|OIL SALES AND UN ALLOCATION ACCOUNTS|
|59%||humanitarian goods/services for center-south Iraq|
|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|
|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.
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.