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Iraq Faults Oil Money Setup

November 8, 2000

BAGHDAD, Iraq (AP) _ Iraq’s government is questioning the benefits of a U.N.-approved agreement that lets it sell oil to pay for food and humanitarian goods, a top official said.

In a letter to U.N. Secretary-General Kofi Annan, Deputy Prime Minister Tariq Aziz said more than $11 billion in revenues from Iraqi oil sales under the oil-for-food program are tied up in a U.N. escrow account.

``This is idle and frozen money which the Iraqi people are not benefiting from,″ Aziz said. His letter was obtained by The Associated Press at U.N. headquarters and was carried by the official Iraqi News Agency on Wednesday.

An exception to broad U.N. sanctions imposed for its 1990 invasion of Kuwait, the oil-for-food program allows Iraq to sell its oil provided the proceeds are used to buy humanitarian goods for its 22 million people.

``The fact that the money coming from the export of oil is not being used for the purchase of food, medicine and other basic needs ... raises big questions from the Iraqi people,″ Aziz said.

He did not threaten to halt oil exports, which now total about 2.3 million barrels a day, but questioned their necessity with billions of dollars in the U.N. account and hundreds of contracts in limbo.

As of Nov. 3, about $2.3 billion worth of contracts were on hold in the sanctions committee comprising U.N. Security Council members, the vast majority of them blocked by the United States.

Equipment to improve transportation and telecommunications in Iraq accounted for nearly half of all contracts on hold, according to figures released Tuesday by the oil-for-food program.

Aziz said more than 500 contracts worth another $1.3 billion were being delayed in a separate U.N. committee that vets Iraqi oil sales and imports under the program.

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