It seems that negotiations have begun on draft resolutions which would:
- grant a further (and final) six-month extension of DFI immunities;
- formally terminate the Oil-for-Food programme; and
- remove Chapter VII restrictions imposed on Iraq with regard to weapons of mass destruction (WMD).
DFI
Resolution 1483 established the DFI to meet Iraq’s humanitarian and economic reconstruction needs following the fall of the Saddam regime in 2003. The DFI was provided with immunities to prevent creditors from seizing Iraqi oil revenue and financial assets. It holds the proceeds of petroleum export sales from Iraq as well as balances from other frozen Iraqi funds. In December 2009 the Council adopted resolution 1905, extending the arrangements and related immunities for the DFI for one year and calling on the government of Iraq to put in place an action plan and timeline to ensure the transition to a post-DFI mechanism by 31 December 2010.
On 10 November the UN Controller, Jun Yamazaki, briefed the Council on the DFI. Iraq requested that the DFI immunities be extended for another year. The Controller noted that it was for the Council to assess Iraq’s proposal.
Oil-for-Food
The Oil-for-Food programme was established by the Council in 1995 in resolution 986 to allow Iraq an exemption to the sanctions regime to sell oil via a UN managed programme in exchange for humanitarian goods. Funds to pay suppliers were held in a UN Iraq escrow account. The programme was in practice terminated on 31 December 2007, but a residual issue remained relating to open contracts where suppliers claimed to have delivered goods to Iraq but were unpaid. Resolution 1483, which established the DFI, also envisaged the termination of the Oil-for-Food programme after which surplus funds would be transferred from the Iraq escrow account to the DFI.
In his November’s DFI briefing, the UN Controller said that with regard to remaining outstanding letters of credit for Oil-for-Food suppliers, Iraq was willing to pay 32 of the bills. He noted that if the Secretariat does not receive requisite documentation for the others the Council has the option of cancelling the remaining letters of credit, though this should be subject to Iraq’s providing an indemnity for all UN activities connected with the programme.
WMD
Resolution 687 of 1991 obligated Iraq to destroy its weapons of mass destruction and not use, develop, construct or acquire chemical, biological or nuclear weapons. The resolution also proscribed ballistic missiles. (Subsequent resolutions reaffirmed these obligations.)
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