Tracking Number: 245819
Title: "Frozen Iraqi Oil Assets Seized to Pay UN Bills." THe UN Security Council overwhelmingly adopted Resolution 778 October 2 seizing Iraq's frozen oil-related assets to pay
some of Baghdad's war debts, including food and medical supplies for Kurds. (921002)
Translated Title: Confiscan bienes Iraquies congelados para pagar deudas a ONU. (921002)
Author: AITA, JUDY (USIA STAFF
WRITER)
Date: 19921002
Text:
FROZEN IRAQI OIL ASSETS SEIZED TO PAY U.N. BILLS
(Money will secure much-needed food, medicine) (720) By Judy Aita USIA United Nations Correspondent United Nations -- The United Nations Security Council overwhelmingly adopted Resolution 778 October 2 seizing Iraq's frozen oil-related assets to pay some of Baghdad's war debts, including food and medical supplies for Kurds.
U.S. Ambassador Edward Perkins called the resolution "a reasonable and proportionate response to Iraq's intransigence."
In a statement to the council Perkins noted that "the humanitarian efforts directly benefit the Iraqi people, and like the other United Nations programs, they were instituted in response to problems Iraq itself created."
"We firmly believe that the Security Council was right in waiting no longer for Iraq to implement these resolutions," he said. "The needs of the Iraqi people, and of the United Nations, required the Security Council to ensure that these critical programs are securely funded. This resolution accomplishes that aim."
The resolution, passed by a vote of 14 to 0 with China abstaining, was sponsored by Belgium, France, Russia, Great Britain, Japan, Hungary, and the United States.
According to the lengthy resolution, states which have frozen oil profits or petroleum or petroleum products owned by Iraq must transfer up to 50 percent, but no more than $200 million of the money, to a U.N. escrow account. The funds will then be used by the United Nations to pay some of Iraq's bills for food and medicine, compensation to those suffering damage from Iraq's invasion of Kuwait, and costs of U.N. operations to destroy Iraqi weapons and mark the Iraq/Kuwait boundary.
The precedent setting resolution "is really enormously complicated" on a legal and operational level, but "in fact it's fairly simple and direct" in its intent, one Western diplomat said.
Once Iraq begins to sell oil -- either under the council's supervision or when sanctions are lifted -- the money will be returned to the accounts.
The United Nations has no reliable estimate on the amount of money which may be collected, but Western diplomats feel that the world body can realize between $300 million and $1,000 million. Countries are obligated to report to the United Nations on the Iraqi assets they hold, including the funds which have not been used to pay prior claims and the oil which was in transit at the time of the Kuwait invasion.
The funds are in the United States and some other banking systems. The oil assets are primarily in Saudi Arabia and Turkey, diplomats said.
The $200 million/50 percent ceiling set by the resolution, diplomats said, is designed to spread the burden among all the states involved.
The resolution also urges states to make voluntary contributions to the escrow account.
U.N. Secretary General Boutros-Ghali will use the money to support the operations and pay Iraqi obligations established in other council resolutions. Those resolutions require Iraq to pay the costs of the Special Commission (UNSCOM) destroying Iraq's chemical, biological, nuclear and ballistic missiles, and to pay for half the cost of the Boundary Demarcation Commission. Thirty percent of the money will go to the U.N. Compensation Fund to begin paying claims for compensation, particularly the small claims by the workers who had to flee due to the war and lost everything, one Western diplomat explained.
In August 1991 the council authorized Iraq to sell up to $1,600 million worth of oil over a period of six months under strict U.N. supervision to insure that Baghdad met its obligations under the Persian Gulf war cease-fire agreement. Iraq has refused to accept the terms and conditions of the council's scheme for the past year. However, Iraqi diplomats have recently been hinting that they are ready to resume talks with the United Nations.
Nevertheless, council members insisted that Baghdad's offer does not effect the seizure. If and when Iraq does begin to sell oil under the U.N. plan, the money will merely revert to the seized accounts.
Under the new resolution, uses of the money are clearly defined: the spending is totally in the hands of the United Nations, not individual countries, and the money will be returned at a future date so other claims against Iraq will be paid, diplomats also stressed.
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File Identification: 10/02/92, POL507; 10/02/92, EUR521; 10/05/92, AEF108; 10/05/92, LEF103; 10/05/92, NEA105; 10/05/92, LSI102; 10/06/92, NAA203
Product Name: Wireless File
Product
Code: WF
Languages: Spanish; Arabic
Keywords: LEGAL SEIZURES/Policy; REPARATIONS/Policy; WAR CRIMES; PERSIAN GULF WAR; PETROLEUM EXPORTATION; IRAQ/Economic & Social; HUMANITARIAN AID/Policy;
KURDS; PERKINS, EDWARD/Policy; IRAQ-US RELATIONS/Policy; SANCTIONS; UNITED NATION
Thematic Codes: 1UN; 1NE
Target Areas: EU; AF; AR; NE
PDQ Text Link: 245819; 245990
USIA Notes: *92100207.POL
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