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US ban on Pak-Libya Holding Company highlights strained US-Pak ties: Analysts


August 20, 2011 - Islamabad

A recent ban by the United States Treasury Department on Pak-Libya Holding Company Limited highlights the turbulent relations between Islamabad and Washington, according to analysts.

They say that the ban has nothing to do with the American concerns related to the economy of the Libyan regime, but would instead have a fallout on Pakistan's business.

"It is indirectly a move to punish Pakistan, as the ban would have a financial impact on Pakistan. Companies such as Pak-Libya Holding never mean that it is a Libyan company; such companies invest in Pakistan to portray to the world that Pakistan is an investor-friendly country. Such companies invest where they eye more profit," The Dawn quoted Ahmar Bilal Sufi, an international lawyer, as saying.

"All international financial transactions are routed through New York and it is in dollars, so it must be frozen, having a negative impact on the company," he explained.

Bilal said it was the loss of those who have invested in the company, and suggested that Pakistan should check the text of the United Nations (UN) Security Council resolution relating to the ban.

"Pakistan should fight its case after looking into the exceptions in the UN Security Council framework that had any company in the past ever allowed to do business with such sanctions and how it was allowed," he added.

Salman Shah, a former adviser to the Finance Ministry, said: "It's illogical to impose a ban by the US (Treasury Department) on a financial institution which has nothing to do with the regime of Gaddafi government, instead it's the investment of the Libyan government."

He said he did not see any reason for the ban on Pak-Libya Holding Company because it was a small financial institution, having its entire stakes in Pakistan. "It's not a right move," he added.

According to a source close to the development, Pakistan's Foreign Office is negotiating with the Americans for reviewing the ban imposed last month, creating a financial trouble relate to assets of the company in and outside Pakistan.

The Pakistan government owns 50 per cent shares in the Pak-Libya Holding Company, which is extending financial-related services. However, according to the US Treasury website, the company is owned by Libyan Arab Foreign Investment Company- a subsidiary of Libyan Investment Authority, Government of Libya.

ANI

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