Libya to cut Swiss economic ties in protest

TRIPOLI (Reuters) – Libya will withdraw $7 billion of assets in Swiss banks, cut economic ties with Switzerland and stop supplying it with oil to protest against poor treatment of Libyan diplomats and businessmen, Libyan news agency JANA said.

The decision comes three months after a diplomatic row broke out when a son of Libyan leader Muammar Gaddafi was arrested in Geneva and charged with mistreating two domestic employees.

Hannibal Gaddafi denied the charges and was freed on bail, but the case caused uproar in Tripoli and led to the detention of two Swiss nationals, who were later released.

Geneva’s chief prosecutor dropped the case against Gaddafi last month after the plaintiffs, a Tunisian woman and Moroccan man employed by Gaddafi, withdrew their formal complaint.

It was unclear which events had prompted Libya’s latest move.

“Due to the poor treatment a number of Libyan diplomats and businessmen received from the police in the canton of Geneva, the Great Jamahiriyah (Libya) has decided to stop pumping crude oil for Switzerland and withdraw Libyan assets deposited in Swiss banks which are worth $7 billion,” JANA cited an unnamed foreign ministry source as saying in a statement on Friday.

“It has also decided to suspend all forms of economic cooperation with Switzerland until the reasons and the motives behind such practices are known,” it added, without elaborating.

Officials at Switzerland’s foreign ministry were not immediately available to comment on relations with Libya.

OIL SUPPLY CUT

Libyan fuel refining and distribution firm Tamoil said on Thursday that Libya, a major supplier, had stopped delivering crude oil to Switzerland.

Tamoil says it supplies 20 percent of the Swiss market, or 2.5 million tonnes of oil products a year, and has around 330 service stations in the country.

A local oil industry officials played down the impact of Libya’s energy embargo, saying it was bad mainly for Tamoil and would not lead to higher prices for Swiss consumers.

“It’s no threat for Swiss overall supply,” said Rolf Hartl, managing director of the Swiss Oil Association. “It would take 2-3 weeks for the interruption to physically happen. Switzerland can replace the Libyan supply in the meantime easily.”

“This step has a political background,” he said. “Libya will want to return to business as usual at some point.”

Staff at Libya’s state Maritime Transport National Corporation announced on July 24 they were halting oil exports to Switzerland, but Swiss oil industry officials said later that supplies had not been interrupted.

Hannibal Gaddafi and his wife Aline were arrested in their luxury lakeside hotel suite on July 15 after staff alerted police to repeated arguments.

Alain Berger, a Geneva lawyer who defended the wife, said he had no comment on the latest Libyan moves to cut economic ties. Neither was he aware of Libyan diplomats and businessmen who had been mistreated in Switzerland, as alleged by Tripoli.

Hannibal Gaddafi’s lawyer Robert Assael was in a hearing on Friday and would not be available, his office said.

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