Tracking Number:  193838

Title:  "UN Approves Limited Oil Sales by Iraq." The UN Security Council voted to allow Iraq to sell up to 1.6 billion dollars worth of oil over a period of six months to be used in part for the purchase of humanitarian supplies. Corrected by NT-501. (910815)

Translated Title:  L`ONU autorise la vente limitee de petrole Irakien.; Ventas limitadas de petroleo por Irak aprueba ONU. (910815)
Date:  19910819


08/19/91 HU.N. APPROVES LIMITED OIL SALES BY IRAQ SH(Security Council passes three resolutions) (1070) BYBy Judy Aita BIUSIA United Nations Correspondent

TUnited Nations -- The U.N. Security Council voted August 15 to allow Iraq to sell up to $1,600 million worth of oil over a period of six months to be used in part for the purchase of humanitarian supplies.

The oil sale was part of a package of three resolutions aimed at ensuring that Iraq meet its obligations under the U.N. Persian Gulf war cease-fire agreement and provide basic food and medicine for its civilians.

In a statement to the Security Council, U.S. Ambassador Thomas Pickering said the "humanitarian resolution...intends primarily to get humanitarian assistance to those in Iraq who need it most."

He said the resolution does not lift U.N. sanctions against Iraq. "In fact, it will strengthen the sanctions by preventing the Iraqi government from seeking political gains through the misery of the Iraqi people which it has caused," Pickering said.

In passing the resolution, he noted, the Security Council "has put the secretary-general and the United Nations apparatus at the center of the process of providing humanitarian assistance to Iraq."

One of the resolutions approved August 15 by a vote of 15 to 0 says that not more than 30 percent of Iraq's oil export profits must go into the U.N. Compensation Fund. The 30 percent figure applies to the special one-time oil sale as well as to future Iraqi oil revenues after the council lifts the U.N. sanctions imposed against Iraq following its invasion and occupation of Kuwait in 1990.

According to the Security Council cease-fire resolution (number 687), Iraq is liable under international law for any direct loss, damage, depletion of natural resources, or injury to foreign governments, nationals and corporations resulting from its invasion and occupation of Kuwait. The resolution also set up the compensation fund to oversee the reparation payments. The Compensation Commission's governing council will set the actual percentage of revenues collected each year using the 30 percent ceiling as a guideline.

In May, Secretary General Javier Perez de Cuellar recommended the 30 percent ceiling. He noted that Iraq's oil exports were expected to reach about $21,000 million by 1993 with imports absorbing about 48 percent of export earnings and debt servicing approximately 22 percent.

The second Security Council resolution approved August 15 authorizes a one-time exception to the sanctions to permit Iraq to sell up to $1,600 million of oil to purchase humanitarian supplies and to begin making compensation for war-related obligations.

The resolution passed by a vote of 13 to 1 (Cuba) with Yemen abstaining.

However, the council is imposing stringent restrictions on the sales, which must be approved by the council's Sanction's Committee. The sales must be in three equal portions with the council reviewing Iraq's needs before approving each portion. The money must go directly into an escrow account established by the United Nations and administered by the secretary general to ensure that needed humanitarian supplies are purchased and then distributed equitably. The secretary general must submit to the council within 20 days a report on Iraq's humanitarian needs and how the transactions are to be handled.

The resolution also requires that on the first day of each month Iraq provide the secretary general and "appropriate international organizations" with an accounting of its gold and foreign currency reserves inside the country and elsewhere.

According to the resolution, just over $1,000 million will be used to purchase humanitarian relief supplies, while 30 percent of the sales, or $48 million, will go to the compensation fund. The remaining profits will be used to pay Iraq's share of the expenses of the Boundary Demarcation Commission, the costs of the U.N. Special Commission monitoring the destruction of Iraq's chemical, biological and nuclear weapons, and U.N. costs incurred in helping oversee the return of all Kuwaiti property seized by Iraq.

The resolution followed a report in July by Prince Sadruddin Aga Khan, special U.N. delegate for humanitarian needs in the gulf, who said Iraq is facing "a major food disaster" in about three months and recommended that Baghdad be allowed to sell oil to buy humanitarian supplies. He said that "it is absurd and indefensible for the United Nations to pay for these needs when numerous other urgent crisis 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," Sadruddin said, adding that a suitable control mechanism and monitoring system be put in place to ensure that supplies reach the needy.

The last resolution passed August 15 demands that Iraq provide "full, final and complete disclosure" of all aspects of its programs to develop weapons of mass destruction and ballistic missiles with a range greater than 150 kilometers "without further delay."

The measure also demands that the special commission and IAEA (International Atomic Energy Agency) be granted unconditional and unrestricted access to any facilities they want to inspect. Iraq must immediately stop concealing, moving, or destroying any material or equipment related to its nuclear, chemical, biological or ballistic weapons.

In the resolution, passed by a vote of 15 to 0, the council demands that Iraq allow the inspectors to conduct aerial surveillance without interference of any kind, and make airfields and aircraft accessible to the U.N. teams.

The council condemns Iraq's failure to cooperate with the special commission and the IAEA and its breaching of the cease-fire provisions. It also condemns Iraq's non-compliance with its safeguards agreement with the IAEA.

The resolution was drafted after the special commission inspection teams found large multi-million-dollar nuclear facilities which Baghdad had omitted from its declarations to the U.N. The teams said that the type of facilities found in Iraq were not practical for peaceful atomic energy uses, and they reported that Baghdad had gone to great lengths to conceal its activities.

The special commission also reported that the size and magnitude of the chemical weapons and related facilities found in Iraq were four times larger than Iraq had admitted possessing. Iraq subsequently acknowledged that, despite it's earlier claims, it had a biological weapons research program as late as 1990. NNNN

File Identification:  08/15/91, PO-407; 08/15/91, EU-413; 08/15/91, NE-416; 08/15/91, NA-404; 08/16/91, NT-501; 08/16/91, AE-504; 08/16/91, AF-503; 08/16/91, AR-506; 08/16/91, AS-505; 08/16/91, EP-506
Product Name:  Wireless File
Product Code:  WF
Languages:  Arabic; French; Spanish
Thematic Codes:  1UN; 1NE
Target Areas:  EU; NE; AF; AR; EA
PDQ Text Link:  193838; 193923; 193936; 193882