Global Policy Forum

The UN committee monitoring sanctions against Iraq has been unable to agree on a US-backed British proposal aimed at preventing Baghdad from earning millions of dollars from illegal surcharges on oil sales, the committee chairman said.

Norway's UN Ambassador Ole Peter Kolby said Monday he intends to hold bilateral meetings with some Security Council members and if that doesn't resolve the issue he will then ask the council, probably later this week, to discuss the situation and issue instructions.

The council imposed sanctions on Iraq after its 1990 invasion of Kuwait. Under the UN oil-for-food program aimed at easing the impact of sanctions on ordinary Iraqis, Baghdad can sell unlimited amounts of oil provided the money goes into a UN-controlled fund for humanitarian relief, oil industry repairs and war reparations.

Iraq and the United Nations set prices on Iraqi crude every 30 days, taking into account fluctuations in market prices. But according to officials, Iraq has been able to sell some oil below market prices, and obtain back door payments from buyers in return.

The United States and Britain have proposed that the 30-day price adjustment period be reduced to 15 days. They say this would limit Iraq's ability to slap on surcharges and get revenues outside the system. But Russia Iraq's key ally on the council and the sanctions committee has objected outright to the plan.

"So far the committee has not been able to deal with this question of the pricing of the Iraqi oil," Kolby told reporters after the committee met late Monday. "I announced to the committee that he had to bring this to the attention of the council if the committee cannot resolve this issue," he said. All 15 Security Council members are represented on the sanctions committee. Kolby said there was general support for referring the issue to the council, but he said some committee members thought it would be useful to undertake some bilateral contacts. He said he intends to talk to some council members in the next few days, but didn't identify which countries.

"I think that if we are unable to resolve it then probably in the course of this week it will be my duty to inform the council," Kolby said. "Then it's up to the council to decide whether they would like the committee to continue its work on the issue or whether they would like to give any guidance, or they may want to make a decision themselves," he said.

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