21. Study Prepared by the Ad Hoc Interdepartmental Group for Africa1


Study Pursuant to NSSM 185

Prepared and approved by the ad hoc Interdepartmental group under the chairmanship of the Assistant Secretary of State for African Affairs.

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NSSM 185

    • Interests: 3
    • Objectives:
      • Political/Strategic: 4
      • Economic: 6
      • Cultural: 7
      • Other—Passport Policy: 8
    • Foreign Intervention and Political Activism: 8
    • Economic Nationalism: 10
    • Policies toward Large Powers: 11
    • Outlook for Regime: 12
    • Merger with Egypt: 13
    • Possible Moderation of Libyan Policies: 14
    • U.S. Ability to Influence Libyan Actions: 16
    • U.S. Diplomatic Representation: 23
    • U.S. Arms Sales: 24
    • Reconnaissance Flights: 27
    • Cultural Cooperation and Travel: 28
    • High-Level Emissary: 29
    • Explore Possibility of Improved Relations: 29
    • Low Profile, Do Nothing Directly against Libya: 30
    • Low Profile, but Signal Willingness to Counter Libyan Actions: 31
    • Confrontation: 31


  • Appendix A—The Libyan Oil Industry (CONFIDENTIAL)
  • Appendix B—Libyan Support for International Terrorism (SECRET)
  • Appendix C—Libyan Foreign Aid (SECRET)
  • Appendix D—Libyan Arms Procurement (SECRET)
  • Appendix E—Pending Munitions Control License Applications for Sales to Libya (UNCLASSIFIED)
  • Appendix F—Libyan Restricted and Danger Areas (SECRET)
  • Appendix G—Evaluation of Reconnaissance Flights (Distributed Separately)


The purpose of this paper is to review US relations with Libya, the prospects for their improvement, and the options available to the United States to protect its interests in that country and in the region.

US relations with Libya have been severely strained since the overthrow of the Libyan Monarchy on September 1, 1969. Libyan Revolutionary Command Council (RCC) Chairman Qadhafi and the rest of the Libyan leadership identify the United States with Israel, Libya’s paramount foreign enemy. He also seems to genuinely fear an Israeli attack on Libya with US assistance. Our relations with Libya are currently at a low ebb as a result of Libya’s militant rejection of a peaceful solution to the Arab-Israeli problem, the Libyan regime’s attempt to shoot down an American reconnaissance plane on March 21, the nationalization on June 11 of an American oil company (Bunker Hunt), and continuing high-level Libyan denunciations of American “arrogance” and “imperialism” in the Arab world and elsewhere.

The US concern with Libya stems basically from the importance of Libyan oil, primarily to Western Europe, the size of the American investment in the Libyan oil industry, and the contribution which that investment makes to the US balance of payments, the continued presence in Libya of approximately 2,800 American citizens and the political disruptive capability of Libya in Africa, the Middle East and elsewhere because of its vast financial reserves. Our freedom to take actions counter to the Libyan regime are inhibited by Europe’s need for Libyan oil and the large remaining private US stake in the Libyan oil industry. The effectiveness of actions by us against Libya would be limited also by European moves to protect and pursue their own interests.

Libya’s geographical position in the central and eastern Mediterranean endow it with a strategic significance in the event of an outbreak of hostilities in the Middle East that might require the deployment of US military resources in the Mediterranean.

Although some of the problems indicated above might be attenuated in the event of some form of merger between Libya and Egypt on September 1, this is by no means certain, given Colonel Qadhafi’s assertive personality and determination to pursue his Arab and Islamic objectives in any such union. The possible implications for the United States of a Libyan-Egyptian union are therefore included in this study.

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The Libyan regime which came to power in September 1969 is shaped by the views of RCC Chairman Mu’ammar Qadhafi, which are generally shared by other Libyan RCC members and policy makers. Qadhafi was born in a tent in 1941 and brought up in desert surroundings. From this background he developed a strict puritanical morality, personal aceticism, plus conservative Islamic religious fervor which places the highest value on Arab and Islamic historical accomplishments and traditions. This was combined in his formative years with a strong sense of Arab and Islamic humiliation resulting from foreign, chiefly western, influence in Libya and the Arab world. The establishment of Israel and the continued existence of US and UK military bases in Libya and elsewhere were seen by Qadhafi as symbols of that humiliation. Nasser’s efforts to unite other Arab states as a necessary step towards asserting Arab power and overthrowing the foreign-sponsored state of Israel inevitably made the Egyptian leader Qadhafi’s hero and model. This outlook was reinforced by the shock of the 1967 war, the loss of more Arab territories to Israel, the lack of involvement by Libya then in the Arab cause, and the widespread corruption in Libya during the last years of the Monarchy.

Accordingly, after seizing power in 1969, Qadhafi immediately and successfully brought about US and UK withdrawal from Libyan bases. Since then he has vigorously pursued longer-term objectives of ridding Libya and the Arab Middle East of other forms of foreign influence. His objectives include the elimination of foreign oil concessions and even of non-Arabs from Libya; ridding the Arab world of foreign bases and alliances; the overthrow of Arab governments, such as Morocco and Jordan, which countenance foreign influence; promoting international recognition of Arabic; and supporting Muslim co-religionists around the world with money and arms.

Qadhafi sees his role as the successor of Nasser to redeem and unite the Arabs, under his own leadership if possible. He regards the planned Libyan merger with Egypt this year as the necessary first step.

Qadhafi seems prepared to sacrifice a measure of Libyan independence to achieve these goals, while retaining control over certain key areas, such as Libyan finances. Libya’s weak national tradition may facilitate his task, although Libyans generally are suspicious of foreigners, including Egyptians, and they are resentful of any foreign effort to remind them of their cultural inferiority or to detach them from their newly acquired wealth.

Libya’s primary objective under Qadhafi’s leadership has been the mobilization of the Arabs to bring about the elimination of Israel as an independent Jewish state and the restoration of their homeland to the Palestinian Arabs. He judges the leadership of his brother Arabs, as he [Page 45] does that of the United States, chiefly in terms of their attitude toward Israel. Inasmuch as the United States is seen as the chief guarantor of Israel’s existence, normal US-Libyan government relations in any field becomes virtually impossible, including technical cooperation. Indicative of his depth of feeling regarding Arab rights and past Arab humiliations, are Qadhafi’s pronouncements that the United States and United Kingdom and their oil companies must be punished for their exploitation of the Arab world.


1. Interests

The principal US economic interest in Libya is the American-dominated oil industry which represents about 80 percent of Libya’s production of 2.3 million barrels daily. The American investment in the industry has a net book value in excess of one billion dollars and a market value of well over four billion. The annual repatriated profits of the eleven American companies producing oil in Libya in recent years have averaged between $400–500 million, a significant positive element in the deteriorating American balance of payments.

Libya has also become an important source of low-sulphur crude oil for Western Europe, particularly Germany, Italy and France whose suppliers are principally the American producers in Libya. Libyan oil exports to the United States are relatively modest. However, they could become more important because of the low-sulphur quality of Libyan crude and our pollution regulations.

Thus, in terms of oil the United States is deeply interested in Libya because of the size and earnings of the American petroleum investment in that country, the volume of Libya’s production during a period of world-wide shortages, the quality of the oil, and the dependence of Western Europe on Libya as a nearby source of energy. In addition to these economic-commercial interests, the United States is also concerned with the physical security of some 2,800 Americans resident in Libya, most of whom are associated with the oil industry.

Libya’s substantial earnings from the industry—about $2 billion annually—help to finance an ambitious economic development program. This program provides a significant market for American exports of equipment, technology and managerial skills. Libya could become a much larger market for the United States if the political relations between the two countries were to improve.

The United States has an interest in the political stability and peace of the Middle East and Africa. Libya’s vast financial resources endow it with the capability of disruptive political and military activities in those areas.

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Finally, because of its lengthy coastline and position athwart the central and eastern Mediterranean, Libya could have a strategic significance to the United States in the event of hostilities in the area. Because of its geography, Libyan territory could be used to interdict US air and sea traffic in the region.

2. Objectives

A. Political/Strategic Objectives

The primary US political objective is to counter Libya’s disruptive political activism in the Middle East, Africa and in the Mediterranean and elsewhere to encourage any possible constructive role it could play given its financial resources.

(1) With respect to the Middle East, Libya pursues an extremist policy. Libya opposes the existence of Israel, argues for its liquidation by military means, and seeks to counter a negotiated settlement in any form. Its policy has been one of strong support of the Palestinian guerrillas and terrorists by arms, money and training. No solution to the Arab-Israeli problem based on UN Security Council resolution 242 would be acceptable to Libya under Qadhafi’s leadership.

(2) Libya supports subversion or insurgency against Morocco, Jordan, Ethiopia, Chad, the Philippines, Northern Ireland and possibly Lebanon and Sudan. Its primary motivation in each case is to undermine regimes which in its view are not sufficiently militant on the Arab-Israeli issue, are tolerant of US or Soviet influence, or are engaged in suppressing armed Palestinian or Muslim movements within their territories.

(3) US interests in the Mediterranean have recently clashed with Libya following Libya’s declaration of a “restricted area” within a 100-mile radius of Tripoli International Airport. Libya asserts the right to control the entrance of aircraft or ships within this restricted area—a right which the United States disputes. On 21 March Libyan fighter aircraft fired at an unarmed USAF C–130 reconnaissance plane flying within the restricted zone. On subsequent flights when a similar USAF aircraft flew in international airspace within the 100-mile zone, Libyan fighters limited their patrol to within the 12 nautical mile sea frontier and did not attack the USAF aircraft. Libya has, however, publicly and repeatedly denounced such reconnaissance flights as provocative incursions of Libyan airspace and territorial waters. The United States has denied any hostile intentions toward Libya, but our attempts to engage Libyan authorities in a meaningful dialogue on the issue of airspace have been fruitless. Complicating the situation is Libyan fear of attack by Israel supported by US intelligence or armed forces in the Mediterranean, as evidenced by the laying of minefields off Tripoli harbor in June.

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Libya plans to establish a Libyan Flight Information Region (FIR) over the Mediterranean adjacent to Libya, and may eventually seek to interfere with similar reconnaissance flights or other flights by exercising a right to control and restrict aircraft movements within this region. Libyan attempts to enforce unilateral extensions of control over international waters and air space, particularly in the confined area between Libya and the southern coast of Crete, could possibly pose recurring problems for planned NATO and US activities beginning in 1975 at the new air weapons training center and target range based at Tymbakion.

A major US objective, therefore, is to prevent Libya from unilaterally restricting US military movements in the Mediterranean.

(4) We seek to establish meaningful communication with the Libyan Revolutionary Command Council (RCC) in pursuit of the above objectives. The RCC has rejected all our attempts to do so. Failure to establish such communication virtually stops any resolution of differences between the two governments. Our inability to establish such communication is almost entirely due to the RCC identification of the United States with Israeli interests and objectives.

B. Economic Objectives

(1) Continued Access to Libyan Oil

A prolonged cutoff of Libyan oil production, currently about 2.3 million barrels per day, would severely strain European supplies and necessitate a draw down of European oil stocks. Since there is little surplus oil production capacity elsewhere and little spare capacity of oil tankers, continued access to Libyan short haul oil is important to the economic strength of Western Europe.

The United States imports about 200,000 barrels per day from Libya; denial of access to this low sulphur crude would interfere with air pollution requirements. More importantly, a Libyan cutoff combined with growing US oil import requirements would put us in the politically awkward position of competing with Europe and Japan for available foreign oil supplies.

(2) Continued Role of US Companies in Libya

We wish to assist American companies in retaining control of the oil produced from their concessions in Libya. If the concessions were expropriated, even if the oil continued to flow, the American companies would lose earnings and would have more difficulty in meeting their marketing obligations in Europe. The US balance of payments would also suffer by the amount these companies have repatriated to the United States from their Libyan operations (more than $400 million annually).

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(3) Avoid Disruptive Effect of Libyan Oil Negotiations on Oil Agreements Elsewhere

US oil companies are currently negotiating with Libya on “participation” in their oil concessions with Libya. A Libyan participation agreement which undermined the participation accords concluded or in the process of conclusion in the Persian Gulf could hurt both the larger US commercial interests in Gulf oil and possibly undermine conservative Arab governments in the Gulf, making them more susceptible to political pressures to use oil as a political weapon against US-Middle East policies.

(4) Expansion of US Exports

Libya is a potentially significant market for US exports because of Libyan development expenditures budgeted at over $1 billion annually. A vigorous export program directed to Libya is important if American exports ($85 million in 1972) are to cover rapidly increasing US imports of Libyan oil. Last year our trade deficit with Libya was about $30 million.

C. Cultural Objectives

US political contacts at high levels of the Libyan regime are rare. Routine contacts are possible at lower official levels. The United States has been successful in maintaining some contact with the Libyan populace, chiefly through US oil industry employees in Libya and the nearly 1,000 Libyan students in the United States, about one-third of whom are at the graduate level. It is in the long-term interest of the United States to preserve this contact and, if possible, to expand it. Institutional arrangements also continue between the American Friends of the Middle East and the University of Libya.

D. Other Objectives—Passport Policy

Libya is seeking to force other governments to write passport information in the Arabic language. For legal, administrative, budgetary and political reasons, we seek to avoid inserting official Arabic translations or printing Arabic in US passports.


1. Foreign Intervention and Political Activism

A. In the Middle East

Qadhafi has some popular appeal outside of Libya because of his efforts to restore Arab pride and by his successes in standing up to the big powers. His thinking may be too simplistic for the political or military elites in other Arab countries, but he is respected as a dynamic [Page 49] leader. His Islamic fundamentalism has not struck much of a chord in the urban centers of other Arab states, and it is here that the sources of power rest. Nevertheless, because he has shown himself willing to act against foreign military bases, to challenge the great powers and oil companies and even the use of foreign languages, and because he has his country’s wealth to support his convictions, other Arab leaders while deploring him privately, are careful not to appear less “Arab” or “nationalistic.” His personal incorruptibility and the austerity of his personal life contrast favorably with that of many other Arab leaders.

(1) Arab-Israel Dispute

Libya can play a disruptive—but not a decisive—role in the Arab-Israeli dispute. Libyan territory offers Egypt some strategic depth in case of new Arab-Israeli hostilities. Libyan-purchased Mirage fighter-bombers transferred to Egypt in the event of a new war would provide Egypt with a possible capability of low-altitude missions against Israel proper. Preparations have already been made for the basing of such aircraft in Egypt, and Libyan Mirages have in fact been present in Egypt in significant numbers (about 20 in recent months). However, the addition of these aircraft either to the Egyptian or their presence in the Libyan inventory does not substantially affect Israel’s military superiority in the Middle East.

Despite Libyan insistence on a military solution in the Middle East, Sadat has continued to prefer political and diplomatic channels to try to effect Israeli withdrawal. It seems clear that, in the event of a merger, Sadat would not permit Qadhafi to assume a position where Qadhafi would be able to decide on a resumption of hostilities with Israel.

Qadhafi has had more success in inducing a number of sub-Saharan African states to loosen their ties with Israel than he has had in winning Egyptian support of his military approach to the Middle East problem.

(2) Terrorism

Libya supports terrorism by financial contributions, arms and by training facilities in Libya. Libyan “volunteers” have been deployed in support of the fedayeen in Lebanon, but only in token strength. Libya granted asylum to the escaped fedayeen responsible for the Munich massacre of Israeli Olympic athletes. Libya may have lent moral and logistical support to the Black September Organization operation in Khartoum during which two US diplomats and a Belgian diplomat were murdered. The opening of Palestinian offices in other countries in Africa with Libyan support spreads the threat of Palestinian terrorist actions farther afield. Libyan financial support is an important factor in the persistence of terrorist activity, one aim of which is to prevent the [Page 50] settlement of the Arab-Israeli dispute on any but the most extremist Palestinian terms—i.e., by the elimination of Israel as a Jewish state.

(3) Subversion

Qadhafi intervened openly against the leftist coup in the Sudan in July 1971, intercepting a British airliner with members of the coup regime aboard, and readying Libyan troops which he was reportedly prepared to send had not Numeiri staged a comeback on his own. Although Qadhafi’s opposition to a communist-dominated government in the Sudan was of benefit to our own interests, the general thrust of his activities has been contrary to our interests, even in the Sudan. Although specific evidence is lacking, Libya may have been involved in some way in the murder of the two US diplomats in Khartoum. Qadhafi may now be supporting subversion against Numeiri because of Sudan’s lack of militancy on Arab issues. Libya supported the fedayeen against the Governments of Lebanon and Jordan. The Libyan role has not been decisive in their cases.

B. In Africa

African states and regimes friendly to the US—or Israel—are prime targets for Libyan intervention, mainly by financial means, but not infrequently by military support. Qadhafi has called for the overthrow of the Moroccan Monarchy, has trained and supported Moroccan insurgents, and given Moroccan exiles radio broadcasting facilities; he has supported the Eritrean insurgents against Ethiopia with arms and money; he has airlifted Libyan troops to support Amin in Uganda; and through promises of economic assistance, he has induced Chad, Uganda, Burundi, the Central African Republic, Mali and Niger to break relations with Israel.

C. Activism Elsewhere

Libya supports the insurgents in Northern Ireland and the Muslims in the Philippines. Libya supported Pakistan with F–5 fighter aircraft after the 1971 Indo-Pakistani War, and supported Malta’s hard stand on negotiations with the United Kingdom and NATO. He has shown an interest in supporting anti-US activities in Latin America and has attempted to undermine the US position in Panama.

2. Economic Nationalism

A. Oil Industry

Libya seeks complete ownership and control over its oil industry, expelling all foreign companies and non-Arab nationals. It has made major strides in this direction, forcing increased Libyanization of oil company personnel, imposing production limitations and controls, na[Page 51]tionalizing all oil marketing operations, nationalizing BP in 1971 and nationalizing Bunker Hunt in June 1973. It now seeks further control through “participation” agreements in oil concessions.

Qadhafi has stated he is limited in achieving his goal of complete control only by the shortage of skilled Arab personnel and (at least until recently) by the ability of oil companies to block the sale of nationalized oil in consuming countries.

B. Third Country Impact

Libya has been a pace-setter within the Organization of Petroleum Exporting Countries (OPEC), making demands usually beyond those made by other oil producers and setting the stage for whip-sawing expatriate firms between the Gulf and North Africa. Since the first big price increase won by Libya in September 1970, the effect has been a constant escalation of payments per barrel to oil exporting governments. The movement towards “participation” in oil concessions was also set off in part by the fear of Persian Gulf countries of appearing too accommodating towards the oil companies in the wake of achievements won by Libyan militancy.

Libya has been a consistent advocate of the use of Arab oil resources as a political weapon to undermine western and particularly US support of Israel. It has begun to lay the groundwork for an Arab boycott of oil shipments to the west in the event that Arab-Israeli hostilities were to resume.

3. Policies towards large Powers

Although Libya’s hostility towards the United States is formidable, its hostility towards the Soviet Union is almost equally so. Qadhafi’s devotion to Islam and Arab nationalism impels him to keep at arm’s length the atheistic Soviets, whom he regards as only another imperialist foreign power. Libya purchases Soviet arms, but limits technical assistance and seeks to avoid any longer-term political or military dependence on the Soviet Union.

Qadhafi looks to the Third World and to a Western Europe as increasingly independent of the United States and increasingly reliant on Arab oil as sources of political support for Libya and for the Arabs in general. France and Italy particularly have been wooed by attractive commercial and military sales opportunities. Access to their sophisticated military and civilian material is valued by Libya.


1. Outlook for the Regime

There is no significant internal threat to the Qadhafi regime. Qadhafi retains the personal loyalty of fellow members of the RCC. The [Page 52] leadership is supported by the only power capable of threatening the regime—the army. Qadhafi’s security is reinforced by the presence of Egyptian army and security forces. Qadhafi has repeatedly threatened to resign; any likely successor is apt to come from the present ruling group and would probably continue the general lines of Qadhafi’s policies.

A. Internal Stability

The Libyan Government generally enjoys the passive support of the dour, inward-looking Libyan population which has had no meaningful experience with participation in self-government. With the exception of the demonstrations of June 1967 and February 1973, Libyans have shown little inclination for risk-taking political activism. (The Libyan populace played no significant role in the military coup of September 1969, which was engineered entirely by a small group of army officers.) The regime’s policies of reducing foreign influence, closing bases, taking over foreign companies, and reducing foreign presence have been generally popular. Its militant stance towards Israel finds popular acceptance as long as it entails no self-sacrifice or personal threat to individuals. Qadhafi’s personal honesty, undoubted sincerity and incorruptibility, have won support for his regime. Rising Libyan oil revenues have been distributed to broad social groups through increases in wages, greater benefits for the army, and ambitious public works projects such as housing.

Nevertheless, the regime is not without its opponents. While there has been no real challenge to Qadhafi’s leadership, the RCC and “Free” officers who came to power with Qadhafi, and elements of the broader Libyan population have been divided over the planned merger with Egypt. The opposition to union has been serious, and Qadhafi’s determination in this matter could prove to be a critical test of his leadership and to the continued cohesion of the ruling military collegium. A military coup cannot be ruled out, but there is no conclusive evidence of any conspiracies. Nor is there any assurance that a successor military regime would adopt a significantly less hostile attitude toward the United States.

Libyan news dispatches have mentioned the Ba’ath Party and “communist” elements as engaging the anti-regime activities. Old regime exiles have also attempted abortive actions against Qadhafi. None of these groups appears capable of mounting any effective opposition.

B. Opposition to Egyptians

Potentially, the most significant source of opposition to the regime could stem from Libya’s relations with Egypt. The influx of as many as 200,000 Egyptians in Libya since 1969 has already led to numerous inci[Page 53]dents and violence between the two nationalities. Should the influx of Egyptians increase to the point where many Libyans felt their jobs or social structure threatened, or should the planned merger with Egypt go forward in areas which appeared to threaten vital interests of important groups—such as the Army—a reaction could result which would pose a threat to the regime. Opposition to political integration with Egypt is particularly strong in Cyrenaica, which has a long history of dislike of Egyptians and of governments based in Tripoli.

C. Other Sources of Discontent

Qadhafi has launched a “Cultural Revolution” aimed at shaking broad numbers of Libyans from their political lethargy. This revolution appears under control and poses no threat to the regime. Qadhafi’s Islamic fundamentalism is not supported by most Libyan city-dwellers, but it is not an issue which evokes strong opposition.

2. The Merger with Egypt

Whatever the form that the “union” initially takes, we believe both countries will proceed at the outset in their own way as before, with neither party able to dominate the other and with continued friction between them. Initially, the chief effect may be in combining Egyptian and Libyan diplomatic missions and the reduction of Embassies in Tripoli to some lower status.

To the extent a union is a strong one, it will be dominated by Egypt. Bolstered economically with Libyan oil wealth, Egypt would probably continue to pursue its quest for a favorable political solution to the Arab-Israeli dispute. Being in a stronger economic position, Egypt might also be tempted to pursue more activist policies in inter-Arab affairs, but we do not foresee Sadat adopting the extremist Libyan approach to international politics.

Unless there were to be a significant rise in Arab-Israeli tensions, we would expect that Egyptian moderation might temper Libyan extremism in dealings with American and other foreign oil companies. At the same time, we and the companies would be dealing with a relatively cosmopolitan government in Cairo rather than trying to cope with a head-strong, inexperienced and xenophobic junta in Tripoli. Having acquired substantial oil resources, Egypt could be expected to play a more active role in international oil affairs.

A merger with Egypt might also attenuate some of the more bizarre policies espoused by the Libyans, such as the demand for the translation of foreign passports into Arabic.

3. Possible Moderation of Libyan Policies

A. Maturing of the Regime

Qadhafi’s early successes in eliminating the military bases and browbeating the oil companies seem to have made him bolder with the [Page 54] passage of time. Early disappointments with federation plans involving Egypt, Syria and the Sudan have strengthened his determination to carry out a merger with Egypt. The impunity with which he found he was able to move F–5s to Pakistan in 1971, contrary to written agreements with the United States, was followed in 1973 by the deployment of Mirages and heavy artillery to Egypt, contrary to written agreement with France and Italy. Agreements with oil companies in 1970 and 1971 which were to last five years were followed in 1973 by even more extreme demands against the oil companies that went further than those of any other member of OPEC. His success in nationalizing Bunker Hunt and BP without political or other retaliation has confirmed Qadhafi in his estimate that Arab boldness can successfully challenge the West. Finally, he is in the process of winning his latest demand, that all governments include Arabic as a language in their passports or risk Libyan refusal of entry by their nationals (including their diplomats) into Libya.

At times when Qadhafi has met firm resistance—in oil negotiations or initially on the issue of recognizing only passports which include Arabic, he has backed down or not carried through on his threats, only to raise the issue again or resume the pressure from a slightly different angle. He has been willing to improvise, but has adhered to his goals with remarkable tenacity.

In view of his successes thus far, it is reasonable to assume Qadhafi will continue to pursue his long-range goals and that he will use every means at his disposal, especially oil as a political weapon against the United States, to achieve his goals.

B. Qadhafi’s Health

Qadhafi’s physical and mental health has sometimes been suggested as a limiting factor in his tenure in office and in ability to carry out his long-range policies. His high-strung temperament has led him at times of exhaustion to retire temporarily from public view and to threaten to retire or resign if his policies were not followed. However, we see no evidence that his physical or mental health will limit his ability or willingness to govern for an indefinite period of time in the future.

C. Successors to Qadhafi

Should Qadhafi resign or leave office, he would probably be replaced by other members of the RCC who, at least temporarily, would collectively lead the RCC and the country. They would continue his general policy lines, but lacking his zeal and puritanical bent, some of them might be more flexible on some issues.

Qadhafi’s charismatic qualities have been an important force in the cohesion of the Libyan leadership. Should he disappear from the scene, [Page 55] a period of instability could ensue which would divert Libya, at least temporarily, from the pursuit of foreign adventures.

4. US Ability to Influence Libyan Actions

A. Oil Nationalization: Counter Measures

Libya is inhibited from taking over complete control of US oil companies by the shortage of skilled Arab technicians and by the threat of legal action against “hot oil.” In the long run the problem of skilled manpower, Arab or other, can be solved. In the short run a host of foreign companies—including American—will be willing to help Libya produce and market nationalized oil if the terms are sufficiently attractive to run the legal risks.

There are a number of actions the United States could take to reduce the attractiveness to Libya of an early nationalization.

(1) Boycott of Oil Sales

The United States could pursue legal means to block third-country importation of the Bunker Hunt nationalized oil for which compensation had not been paid. The US Government might intervene in US courts or seek to have other countries intervene in their courts in support of legal action by nationalized American companies to attach oil taken from them. The United States could attempt to discourage US companies and individuals from helping to produce or market nationalized oil. European cooperation in any US efforts to boycott “hot oil” would probably not be forthcoming because of Western European dependence on Libya as a source of supply.

(2) Inhibit Technical Training

We could limit the training of Libyan petroleum technicians in the United States to slow down the growth of Libya’s ability to run oil operations. However, most training is done by US companies which still have oil operations in Libya and are under pressure to Libyanize their management and technical staffs. Failure to progress toward Libyanization could invite Libyan retaliation, including expulsion of senior American management. Foreign technicians are also available to fill gaps until Libyan technicians can be trained.

As a specific sign of displeasure over the Libyan nationalization of Bunker Hunt, we could discourage the private US technical training program for the Arabian Gulf Exploration Company (AGEC) which is operating and marketing BP’s and Hunt’s nationalized oil. This program is now underway with the help of the American Friends of the Middle East (AFME). On a more limited scale, we could delay visas for AGEC trainees to study in the United States, but this would probably have little effect on AGEC’s technical capabilities. Moreover, Libya in [Page 56] retaliation could refuse visas to American managers and other technical staff for the oil companies in Libya.

(3) Blockage of Funds

Libya apparently genuinely fears that the United States and United Kingdom may block Libyan funds in case of nationalization, just as Egyptian funds in London were frozen after the Suez Canal nationalization. If the United States wished to do so, it could possibly block Libyan funds, perhaps by invoking the Trading with the Enemy Act. (The applicability of this legislation to a nationalization case is not certain.) The effect of such action on Libya would be relatively slight, since most of Libya’s $2.8 billion in reserves is held in Europe. Libya might retaliate against blockage of its funds by nationalizing all or several of the remaining US oil companies and by breaking diplomatic relations. Before taking such a drastic step, the United States would wish to consider its precedent-setting effects on international monetary transactions.

(4) Cooperation on Anti-Trust Matters

Independent oil companies in Libya without major alternate sources of production in the Middle East are most vulnerable to Libyan threat to expropriation. To bolster the smaller companies in their negotiations, we expressed in 1971 a lack of intent to prosecute the companies at that time under the anti-trust laws despite a Sharing Agreement concluded by the oil companies operating in Libya. Under this agreement, if a company is nationalized or has its oil production reduced by the Libyan government as a pressure tactic against it in the course of oil negotiations, the other companies will give that company crude oil at or slightly above cost from their own production, either from their own production in Libya or from crude production in the Persian Gulf. This agreement expires at the end of 1973 with respect to reductions imposed by the Libyan Government; it expires at the end of 1974 with respect to total nationalization or a total shutdown of a company’s Libyan production. (Bunker Hunt, nationalized in June 1973, will therefore benefit under this agreement until the end of 1974.)

To bolster the companies’ negotiating position with Libya, we might urge them to extend the Sharing Agreement for a longer period of time, and indicate our continued intention not to prosecute under the anti-trust laws as long as implementation of the agreement was required to help those companies hurt during negotiations with Libya.

B. Possible US Leverage

(1) Arms Sales from the United States

We have not tied approval of arms sales to Libya with any quid pro quo expected from Libya in return. We have been reluctant to tie [Page 57] arms sales, for example, to the continued role of US companies in Libya, although the Libyans have hinted at making such a connection with us and in fact have done so with the Italians. Our view has been that once we agreed to any connection, the Libyan regime could blackmail us endlessly. Our leverage in regard to further arms sales to Libya now is, therefore, essentially negative—disapproval would show opposition to Libyan policies and might risk Libyan retaliation of some kind, but approval of arms sales is not likely to gain us any political benefits.

(a) Additional C–130s

Potentially, the most sensitive leverage we have against Libya is our ability to deny authorization for the export to Libya of eight additional C–130s, contracts for which were signed in 1972 between Libya and Lockheed. Deliveries are scheduled to begin this fall and Lockheed is expected to submit applications for export licenses late this summer.

When the contract was signed in the spring of 1972 we informed the Libyan Government in writing that the US Government would only decide on the licenses in the light of all the existing circumstances at the time Lockheed applied for them. We have since told Lockheed that it is unlikely the applications will be approved.

Lockheed’s contract with Libya called for advance payments totalling more than $30 million; we know that payments totalling about $28.5 million have been made. If we do not approve the licenses, Lockheed will return Libya’s deposit without interest if it is able to sell the aircraft to another customer within one year, minus any amount Lockheed receives below the price paid by Libya.

A US refusal to approve the export licenses could seriously exacerbate US relations with Libya.

(b) F–5s

In June 1969 the United States concluded a sales agreement with the former Libyan regime covering eight F–5s. (Ten other F–5s were delivered from the United States to Libya under an earlier contract, of which eight are still flying.) No payments were made by the old or the new regime on the 1969 order and none was requested by the United States. From time to time, the Libyans, most recently during the UN session last year, have raised the question whether the planes would be delivered. On each occasion we have replied that the matter remained “under consideration.” Circumstances and relations between the United States and Libya have obviously changed in the four years since the sales contract was signed. It is doubtful that the Libyans any longer expect delivery of the planes (their fighter aircraft needs would appear to have been abundantly met by the purchase of 110 Mirages), but the [Page 58] fact that the United States could and did deny the F–5s to the new regime, without ever saying so, undoubtedly rankles the RCC. Denial of delivery of the planes does not appear to have moderated LARG actions.

(c) Military Sales from Third Countries

We have approved the sale of major military equipment of US origin from third countries to Libya. Most of these have been from Italy, including heavy artillery, helicopters, and armored personnel carriers. Some of this equipment has reportedly been transferred to Egypt, contrary to Libya’s contract with Italy. We could decide not to approve sale of any further US-controlled military equipment from third countries to Libya. Some of this equipment is probably available to Libya from other non-US sources, and it is doubtful whether our denial of future such sales would exert any meaningful restraint on Libyan policies or capabilities.

(d) Maintenance Contracts

Lockheed has a pending contract to continue the services of its technicians for maintenance and training of Libyans in the operation of the eight C–130s it already possesses. The Libyans also have an arrangement with Greece for maintenance of the F–5s. These contracts represent an important potential bargaining lever for us with Libya. Were we to suspend the maintenance contract for these aircraft, most probably would be inoperative in a matter of months, although Libya might be able to find limited alternate maintenance assistance from countries such as Pakistan.

(e) Spare Parts

The United States sells Libya spare parts for aircraft we have previously sold. This includes spares for F–5s, sold through Foreign Military Sales arrangements, and spares for C–130s which are sold by Lockheed with licenses from the Office of Munitions Control. Libya has also used Greek aircraft repair facilities. Libyan C–130s have made periodic trips to Greece to deliver, and later pick up, repairable components for F–5 aircraft and J–85 engines. Libya may also be getting F–5 spares from Greece. An embargo on the acquisition of such spares, both from the United States and third countries, probably would deny Libya the use of these F–5 and C–130 aircraft after a period of time. The F–5s are important to Libya for training pilots for the more advanced French Mirage aircraft. The C–130s are important as lift for troops and supplies in support of governments friendly to Libya, such as Uganda, or insurgents. They are also a significant logistic link between Libya and Egypt and symbols of Libya’s activism abroad.

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A total embargo of spare parts either for the C–130s or F–5s probably would not be felt immediately since Libya is believed to have stockpiled spares and to be searching for alternate sources of spares outside the United States.

(f) Other Direct US Military Sales

Export license applications have been made for the sale of a number of lesser military items from the United States to Libya, including portable military radios, navigation equipment, antennas and other electronic equipment. Some of this equipment is for the establishment of the Libyan Flight Information Region (FIR). Most of this equipment is available from other foreign manufacturers; thus, denial of these sales would have only a marginal impact on Libyan capabilities and attitudes.

(2) Passport Policy: Leverage Against Libyan Nationals

One of the most difficult problems in our relations with Libya stems from Libya’s insistence that it will only recognize passports which contain an official translation of passport information into Arabic. Although some persons have been exempted, this requirement has been used to exclude most diplomats, tourists, and others Libyan authorities deem unnecessary to admit. USG employees, diplomats accredited and resident in Tripoli, and diplomatic couriers have been denied entry on grounds their passports were not in Arabic, even when they possessed valid Libyan visas. American Embassy personnel cannot leave Libya since replacement personnel cannot be sent. Libyan authorities can exclude at will oil company dependents as well as school teachers in the oil company school and medical personnel in the oil company clinic. Such a change would undermine oil company morale and impair the effectiveness of their operations.

Virtually all governments, including the French, British, Italian, German and Spanish, have decided to insert an Arabic rubber stamp into the passports of their nationals and thereby, hopefully, satisfy the Libyan demand. However, there is no evidence to date whether Libya will be satisfied with the rubber stamp procedure; certain of its officials have indicated that this procedure will be acceptable only temporarily and that the Libyan Government will still require that passports be printed in Arabic.

The United States has not accepted the Libyan passport requirement, contending that each government has the right to decide for itself the nature of the travel documentation for its nationals. We are also concerned over the precedent that would be set by agreeing to the Libyan demand. (The US position has been to adhere to the recommendation of a United Nations Commission in 1963 that governments issue [Page 60] their passports in their own national language and either in French or English.) Also, the printing of US passports in Arabic would pose serious administrative and budgetary problems for the United States. Finally, a US concession to Libya on this point would be regarded as still another political triumph by Qadhafi.

We have responded to Libya’s passport policy by temporarily delaying the issuance of visas to most categories of Libyans visiting the United States. Exceptions have been made for Libyan officials going to the United Nations, businessmen dealing with US companies, and students. By far the largest category of Libyans coming to this country are students, now numbering nearly 1,000. It has been our belief that denying students entry into the United States would have no meaningful effect on Libyan passport policies and would jeopardize whatever longterm US interest there may be in developing a cadre of US-trained Libyans.

The one area where we have some leverage with the passport problem is Libyan Government employees coming to this country for training. Libya is anxious to obtain training for its personnel in areas such as air controlling, electronic maintenance, agricultural training, and to a lesser extent in business administration. When such training is with USG agencies, such as the Federal Aviation Administration, no loss to private US firms would be involved if we held up visas to the Libyan candidate. However, most of this training is with private US firms and is associated with contracts for the sale to Libya of equipment and services. If we held up visas to such trainees, US firms would suffer. US displeasure over Libyan policies, however, would be apparent.

(3) Influence of Other Arabs on Libya

In an effort to seek changes in Libyan policies we could consider an approach to other Arab countries, such as Tunisia and Algeria, and ask that they indicate to Libya our desire for improved relations and possibly offer to send a special emissary to Libya to see how this could be done.


1. Whether the United States Should Maintain Diplomatic Representation in Libya

This issue arises in view of strained relations between the United States and Libya, the difficulty in developing any dialogue with the RCC, the likelihood of Libya’s union with Egypt, and the difficulties of operating the mission because of limitations on staff and numbers of personnel resulting from Libyan passport policy.

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Pro 1. The Mission makes possible intelligence gathering and other reporting on the Libyan scene. Absence of an official presence in Libya could significantly weaken our ability to gather intelligence on Libya.

2. We still have a consular and protection function which diplomatic presence can facilitate; our departure would be a psychological blow to the resident US community and US oil companies. The US community relies on the Embassy for emergency communications and coordination of E&E planning.

3. Our presence would permit us to benefit from any change in the Libyan regime from the outset; experience has shown that it is difficult to re-establish diplomatic relations with Arab states once they are broken.

4. Should we initiate a break, we would be handing Qadhafi what he may be looking for: a way of ending the US presence in Libya.

5. Libya might retaliate to a break with a gesture of defiance such as seizure of one or more of the American oil companies or harassment of US citizens.

Con 1. Initiating a break in relations ourselves would signal our displeasure with Libyan policies, especially to other Arab countries.

2. Communications on important matters with the Libyan regime could still be made through an Interest Section or third parties.

3. Intelligence on Libya could still be gathered to some degree without our official presence in Libya.

4. Our ability to gain consular access to protect American citizens is already negligible; our departure would be little real loss to the effective consular protection afforded Americans.

5. US companies in Libya could still make their own emergency E&E arrangements without our official presence.

2. Whether the United States Should Continue Arms Sales to Libya

A. Should the US Authorize Export of the Lockheed C–130s?

This issue arises out of the impending application by Lockheed to export eight C–130s to Libya, beginning in September 1973.

Pro 1. We have never told either Lockheed or the LARG specifically that we will refuse to allow export of the aircraft;

2. Refusal to allow export of the planes would risk a major confrontation with Libya; diplomatic ties may be broken, more US oil companies may be nationalized.

3. Denial of the C–130s will not inhibit Libya from purchasing aircraft from other countries, possibly from France or the Soviet Union.

4. Such sales preserve some American contact with the Libyan armed forces.

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5. The United States benefits from the exports and the company benefits from the business.

Con 1. Libya’s actions toward the US have become increasingly hostile and challenging; there is no national interest requiring us to strengthen its armed forces.

2. Increased airlift augments Libya’s ability to move arms and other material to the Palestinians and insurgent groups. It may also support subversive activities in countries friendly to the United States, e.g., Morocco.

3. At some point, the US Government should reply to Qadhafi with a firm “no”; all the efforts to seek an improvement in our relations have come from the American side.

4. We would not achieve any significant change in US-Libyan relations by an affirmative response; our major difference over the Middle East would remain and this is the touchstone of the US-Libyan relationship.

5. We have told Lockheed that US Government approval of the deliveries is unlikely.

6. We can expect criticism from Israel and elements of US domestic and Congressional opinion if we permit the export.

B. The F–5s

This issue is a residual one, now four years old. It may be dormant. Substantially, the same arguments exist in this case for and against delivery as in the case of the C–130s, except that the F–5s were covered by a government-to-government FMS agreement and, unlike the C–130s, there is no risk of financial loss. Our unwillingness to fulfill the contract could be regarded as improper. However, there are escape clauses in the FMS agreement which the US Government could invoke in its favor if it wished to do so, including the fact that the benefits the United States expected to receive as a result of the sale (continued use of Wheelus) are no longer available.

C. Should the United States Authorize Third-Country Sales to Libya?

This issue arises out of the requirement that USG authorization be obtained before military items or technology manufactured under an American license by another country, e.g., helicopters from Italy or F–5s from Spain, may be exported to Libya.

Pro 1. We gain political benefits in our bilateral relationship with the government of the third-country manufacturer.

2. The US firms benefit from these sales through license fees and sale of components.

3. In some cases, sales from western third countries might preempt sales from the Soviet bloc.

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Con 1. The United States gains no political benefit from Libya from third-country sales.

2. Commercial benefits to the United States would be greater from direct US sales than from sales through third countries.

3. By agreeing to such sales, the United States probably increases the military capability of Egypt to which the Libyan-purchased arms would move in the event of Middle East hostilities.

4. Such sales can become open-ended; the arguments (political or social) used to justify individual sales, e.g., by Italy, are of a long-term nature and could be used for justifying future sales.

5. We can expect criticism from Israel and from elements of US Congressional and public opinion for permitting the export.

D. Should the United States Continue to Authorize Sales of Spare Parts and of non-Lethal Military Equipment, such as Communications Material?

Pro 1. The equipment in question does not by itself significantly add to the Arab military balance with Israel.

2. In view of (1) above, there is no point in risking a confrontation with Libya on the matter of military spare parts.

Con 1. Libya is an unfriendly country; there is no reason why we should continue to supply its military establishment.

2. A cut-off of spare parts and of the sale of new military equipment of any character, including communication equipment, would terminate a military supply relationship that has become increasingly incongruous.

3. The United States has never retaliated against Libya either for its actions or pronouncements; if it wished to do so, a US cut-off of military spare parts and denial of export authorization for other equipment would be one means of registering our displeasure.

3. Whether to Continue Reconnaissance Flights

Pro 1. Continuation of the reconnaissance flights shows our determination to exercise our right to fly through international airspace, non-recognition of the Libyan restricted area over the Mediterranean 100 miles from Tripoli, and our determination not to be intimidated by Qadhafi’s threats and bombast against “spy flights.”

2. Acceptance of a Libyan-imposed restricted area could encourage bolder moves of this kind by Qadhafi, posing difficulties for US and NATO activities and operations in the Mediterranean.

Con 1. Continuation of the flights could lead Qadhafi to take further action against US oil companies in Libya or to break relations. (Qadhafi probably fears these flights are connected with Israeli plans for attacks against Libya and regards them as highly provocative.)

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2. The intelligence gathered by these flights is only marginally significant.

3. Qadhafi would not gain a propaganda victory by suspension of the flights since he does not know when or how often they are scheduled.

4. An incident resulting from the reconnaissance flights could be embarrassing in our relations with Greece, where many reconnaissance flights originate. Greece seeks not to antagonize the Arabs, and might restrict our use of Greek airfields for such flights, thus circumscribing the intelligence benefits acquired through almost daily flights to other areas.

4. Whether to Promote Cultural Cooperation and Travel

Pro 1. Issuance of visas to Libyan students and cooperation by private US groups with the University will lead to a cadre of US-trained Libyans who may better understand the United States and with whom we may be able to deal more effectively in the future than with the parochial zealots now in power.

2. Providing visas to Libyan trainees assists private US firms which are training them in connection with commercial contracts.

Con 1. It is questionable whether US training will change the outlook of Libyan students on any fundamental foreign policy issues which divide the United States and Libya.

2. By issuing visas to Libyan Government employees we eliminate any leverage we may have in changing Libyan visa policies, troublesome to US businessmen and to US officials.

3. No private US firms are hurt by denying visas to Libyan Government employees seeking training with USG agencies, such as the FAA, as distinct from private American firms.

5. Whether the United States Should Send a High-Level Emissary

Pro 1. It would show our willingness to explore the possibility of avoiding a continued deterioration in our relations. The gesture would be seen as statesman-like in other Arab countries.

2. If his mission were unsuccessful in identifying a feasible basis for improved relations, we could show we had made every effort to avoid a confrontation.


To have a realistic chance for success, an emissary would have to offer concrete proposals in areas of primary policy interest to Libya, such as the Arab-Israeli problem or arms sales.


Decisions on key issues will fall broadly within three areas: 1) actively exploring the possibility of an accommodation with the regime in [Page 65] the interest of improved relations; 2) maintaining a low profile and letting events take their course in the belief there is little we can do realistically to improve relations with Libya; or 3) taking actions which will highlight areas of conflict in the belief this path will minimize the damage Libya can do to our interests. Decisions on different issues of course can fall in more than one of these areas. Consequently, although the following options are described in an ascending order toward “confrontation,” individual courses of action under each option could be combined, depending on the circumstances and objectives at any given time. Four general policy alternatives are suggested below.

1. Explore Possibility of Improved Relations

Send a high-level emissary to explore the possibility of identifying a basis for improved Libyan-US relations. If such a basis were found:

—approve delivery of the additional C–130s; approve export of other non-lethal military equipment for which export licenses have been made; approve continuation of the sale of spare parts and of maintenance agreements for military aircraft;

—suspend reconnaissance flights;

—relax visa procedures;

—take no diplomatic action on nationalized oil.

Pro. This would maximize the possibility we could maintain an official presence in Tripoli and might diminish Libyan suspicions of the US. It would also establish a record of seeking accommodation should we later decide on harsher steps.

Con. Unless the US is prepared to modify its Middle East policies in a way meaningful to the Libyans, such gestures would be regarded as such and would have little or no effect in Libya.

2. Low Profile, Do Nothing Directly Against Libya

—avoid public or private comment on Libya;

—do not respond to further Libyan provocations such as denunciations of the US in the UN;

—take no action on export license applications for C–130s; [1. DOD questions including no action on C–130 delivery as “low profile”; Libya has made substantial payments ($28.5 million) to Lockheed, and the requirement for the next payment, due November 1973, is likely to precipitate a confrontation with Libya. The actual extent, however, of the Egyptian merger may provide ample ambiguity to justify delay or perhaps to preclude deliveries.] make non-committal replies to Libyan requests for information regarding status of the applications;

—not seek good offices of other Arabs;

—take no public stance re oil negotiations or nationalizations;

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—continue reconnaissance flights, on infrequent basis.

Pro. We avoid open showdowns on specific issues with Libya.

Con 1. Essentially passive with the public initiatives being left to the LARG.

2. Departs by silence from established US policy on such matters as nationalization.

3. Discounts ability of Lockheed to stall Libya indefinitely on the delivery of the C–130s.

3. Low Profile, but Signal Willingness to Counter Libyan Actions

—send no emissary;

—inform other Arabs that Libya hurts the Arab cause;

—join oil companies in courts to block the sale of nationalized oil;

—suspend sale of spare parts;

—disapprove export license applications for C–130s;

—continue reconnaissance flights on regular basis.

Pro 1. Moderately activist in defense of US interests;

2. Reassures US companies of our support;

3. Ends an anachronistic military supply relationship.

Con 1. Could precipitate retaliation over the non-delivery of the C–130s.

2. Probably would not prevent sale of “hot” oil.

4. Confrontation

—highlight Libyan subversive and terrorist actions in public;

—disapprove export of C–130s, sale of spare parts, and other military equipment from the US or third countries;

—continue reconnaissance flights;

—severely restrict visa procedures for Libyans;

—initiate break in diplomatic relations.

Pro 1. These actions would publicly show our strong disapproval of the Qadhafi Government; might help to isolate it from other, more cautious Arab governments, including Egypt.

2. Several or all such actions would boost the morale of friendly, conservative Arab governments in the Persian Gulf and might reduce Qadhafi’s influence in other Arab countries and his ability to promote the use of oil as a political weapon against US-Middle East policies.

3. It would also encourage domestic Libyan opponents to Qadhafi.

Con 1. These actions would heighten the risk of vindictive Libyan actions against US oil companies and Americans in Libya, including harassment or nationalization.

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2. It would further reduce our limited ability to protect US citizens in Libya, and would be a psychological blow to the American community and oil companies.

3. It would not change any of Qadhafi’s basic policies towards the Middle East problem or terrorism, and might reinforce them.

4. Embassy Tripoli would be eliminated as a useful source of political reporting.

5. Libya could continue to get many of the arms it seeks from countries other than the US.

  1. Summary: This study was prepared in response to NSSM 185, which ordered a review of U.S. policy toward Libya.

    Source: National Archives, Nixon Presidential Materials, NSC Institutional Files (H-Files), Box H–200, NSSM 185. Secret. Appendices A through G are attached but not published. All brackets were printed as footnotes in the original.