updated 9/20/2004 2:55:42 PM ET 2004-09-20T18:55:42

President Bush on Monday signed an executive order lifting sanctions against Libya, rewarding the country for agreeing to dismantle its weapons programs.

The long-awaited move, announced by press secretary Scott McClellan, is expected to trigger release of more than $1 billion to families of Pan Am 103 victims.

Under terms of an earlier deal, the deadline for settlement with Moammar Gadhafi’s government is Wednesday.

Bush ended two sets of sanctions. The step would mark the latest reward from the Bush administration for Libya’s agreement last year to dismantle chemical, biological and nuclear weapons programs.

Weapons talks in London
High-level discussions on the final phase of Libya’s disarmament pledges were held Friday in London. Officials said the discussions were productive.

“This victory is thanks to more than two decades of tough multilateral sanctions and firm diplomacy sustained through Democratic and Republican administrations,” said Rep. Tom Lantos of California, ranking Democrat on the House International Relations Committee.

Lantos said that during his two visits to Libya this year, “it became clear to me that this decision is irreversible, and that the Libyan leadership has made a firm commitment to building new bridges to the United States and other civilized nations.”

The administration says Libya is to pay the new compensation after Bush agrees to lift both sanctions on air travel and a freeze on $1 billion in assets that belong to Libya or in which Libya has an interest.

$10 million per family
Libya had insisted on a lifting of those sanctions as the price for next compensation payment to families of the victims of Pan Am 103. The payment would come to $4 million per family.

In the 1988 bombing, 259 people were killed on the plane, including 189 Americans, as well as 11 people in Lockerbie, the Scottish village on which parts of the Boeing 747 rained down. Libya has acknowledged responsibility for the destruction of the Boeing 747. The families have received one compensation payment of $4 million each this far, part of a total compensation package of $10 million each. One family opted out of the agreement.

Still on the books are sanctions related to Libya’s position on the U.S. list of state sponsors of terror. If negotiations eventually lead to removal of that sanction, Libya has said it will release a final compensation payment of $2 million per family.

Libya’s erratic international behavior and sponsorship of terrorism, sometimes targeting Americans, led to adoption of the U.S. sanctions almost 20 years ago.

Bush already eased a set of minor sanctions against Libya this month.

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