Global Policy Forum

United Nations - Iraq is requiring companies vying for contracts through the U.N. "oil-for-food'' program to show they have no compensation claims against the government for its 1990 invasion of Kuwait, a U.N. official said. Since December 1998, prospective companies have submitted to the U.N. Compensation Commission in Geneva 16 requests for letters to prove they have no claims against Iraq, the commission's Michael Raboin told Dow Jones Newswires on Wednesday.

Over the same period, more than 20 firms have withdrawn compensation claims against Iraq, presumably as a condition to continue receiving contracts for food, medical supplies or oil-sector spare parts through the oil-for-food program, a Western official familiar with the issue said on condition of anonymity.

The compensation commission was established in the aftermath of the 1991 Gulf War to compensate victims of Iraq's invasion of Kuwait. Since then, it has received 2.6 million claims from individuals, corporations and governments seeking more than $300 billion. Iraq pays compensation with 30 percent of the revenue generated by oil sales under the U.N.-approved oil-for-food program.

While Iraq is barred from freely exporting its oil under U.N. sanctions, the program allows Iraq to sell limited amounts - $5.26 billion over six months - to fund the compensation commission and to buy humanitarian aid for its 22 million people. Iraq hasn't placed conditions on companies buying oil under the program, officials said.

To date, the compensation commission has approved claims of over $3.3 billion for nearly 868,000 individuals who had to leave Kuwait or Iraq between the 1990 invasion and 1991 cease-fire, or who suffered serious injury or the loss of a spouse, child or parent.

Iraq's U.N. ambassador, Saeed Hasan, said firms that bring excessive, exaggerated'' claims against Iraq should not receive contracts. However, Hasan added that he didn't know whether his government was requiring vendors to drop claims to participate in the program.