UN adopts smart sanction plan for Iraq; another export halt may loom

The United Nations Security Council agreed to a "smart sanctions" plan designed to increase civilian goods to the Iraqi people by streamlining import controls, US officials said May 14.

May 14, 2002

3 min read

Maureen Lorenzetti
Washington Editor

WASHINGTON, DC, May 14 -- The United Nations Security Council agreed to a "smart sanctions" plan designed to increase civilian goods to the Iraqi people by streamlining import controls, US officials said May 14.
The new sanctions protocol is predicated on the assumption that Iraq will allow the UN to resume weapons inspections (OGJ Online, May 7, 2002).

Iraq has sharply criticized the smart sanctions proposal over the past year and it is unclear what the country's next course of action will be. However, Baghdad has halted its official exports of oil over mere procedural disputes with the UN organization overseeing the oil-for-aid sales program. This program provides no revenues to the government of Iraqi President Saddam Hussein but raises funds to purchase food, medicine, and other necessities for the Iraqi people and to rebuild the country's war-ravaged oil infrastructure.

Analysts at presstime were speculating over another possible halt to the country's oil exports in protest over what Iraqi officials claimed amounts to "harassment" of Iraq with the new sanctions regime.

Iraq this month resumed exports under the UN aid program after a month's absence. Saddam withdrew Iraq's exports from world oil markets to protest Israeli troops in Palestinian areas and sought solidarity from other Arab oil exporters. They, however, refused to join the boycott. Iraq may again choose to withdraw from world oil markets in response to the new sanctions plan.

Of the total of over $52 billion received to date in the UN's escrow oil account, almost $33 billion has been contracted for humanitarian goods and oil field supplies, the US Department of State said. Of this $33 billion, about $21 billion has been delivered to Iraq. Most of the balance is either in production or pending delivery. Another $5 billion worth of contracts are on hold by the UN committee, because some items may have a possible military use to Iraq.

New system
Under the new system, effective May 30, the UN escrow account for Iraqi oil revenue and restrictions on items of potential military and military-related use will still continue. And a complete lifting of the decade-plus economic sanctions will occur only when Iraq dismantles its weapons stockpile, according to US officials.

"The US will continue to work with the UN to contain Iraq's significant threat to regional stability as we look forward to the day when a democratic and representative government in Baghdad, at peace with its neighbors, will lead Iraq to retake its rightful place in the community of nations," a State department spokesman said.