Tracking Number:  191624

Title:  "Security Council to Consider Special Sale of Iraqi Oil." The UN Sanctions Committee, chaired by Peter Hohenfellner, has been asked to present to the UN Security Council a proposal to allow a one-time sale of oil by Iraq to fund a variety of programs in compliance with the UN imposed peace requirements and to meet humanitarian needs in the country. (910724)

Date:  19910724


07/24/91 * SECURITY COUNCIL TO CONSIDER SPECIAL SALE OF IRAQI OIL (Committee notes more than humanitarian needs) (900) By Judy Aita USIA United Nations Correspondent

United Nations -- Agreeing that an exemption to the U.N. sanctions which would allow Iraq to export a limited amount of oil involves more than humanitarian considerations, the Sanctions Committee July 24 decided to turn the issue over to the Security Council.

After two days of bilateral talks and a three-hour private meeting, the committee chairman, Ambassador Peter Hohenfellner of Austria, was asked to present the matter of a possible one-time sale of oil by Iraq to the council immediately. He is scheduled to offer the committee's views to an informal meeting of the council July 25.

As reasons the council must take up the issue, Hohenfellner cited the need to finance the destruction of Iraqi weapons, the work of the Iraq-Kuwait Border Commission, and the compensation fund -- all mandated by the Security Council's April 3 cease-fire resolution -- as well as the dire humanitarian situation inside Iraq.

Earlier in the week, Prince Sadruddin Aga Khan, executive delegate of the secretary general for humanitarian needs in Iraq, told the committee that the country is facing "a major food disaster" in about three months and should be allowed to sell oil to buy supplies. He stressed that "it is absurd and indefensible for the United Nations to pay for these needs when numerous other urgent crises and disasters from Bangladesh to the Horn of Africa cry out for our attention."

"Iraq has considerable oil reserves and should pay to meet these needs itself," Prince Sadruddin said, suggesting that the country be allowed to use funds from oil sales or the funds in blocked accounts to meet "essential civilian needs."

On July 16, Secretary General Perez de Cuellar recommended to the council that Iraq be allowed to sell oil and petroleum products "under strict supervision" to finance the destruction of its chemical, biological, and nuclear weapons being undertaken by the United Nations. He added that "the net proceeds of such sales would be deposited in a United Nations account to be used to reimburse the costs of carrying out the tasks...."

The cease-fire terms also established the Compensation Commission and fund from which compensation for direct losses caused by Iraq's occupation of Kuwait will be made. The funds are to come from an as yet unspecified percentage of Iraqi oil sales once Baghdad is allowed to resume production.

Talking with journalists after the private committee meeting, Hohenfellner said he will propose that the Security Council hold "very broad discussions," linking the financing of all the activities and the purchase of essential food with the possibility of the resumption of oil exports by Iraq for a limited period of time.

While the amount of oil to be sold and the timeframe were not discussed by the committee, Hohenfellner said, all the committee members "underlined the necessity that there must be a response to the humanitarian needs as outlined in the Sadruddin report."

"Secondly, he noted, "what was absolutely clear is also the very fact that there is not enough money on the side of the international humanitarian organizations to meet these needs...(donations are) simply insufficient to finance the future humanitarian activities, so it is absolutely necessary to preserve or to assure adequate financial needs."

However, the ambassador stressed that the committee was not discussing lifting the wide-ranging sanctions imposed against Iraq days after it invaded Kuwait in August 1990.

The cease-fire resolution (687) passed in April allows the council "to approve, when required to assure adequate financial resources on the part of Iraq to carry out the activities" of buying food and medicines, "exemptions to the prohibition against the import of commodities and products originating in Iraq."

That means "exemptions from the sanction regime may be allowed," he said.

Resolution 687 also required that the council review Iraq's compliance with all provisions of the cease-fire agreement after which it may determine whether to reduce or lift the sanctions. However, many council members are unsatisfied with Baghdad's cooperation on issues such as the full disclosure of its nuclear program. Thus the council will not be considering any oil sales under that provision.

While the Sanctions Committee has the authority to deal with the food and medical needs, only the Security Council itself can deal with the financing of the commissions and compensation fund, Hohenfellner pointed out. To handle all the issues separately "would be inappropriate," he said.

"All members of the committee agreed to the basic idea that we should deal comprehensively with all these different items which all relate to the same question," he said. "As all these items relate to the partial resumption of oil exports -- compensation fund, destruction of weapons, border is absolutely clear to all of them that the council should deal with all these matters comprehensively."

Committee members also stressed the importance of very close monitoring of Iraq's activities if the oil sale is allowed. Hohenfellner explained there would have to be a close watch on the exports permitted as well as the import operations -- "specifically that the goods really reach the vulnerable groups."

"Priority areas" would also have to be established, he said, listing "for instance the provision of firstly, drinking water; secondly, foodstuffs; thirdly, public health; fourth...restoration of the sewage system." NNNN

File Identification:  07/24/91, PO-306; 07/24/91, AR-325; 07/24/91, EP-315; 07/24/91, EU-307; 07/24/91, NE-305; 07/25/91, NA-406
Product Name:  Wireless File
Product Code:  WF
Languages:  Arabic
Thematic Codes:  160; 1UN
Target Areas:  AR; EA; EU; NE
PDQ Text Link:  191624