Interest on Muammar Gaddafi’s frozen funds in Belgian banks is not subject to UN sanctions and has not been misused or embezzled, the Libyan Investment Authority (LIA) insisted following reports to the contrary.

The interest payments amounting to nearly €5 billion ($5.7 billion) had been deposited in “special authority accounts abroad,” until the end of October 2017, when the payments stopped, the LIA said, as quoted by the Saudi-owned Al-Arabiya network. The accounts are in Luxembourg, the UK and Bahrain, the Libyan agency noted.

Gaddafi’s assets were frozen in 2011, when NATO intervened on behalf of rebels in Libya to overthrow the long-time leader. Citing British and Belgian legal documents, the LIA insists that interest on frozen assets is not subject to the sanctions, and had been regularly paid out to their accounts. Where exactly the funds went, however, is still being investigated, the agency said in a statement provided to RT.

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“We are confident that the LIA has remained fully in compliance with the sanctions regime and that no money from the Belgium accounts has been misused,” or moved since the end of October 2017, the agency said. “We want to assure all Libyans that all LIA frozen assets are safe and secure.”

In late October, Brussels-based public-service broadcasting organization RTBF reported that Belgium prosecutors had launched an investigation into whether Belgian banks paid out interest and dividends on accounts frozen under UN sanctions in 2011.

This was based on a claim by the panel of UN experts on Libya in early September, which said the interest payments violated the sanctions regime and “could lead to the misuse and misappropriation of funds.”

Reacting to reports in the Belgian media, the LIA said the information on withdrawing the interest of UN-frozen Libyan funds represented “mere allegations” and there was “no evidence at all stipulating that the funds were used to fund armed groups.”

READ MORE: Billions missing from frozen Gaddafi accounts in Belgium - reports

Nearly $70 billion from the Libyan Investment Authority was seized across Europe and North America shortly after the UN introduced the sanctions. However, the European authorities had reportedly frozen only the principal amount, allowing the interest and dividends earned since 2011 to be paid out.

The work of the LIA has been negatively impacted by the long-standing political instability in war-torn Libya. Over the past seven years, the organization has seen four presidents, some of them installed by armed groups in control of Tripoli who interfered in LIA's work, according to the UN report.

EDITOR’S NOTE: The original version of this story relied on Al-Arabiya’s interpretation of the LIA statement. The LIA has since contacted RT and provided a copy of the statement that does not suggest that the money was embezzled or misused by militant groups, although the investigation of what happened to the funds remains ongoing.

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