Russia links U.N. sanction vote to loan to cover Libya's debt


UNITED NATIONS -- Russia is threatening to veto new Security Council sanctions against Libya over its refusal to surrender two suspects in the bombing of a Pan American World Airways airliner over Scotland five years ago unless the United States, Britain and France give it an interest-free loan to cover a $4 billion debt that Tripoli owes Moscow.

The United States and its allies are resisting the Russian demand, which one U.S. diplomat described as "a nonstarter."

Originally, the Security Council warned Libya that it would face new economic sanctions unless it handed over the two indicted suspects for trial in Scotland by Oct. 1 and agreed to cooperate with a French investigation into the downing of a French airliner over Niger in 1989. A total of 441 people died in the two disasters.

But U.N Secretary-General Boutros Boutros-Ghali asked for a delay while he tried to persuade the Libyans to comply. After his efforts got nowhere, Russia used the threat of its Security Council veto to block the new sanctions, saying it wanted the Security Council to seize Libya's overseas financial assets, instead of freezing them, and to use the money to pay off the Libyan debt to Moscow. The United States, Britain and France refused to give Russia precedence over Libya's other creditors in this way.

In Moscow last weekend, Secretary of State Warren M. Christopher urged the Russians to drop their opposition to the new sanctions.

Russia proposes to repay the money out of frozen Libyan foreign financial assets when they are released, diplomats said.

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