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Iraq Claim on Blocked Import Contracts

Agence France Presse
August 3, 2000

A claim by an Iraqi official on Wednesday that import contracts worth 10 billion dollars had been blocked under the UN's "oil for food" programme appeared to contradict United Nations data. Trade Minister Mohammed Mahdi Saleh said in Baghdad that the United States and Britain had held up contracts worth more than 10 billion dollars under the programme, which was established in 1996.

Figures from the office which administers the programme showed that, as of May 31, Iraq had submitted contracts for imports worth a total of 15.66 billion dollars for approval by the Security Council's sanctions committee. The committee had authorised contracts worth 11.49 billion dollars and put 1.64 billion dollars worth on hold, the figures showed. Other contracts were being processed.

Iraq has been under UN-imposed economic sanctions since its invasion of Kuwait 10 years ago, but the "oil for food" programme allows it to sell crude in order to buy essential goods under strict UN supervision.

US and British officials in the sanctions committee have often blocked contracts for goods which they said might be diverted to the Iraqi military -- so-called "dual purpose" imports. Early this year, the committee streamlined its vetting procedures after UN Secretary General Kofi Annan complained about the number of contracts placed on hold. But contracts for food and medicine were very rarely blocked.

The UN statistics show that food accounted for 6.57 billion dollars of the total application of 15.66 billion dollars, and that health sector contracts accounted for another 1.16 billion.

In his statement, Saleh said the United Nations had deducted more than nine billion dollars earned from Iraq's oil sales, while Iraq had acquired goods worth only 7.6 billion dollars.

Under an agreement negotiated with the Iraqi government, 30 percent of the revenue from Iraq's oil sales goes to a fund to compensate victims of the invasion of Kuwait. The money is held in an escrow account in the French bank

Another 2.2 percent goes to pay for the administration of the oil for food programme, and 0.8 percent for the administration of the UN team set up to monitor Iraq's disarmament. Saleh was speaking after the director of the UN programme, Benon Sevan, arrived in Baghdad for a two-week visit.

In a statement before his arrival, Sevan said that 8.35 billion worth of humanitarian supplies and oil industry spare parts had arrived since the inception of the programme, and that another 4.2 billion dollars worth was "in the pipeline".

Sevan's figures included contracts approved by the sanctions committee since May 31. Officials here pointed out that any delays in delivery were the responsibility of Iraq's contractors, not of the United Nations.

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