Ban outlines options to wind up oil-for-food programme

Secretary-General Ban Ki-moon has outlined options for resolving outstanding issues involved in winding up the oil-for-food programme for Iraq.

The oil-for-food programme, under which a sanctions-bound Iraq was allowed to use monitored oil sales revenue for humanitarian purchases, was phased out in 2003 under a Security Council resolution lifting sanctions on the country.

In a letter to the Council made public today Mr. Ban recalled that he had described the processing and authentication of outstanding documents relating to the programme as “slow” and had asked for a working group to meet on the issue in June.

Commenting on the latest report from the working group, the Secretary-General noted that the processing of payment for 132 letters of credit under the programme, with a value of $273 million, remained outstanding.

He also noted that the working group had found that, in a number of cases, suppliers of goods under the programme were claiming that they had delivered products, while the Iraqi Government was requesting the cancellation of their letters of credit.

The working group proposed a range of options for ending the programme. One option would be for the working group to continue to monitor progress and to process the remaining letters of credit.

Secondly, the group recommended setting up a dispute resolution mechanism to handle outstanding issues.

Thirdly, it suggested transferring funds, as well as the responsibility for administering any remaining activity under the programme, to the Iraqi Government. In this case, the Government would be required to provide quarterly reports to the Security Council on its progress in winding up the programme.

The report noted that the Government had expressed a willingness to accept responsibility for administering this process.