Barack Obama has directed the US Treasury to block $30bn (£18.45bn) in assets held by Libyan leader Muammar Gaddafi and his officials. The move came as world leaders moved to isolate the Libyan regime for its violent crackdown on protesters.
The action to seize assets began over the weekend and is the largest ever undertaken by the US, said Treasury officials. The Libyan government and its leaders are believed to have stashed billions of US dollars in foreign bank accounts – money generated by the country's vast oil wealth.
"As of today, at least $30bn in government of Libya assets under US jurisdiction have been blocked," said David Cohen, the US Treasury's acting undersecretary for terrorism and financial intelligence. He said he had no details on the types of assets or the number of banks involved in the action ordered by Obama.
Cohen said the funds belonged to the Central Bank of Libya and the Libya Investment Authority, a "sovereign wealth fund" that invests in foreign assets. He said further sanctions could be on the way. "We are considering whether to add to the list of individuals," he said.
According to a 2010 message obtained by WikiLeaks, the Gaddafi-controlled LIA holds $32bn in cash and "several American banks are each managing $300-500m". The LIA is believed to have assets worth $70bn in total, including investments in European banks such as the Italian bank UniCredit, and the media group Pearson, which owns the Financial Times and Penguin books.
The LIA is one of Libya's largest repositories of foreign-held funds. At the end of 2010 Libya was estimated to have held $152bn in assets around the world.
Prior to this weekend's action, the US Treasury had warned banks to watch out for transfers linked to Libya's political leaders. Cohen said there was as yet no evidence that the Libyan authorities had managed to take cash out of the US ahead of the sanctions.
Cohen said the US believes "there are substantial Libyan state-owned assets in Europe and that these assets are controlled by Colonel Gaddafi and his children".
The UK, European Union and the United Nations have already frozen the assets of Gaddafi and his entourage as the international community has moved to increase pressure on the Libyan regime.
On Sunday, Britain froze the assets of Gaddafi, his daughter and four sons, including a £10mn Hampstead home of Saif al-Islam Gaddafi, the Libyan leader's second son. Last week the UK foiled an attempt to move hundreds of millions of dollars of funds out of Britain before sanctions could be imposed.
Cohen said: "We are hearing that major European financial institutions are interpreting their obligations under the US, UN and UK actions as requiring them [to] block all government of Libya assets, including accounts held by the Central Bank of Libya and the Libyan Investment Authority.
"These blocking actions by the United States, the UN, the UK and EU serve two very important objectives: depriving Colonel Gaddafi and his government access to these assets and simultaneously safeguarding them for the Libyan people."
In the WikiLeaks cables the LIA official says he prefers doing business in the UK over the US because Britain has a relatively uncomplicated tax system and is an easier place to do business. The cables also reveal that the LIA turned down the opportunity to invest with convicted fraudster Bernard Madoff and accused fraudster Allen Stanford.