OIL SALES  AND  UN ALLOCATION ACCOUNTS
account	purpose
59%	humanitarian goods/services for center-south Iraq
25%	compensation fund
13%	humanitarian goods/services for northern Iraq
2.2%	operational costs for UN humanitarian agencies
0.8%	operational costs for UN weapons inspectors
(Initially, the 59% account was 53%, the 25% account 30%, and there was a 1% account pursuant to SCR-778.  Later, the 30% account was reduced to 25% and the 1% account was eliminated. The total 6% was added to the 53% account.)
Since August 1990, UN member states are prohibited from purchasing Iraqi oil products. In 1991 an oil-for-food program was first offered vide SCRs 706 and 712, but the Government of Iraq (GoI) declined to cooperate. In April 1995, SCR-986 was passed, but the GoI declined again. In January 1996, however, UN-GoI discussions began and a Memorandum of Understanding (MoU) outlining the implementation process was agreed to in May. Oil began flowing in December 1996 and the first goods, food, arrived in March 1997.  The oil-for-food program is implemented in approximately 180-day/6-month phases.  Each phase is authorized by a separate SCR.  Ten UN agencies based in Iraq are involved in implementation.  In center-south Iraq the GoI manages the program and the UN observes (monitors).  In the Kurdistan region of northern Iraq, ten UN agencies manage the program on behalf of the Government of Iraq in quasi cooperation with the Kurdistan Regional Government.
phase	value ($ million)   as of 10 Jan 03
	oil sales	59%	25%	13%	2.2%	0.8%
1	2,150	1,269	538	280	47	17
2	2,125	1,254	531	276	47	17
3	2,085	1,230	521	271	46	17
4	3,027	1,786	757	394	67	24
5	3,947	2,329	987	513	87	32
6	7,402	4,367	1,851	962	163	59
7	8,302	4,898	2,076	1,079	183	66
8	9,564	5,643	2,391	1,243	210	77
9	5,638	3,326	1,410	733	124	45
10	5,350	3,157	1,338	696	118	43
11	4,589	2,708	1,147	597	101	37
12	5,639	3,327	1,410	733	124	45
13	1,411	832	353	183	31	11
total	61,229	36,125	15,307	7,960	1,347	490
Pipeline fees.  From the sale proceeds of oil legally exported, an estimated amount for pipeline fees for the Iraq-Turkey Pipeline (ITP) is assessed and deducted before account percentages are applied. All five accounts are charged pipeline fees.  BUT, actual pipeline fees are not revealed. Oil spare parts.  $300 million was allocated in each of phases 4 and 5, and $600 million in each of phases 6 to 13.  These amounts are deducted from only the 59% and 13% accounts. According to distribution plans submitted by the Government of Iraq and approved by the UN Secretary General, however, these charges were to be treated the same as pipeline fees. Interest.  Throughout the program, substantial funds have remained unspent in commercial bank accounts.  OIP and two Security Council members (UKG and USG) confirm that interest amounts accrue to the accounts in which they are earned.  Despite various requests to the UN for data, the interest amounts have yet to be revealed.