PRESS BRIEFING BY UN LEGAL COUNSEL ON `OIL-FOR-FOOD' AGREEMENT
Press Briefing
PRESS BRIEFING BY UN LEGAL COUNSEL ON `OIL-FOR-FOOD' AGREEMENT
19960520
FOR INFORMATION OF UNITED NATIONS SECRETARIAT ONLY
At a Headquarters press briefing this afternoon, Under-Secretary-General for Legal Affairs and United Nations Legal Counsel Hans Corell briefed correspondents on the Memorandum of Understanding signed this morning between the Secretariat of the United Nations and the Government of Iraq on the implementation of Security Council resolution 986 (1995) -- the "oil-for-food" formula. That formula authorizes States to permit the import of up to $1 billion in Iraqi petroleum and petroleum products every 90 days to meet the humanitarian needs of the Iraqi people.
Mr. Corell characterized the talks between the two delegations, which were carried out in over some 50 sessions, as "business-like, professional discussions". He expressed the hope that the Memorandum would be applied and implemented in the same spirit in which it was negotiated. He stressed that the complexity of the negotiations had required that he say little to the press while the talks were in progress. The focus had always been on the goal of making it possible, as required by resolution 986 (1995), for the Secretary-General to report to the Council that he had taken the actions necessary to ensure effective implementation of the resolution. The Secretary-General had been closely and actively involved with the process since April 1995, initially in convincing the Iraqi Government to take part in the negotiations, and then closely following the talks through today's signing of the Memorandum of Understanding.
He went on to say that there were many technical and complex issues to be dealt with in the Memorandum. The primary goal and overall purpose of the agreement was to ensure the effective implementation of resolution 986 (1995). Of particular importance in the Memorandum was the mention of the distribution plan for the humanitarian aid -- a key element of the implementation of the resolution. The Iraqi Government would now be responsible for preparing such a plan to be approved by the Secretary-General, according to the terms of the resolution. Mr. Corell reminded correspondents that the whole concept behind the process was a humanitarian effort to ease the effect of Council sanctions.
Another significant element of the Memorandum was the establishment of the escrow account, he continued. The Secretary-General would make the choice of banks to hold that account. The agreement also dealt with the provisions on the sale of petroleum and petroleum products. Iraq would be entering the oil market only under the provisions of the resolution. Special arrangements for its entry would be made which included export through two named outlets -- the Kirkuk-Yumurtalik pipeline through Turkey and the Mina al-Bakir oil
UN Legal Counsel Briefing - 2 - 20 May 1996
terminal. The Memorandum also contained provisions on the monitoring of the sales by inspection agents at the outlets and by the Committee established by Council resolution 661 (1990), which monitors the sanctions against Iraq.
The procurement of humanitarian supplies, according to the Memorandum, would be made through normal commercial practices by the Government of Iraq, he said. A special arrangement for purchases would be in place for the three northern Governates. In normal practice, the Government would contractually arrange purchase with the supplier; the exporting State of the supplier would submit all relevant documents to the Committee established by Council resolution 661 (1990), which would then take action and allow the issuance of a letter of credit by the bank holding the escrow account from the proceeds of the sale of oil supplies. The Memorandum attempted to address Iraqi concerns over pricing and other market factors to be affected by the special arrangements. It was through the overall plan that Iraq would demonstrate to the United Nations the practical implementation of the distribution of the humanitarian supplies.
Concerning the planning, purchase and distribution in the three northern Governates, he said the Memorandum called for the United Nations inter-agency programme in Iraq to determine how the procurement of humanitarian supplies in those areas would be undertaken. The guiding factors for those arrangements would be the sovereignty and territorial integrity of Iraq and the principle of equitable distribution of humanitarian supplies throughout the country.
He said the Memorandum had been described by the Secretary-General as a step -- an important step -- in a complex procedure. The Committee established by Council resolution 661 (1990) would now commence work and would issue fairly detailed procedures for monitoring. The Secretary-General then had a number of decisions to make, including the banks for the escrow account. Practical arrangements also had to be made for the monitoring of the oil sales and for the certification of the arrival of goods in Iraq. Arrangements also had to be set up for the observation of the equitable distribution of supplies in Iraq by the United Nations and the agencies which were active in Iraq. When all those steps had been taken, the Secretary-General could then be in a position to approve the distribution plan and report to the Council under the terms of resolution 986 (1995). At that point the resolution would become effective.
To a question about the nature of the United Nations inter-agency humanitarian programme, Mr. Corell said it was the programme which would be responsible for the planning, purchase and distribution of humanitarian supplies. It would work closely with the Government of Iraq. The programme would involve a number of agencies. Under-Secretary-General for Humanitarian Affairs Yasushi Akashi would be in charge of that end of the operation. Basically it would all be built on the existing system in place in Iraq.
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On monitoring, he said the observation process would depend on how detailed the distribution plan submitted by the Iraqi Government was. Greater detail in the plan would lessen the need for observation. The necessary observation would be applied by the United Nations.
To queries about a letter from Iraqi Ambassador Abdul Amir Al-Anbari attached to the Memorandum, Mr. Corell said the letter was simply a unilateral expression by the Government over two matters not covered in the Memorandum, namely the cost in production and transportation of the petroleum and the mention of a third possible outlet for export in Syria. He reiterated that the letter was not part of the Memorandum, but was simply attached to the agreement.
He added that it would be wrong for him to indicate any time-frame before oil would begin to flow. There were steps still to be taken. The United Nations side would do all it could to speed up the procedures. Both parties were interested in coming to a speedy conclusion of the process and he did not foresee any lengthy procedures. Because of the nature of the oil market mechanism, he did not want to speculate on a specific timetable.
To questions about difficult issues in the negotiations, he said that the split in the export of oil through the two points was never a difficulty in the discussions, because it had been addressed in resolution 986 (1995). On the choice of the bank for the escrow account, he said that it was specifically the responsibility of the Secretary-General to choose the bank and he would naturally consult with the Government of Iraq in the process.
Regarding the influence of certain members of the Council on the negotiations, he said the Secretary-General had been very careful to keep all members informed of the progress of the talks. In various degrees the members expressed their views -- some members offering more input than others. The effect of that input should not be overestimated. The goal had always been to reach an agreement in the spirit of the Council resolution. The document represented a solid agreement between the two parties.
He noted that it was not known until this morning that actual agreement had been reached. He had always been optimistic in the process and had believed that such agreement was possible.
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