02 March 2000
Text: Sanctions Committee Decisions on Iraqi Hajj Pilgrims
(UN Office of Iraq Program recounts decisions) (2010) United Nations -- The Security Council agreed on March 1 to distribute funds out of Iraq's oil escrow account to fund Iraqi hajj pilgrimages to Saudi Arabia, but Iraq has, for the third year, rejected the council's offer. According to the plan approved by the council, $250 in cash and $1,750 in traveler's checks would be given to up to 22,000 Iraqis to help pay for the cost of the hajj. Iraq, however, has insisted that the money be deposited into its Central Bank allowing for no UN oversight. According to the terms of the UN sanctions, Iraq is allowed to sell oil under UN supervision to buy food, medicine and other humanitarian goods, but the revenues go into an escrow account controlled by the UN. Suppliers are then paid from that account with the money bypassing the Iraqi regime. Following is the text of an account released by the UN Office of the Iraq program recounting the history of the dispute: (begin text) History of the discussions on making available funds to meet reasonable expenses related to the Hajj pilgrimage In February 1998, the Security Council adopted resolution 1153 (1993), paragraph 3 of which directed the Committee established by resolution 661 (1990) to authorize, on the basis of specific requests, reasonable expenses related to the Hajj pilgrimage, to be met by funds in the escrow account. Certain Security Council members, such as the Netherlands, the United Kingdom and the United States that believe such a transfer of funds is strictly prohibited by the relevant resolutions (among them paragraph 4 of resolution 661 (1990) and paragraph 11 of resolution 670 (1990), see attached). Others, such as China, France, Malaysia and the Russian Federation claim that religious activities should be exempt from such resolutions. The Committee has for three years been considering actively the various options to make available reasonable funds, payable from the escrow account, to meet expenses related to the Hajj pilgrimage. The position of the Government of Iraq on the matter is, and has always been, that the Security Council should authorize the transfer of funds from the Iraq escrow account directly to the Central Bank of Iraq, at which point Iraq would undertake the distribution of these funds to Iraqi pilgrims. In a letter dated 14 February 1998 from the Permanent Representative of Iraq, H.E. Mr. Nizar Hamdoon, to the Executive Director of the Office of the Iraq Programme, Mr. Benon V. Sevan (see attached), Iraq identified the sum of $2,000 as necessary to cover the expenses of each Iraqi in performing the Hajj pilgrimage. Taking into account the quota of 22,000 Iraqis entitled to perform the Hajj pilgrimage each year, in accordance with the quota established by the Organization of the Islamic Conference (OIC), Iraq requested the direct transfer of $44 million to the Central Bank of Iraq to be distributed by the Government of Iraq in line with its own procedures. Referring to paragraph 3 of resolution 1153 (1998), a similar request was made in a letter dated 2 March 1998 from the Permanent Representative of Iraq addressed to Chairman of the Committee, H.E. Mr. Antonio Monteiro (see attached), and again in a latter dated 10 March 1998 (see attached), in which Iraq proposed that a list of signatures confirming the receipt of funds by each and every Iraqi pilgrim would be deposited with the United Nations Office of the Humanitarian Coordinator in Iraq (UNOHCI) in order to ensure transparency in the distribution process. The Committee sought advice from the Office of Legal Affairs (OLA) as to whether the direct transfer of funds from the escrow account to Iraq in order to meet expenses related to the Hajj pilgrimage constituted a violation of the relevant resolutions. In response, OLA informed the Committee that even though paragraph 3 of resolution 1153 (1998) empowers the Committee to authorize the release of funds from the escrow account for the above-quoted purpose, it does not authorize the Committee to make such funds directly available to Iraq or Iraqi entities" and that "the transfer of funds ... are not permitted under existing Security Council resolutions" (see attached). Recognizing the importance of the pilgrimage and its significance for the Iraqi people, the Committee began to consider actively alternative options for making available the necessary funds. In doing so, the Committee considered and subsequently endorsed the possibility of utilizing specialized and pre-designated travel agents in Jordan to arrange the necessary travel arrangements for Iraqi pilgrims. Under this arrangement, it was envisaged that the Government of Iraq would be provided with serialized vouchers for distribution to Iraqi pilgrims, who would tender the vouchers to the Jordanian travel agents. Furthermore, OIP was to establish a system to ensure accountability and transparency in the distribution of these vouchers to pilgrims. The Government of Iraq rejected this arrangement and continued to insist that the sum of $44 million be transferred directly to the Central Bank of Iraq. Soon thereafter, the Permanent Representative of Iraq, H.E. Dr. Saeed Hasan, in a latter dated 19 March 1999 and addressed to the Chairman of the Committee, H.E. Mr. Peter van Walsurn (see attached), stated that in view of the fact that the Hajj was due to commence in less than one week, there was little point in continuing discussions on the matter as there would have been insufficient time to make all the necessary arrangements, had they been agreed to. Mindful of the great importance of the issue, the Committee resumed discussions again in February 1999 in advance of the Hajj season to begin shortly thereafter. Subsequent to extensive discussions, the Committee reached consensus regarding the involvement of a third and neutral party in the distribution of funds to Iraqi pilgrims. This proposal was shared with the Permanent Representative of Iraq to the United Nations. On 3 March 1999, the Government of Iraq rejected the involvement of a third party to oversee the distribution of funds and reiterated its position concerning the direct transfer of funds to the Central Bank of Iraq. The position of the Government of Iraq remained unchanged in that it maintained that the relevant resolutions did not prohibit the direct transfer of funds to the Central Bank of Iraq and that this was the only proposal it was willing to accept. The Committee immediately sought reconfirmation from 0LA of its previous interpretation that the relevant resolutions prohibited the transfer of funds. Such confirmation was subsequently received. Consequently, a draft communication from the Chairman of the Committee addressed to the Permanent Representative setting out the proposed arrangements for third party involvement in the distribution of funds was circulated to the Committee under the no-objection procedure. It was subsequently placed on hold and therefore not issued. A press communique of the Committee was drafted shortly thereafter, but due to the absence of consensus in the Committee on its content never came to be issued. Instead, on 17 March 1999, the Chairman of the Committee made a statement to the press in which he emphasized that the Committee had for sometime been actively considering options but was unable to come to an agreement with the Government of Iraq on the matter. He also seated that the Committee was determined to continue efforts in this regard. Paragraph 26 of resolution 1284 (1999), requested the Secretary-General to make the necessary arrangements for approval by the Security Council to provide for reasonable expenses related to the Hajj pilgrimage to be met by funds in the escrow account established by resolution 986 (1995). Pursuant to this, OIP has been reviewing the remaining options. Informal consultations with representatives of the Government of Saudi Arabia have revealed that it is willing to play the part of a third party in facilitating the necessary arrangements. Furthermore, at the invitation of OIP, informal and individual discussions with Argentina, Bangladesh, Canada, China, France, Jamaica, the Netherlands, Malaysia, Mali, Tunisia, Ukraine, the United States and the United Kingdom were held between 21 January and 1 February 2000 to discuss possible arrangements for making the necessary funds available for the Hajj pilgrimage. In these meetings, led by Mr. Sevan it was recalled that the Security Council and the Committee had been discussing arrangements for the Hajj for three years without success. In discussing the subject again, Mr. Sevan made very clear that he would only present the Secretary-General with a proposal that was formulated on the basis of a consensus and that would most likely be accepted by all parties concerned. If this was not the case, then he would report to the Secretary-General that despite active discussions, there was no consensus on the matter. All members expressed their willingness to continue to work towards a solution to make available the necessary funds for the Hajj pilgrimage, but were not optimistic that a successful resolution to the matter could be found. Furthermore, all members expressed their regret that the issue had been politicized. Although members were aware that all the possible options for making available the necessary funds had been proposed but rejected by the Government of Iraq, some Committee members nevertheless came forward with some suggestions. France envisaged the possible transfer of funds to Iraq, to be distributed by the Government of Iraq and the Office of the United Nations Humanitarian Coordinator through a duplicate signature system. In addition to this proposal, or possibly in lieu of it, France raised the possibility of a transfer of funds to the Iraqi embassy in Jordan, to be distributed under the supervision of the UNDP Resident Representative in Jordan, to pilgrims as they passed through Amman, also on the basis of a double signature system. In the event that there was an abuse of funds, penalties could be brought against Iraq, such as the freezing of assets in the 53 percent account. France has yet to share the proposal with the Government of Iraq. Ukraine, on the other hand, had no detailed proposal but made clear that it would be flexible in attempts to resolve the matter. China and Argentina inquired whether the issue could be resolved along the same lines as those suggested in relation to the cash component, but were informed that the issue of the cash component itself had not been resolved successfully. It transpired that some members of the Committee had consulted informally with the Government of Iraq in order to assess its position on the matter. Separate consultations by both China and Tunisia with the Government of Iraq on an informal basis revealed that there was no flexibility in Iraq's position that the Security Council should authorize the transfer of funds directly to the Central Bank of Iraq. The United States reiterated its position that no funds should be transferred to the Central Bank of Iraq but that it would be willing to accept other options such as third party involvement or the use of a voucher system in which Iraqi pilgrims are reimbursed. The United Kingdom is willing to consider any option that does not involve a direct transfer of funds to Iraq or any Iraqi entities. China and Malaysia held a different position in stating that the transfer of funds for the Hajj pilgrimage should be exempted from the rules and regulations that enforced the sanctions regime. The discussions revealed that although there is a willingness to continue efforts to find a workable solution, the Security Council maintains its position regarding the prohibition of transferring funds directly to Iraq or any Iraqi entities. Furthermore, in a meeting with the Permanent Representative of Iraq on 31 January, Mr. Sevan discussed, among other things, the issue of the Hajj and enquired as to whether there was any flexibility on the part of the Government of Iraq concerning the direct transfer of funds. Mr. Sevan was informed that Iraq was maintaining its position as before. (end text) (Distributed by the Office of International Information Programs, U.S. Department of State. Web site: usinfo.state.gov)
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