of a major corporation that broke US sanctions against the North African country.

Accountant Mr. Peter Leighton stressed that Coastal International, based in Bermuda since 1980, was not involved in the deal that saw Coastal Corporation, of Houston, Texas, using a foreign based subsidiary to fulfil an obligation to the Libyans.

Oil exploration group Coastal had set up Coastal International as a non-controlled foreign corporation.

Mr. Leighton said: "It could have traded with whoever it liked but it did not. It never traded with Libya. I don't want people to think we were involved with trading with the enemy.'' Although the original company had the same shareholders as the Houston company Mr. Leighton said Coastal International was an independent company.

He added that Coastal set up another subsidiary called Holborn to fulfil an obligation to Libya when they became "the enemy'' of the United States.

It meant the Libyans supplied oil to a refinery in Hamburg, Germany, and the petrol was then marketed by Coastal.

Coastal has been subject to an investigation by Federal authorities in the United States, according to a New York Times article earlier this week.

The Times said a number of companies have seized on "porous laws'' and lax enforcement of US sanctions to do business with Cuba and Libya. Under the Trading With The Enemies Act American companies are forbidden to do business with foes of the U.S.

Major companies are accused of shipping sugar to Cuba and continuing interests in massive projects like the Man-Made River tapping water from beneath the desert to create an agricultural oasis in Libya.