UN authorizes Iraqi oil pricing in Euros

Published October 31st, 2000 - 02:00 GMT

The UN sanctions committee on Monday gave authorization for Iraqi crude oil exports to be paid for in euros instead of dollars, diplomats said. "There is no legal basis to block the request," from Iraq for the switch to euros, a United Nations diplomatic source said at the end of the committee meeting. 


The chair of the sanctions committee, Dutch ambassador to the UN Peter van Walsum, will now write to the UN Secretariat informing it of the decision taken by the committee, the diplomats said. 


The committee, which met for three hours in a closed session to discuss the Iraqi request, comprises the 15 UN Security Council members. Baghdad had let it be understood that it might interrupt its oil exports if the UN refused to give permission for the switch - Iraqi Oil Minister Amer al-Rashid had described the US dollar as "the currency of an enemy state." 


The committee also asked the UN Secretariat to report back in three months on the effect of the changeover to euros. The Secretariat was also asked to be in direct contact with the Iraqi authorities to solve any technical problems that the changeover might bring, diplomats said. 


All revenue from Iraq's crude oil exports is handled by the UN, under the sanctions regime imposed on Iraq after it invaded Kuwait in 1990. A report by UN Treasurer Suzanne Bishopric said the switch could cost at least $270 million a year in exchange costs and lost interest on the dollar account. 


The report also warned that the move could mean delays in settling accounts, because not all purchasers of Iraqi oil or their bankers would necessarily hold euros in large quantities. Earlier Monday, the Iraqi government told the UN it could postpone until November 6, from November 1, the deadline it had set for switching its transactions to be denominated in euros. — (AFP, Geneva) 


© Agence France Presse 2000

© 2000 Mena Report (www.menareport.com)

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