Emergency meeting of Privy Council held at Windsor Castle after Libyan leader reportedly moved £3bn to Britain
Britain froze the assets of Muammar Gaddafi and his five children on Sunday evening at an emergency meeting of the Privy Council at Windsor castle presided over by the Queen.
The chancellor, George Osborne, acted amid reports that the Libyan leader had moved £3bn to Britain last week. In a separate cloak-and-dagger operation, £900m of Libyan currency was impounded in Britain.
Earlier ministers announced they had stripped the Gaddafi family of its diplomatic immunity in Britain.
A special meeting of the Privy Council at 5.15pm on Sunday approved an order in council freezing the assets of Gaddafi, his sons Saif al-Islam, Hannibal Muammar, Khamis Muammar, and Mutassim, and his daughter Aisha Muammar. The Times reported on Saturday that Gaddafi had deposited £3m with a Mayfair-based private wealth manager last week.
The chancellor said: "I have today taken action to freeze the assets in the UK of Colonel Gaddafi and his family or those acting on their behalf so that they cannot be used against the interests of the Libyan people. This follows the UN security council resolution tabled by the UK and France.
"I decided to implement this UN resolution in the UK as quickly as possible, before the financial markets reopened. This is a strong message for the Libyan regime that violence against its own people is not acceptable."
The order in council freezes "all funds, financial assets and economic resources owned or controlled by the listed individuals and entities, or by anyone acting on their behalf or by entities controlled" by the named members of the Gaddafi family. The City of London has been informed that "no funds or economic resources can be made available to listed persons or entities, or for their benefit".
Last week and over the weekend Osborne was also involved in a separate operation to impound £900m of recently printed Libyan currency notes which were in storage in a secure compound in the north-east of England. The chancellor implemented what was described as a classic Yes, Minister foot-dragging exercise after discovering a request from Tripoli for the currency to be exported out of Britain.
Osborne immediately called for an Export Control Order blocking the export, but officials advised him this would take a few days to implement, prompting the chancellor to mount a delaying operation.
Officials, who had to comply with the Libyan request until the order was approved, initially told Tripoli that it would take time to move the banknotes. They said they would need around 20 4x4 secure vehicles because each one can only carry around £50m in Libyan banknotes.
The Libyans replied that they would send an aeroplane to the airport closest to the secure compound. Officials advised them to send a plane to Marsden in Kent, although the currency was, and still is, hundreds of miles further north.
"Officials were working hard to string out the Libyans until the order was in place," one source said. "It was worthy of Yes, Minister as officials did their best to hinder any efforts to move the banknotes."
The order, under the Export Control Act 2002, prohibits the export of uncirculated Libyan banknotes without a UK licence. The order applies only to uncirculated, or freshly printed, Libyan banknotes. This means that Libyans in Britain with used currency will not be committing an offence if they send currency to relatives back home.
Ministers hope that the three announcements on Sunday – freezing assets, impounding the Libyan banknotes and lifting diplomatic immunity for Gaddafi's family – will show the government has taken command of Britain's response to the crisis after a faltering start.