, as the UN Security Council prepared to adopt a resolution freezing Libya's foreign assets as part of the package of Lockerbie-linked measures, Oilinvest announced that, following a capital increase, a controlling 55% had been acquired by the minority shareholders in the company's subsidiaries, none of which are Libyan. They include Italy's Armani, Montanari and Triboldi groups. Libya retained only a 45% stake The move was openly intended to protect Oilinvest and its daughter firms from the UN asset freeze. A company statement explained that the non-Libyan shareholders had "closely watched developments in the UN Security Council" and had "become increasingly concerned about the fate of their investments". An Oilinvest spokesman explained: "We believe we are no longer a Libyan asset". He was right, at least so far as the UN sanctions went. Oilinvest and its subsidiaries have not been frozen under the Security Council resolution. Washington, however, has taken a tougher line. OFAC has blacklisted Oil-invest and all its subsidiaries as "agents of the government of Libya".

In addition to freezing Libyan foreign assets, the UN sanctions, imposed in stages since April 1992 in a bid to persuade Colonel Gaddafi to hand over for trial the two Libyans accused of the Lockerbie bombing, ban the supply to Libya of arms and of aviation and oilfield equipment. The US embargo against Libya, prompted by Gaddafi's backing for international terrorism, goes back much further and has a far wider scope. The supply by US companies of military and aviation equipment was banned in the 1970s. Imports of Libyan crude oil into the United States and sales to Libya of US oil industry technology were banned in 1982. In January 1986 the US banned all trade with Libya and ordered all US firms and individuals working there to depart.

About one quarter of the companies on the US list are based in Libya. Of the 84 outside the country, almost half are in Europe, with a special concentration in Malta which has long been a focus for Libyan foreign investment. Most of the rest are in Africa and the Arab world. Of the 28 blacklisted individuals, all but five are Libyans and other Arabs.

Washington's unilateral action is only likely to provoke Gaddafi into further displays of defiance. After the UN Security Council adopted Resolution 883 last November (freezing Libyan assets abroad, and banning the export to Libya of vital equipment for the downstream oil and gas sectors), the colonel threatened to set fire to his own oil fields in protest. His fury has been unleashed against the Arab world as well. Gaddafi has said again that he may withdraw from the Arab League. According to the official Libyan news agency, Tripoli claims that the Arab League has been impotent in facing up to UN-imposed embargoes. "Member states of the League have participated in blocking the people of the great Jamahiriya in implementation of a resolution by the crusader enemy |the United States~" the statement pointedly claimed.

"What is taking place is the Arabs' submission to American and Israeli power that is imposed on them and the Arabs unconditional surrender." The United States will undoubtedly interpret these as the words of a man in just the tight corner where they want him.