As further evidence of illegal Iraqi surcharges surfaces, the U.S. and the U.K. are considering cutting the number of companies authorized to buy Iraqi crude to allow for better monitoring, diplomats said on March 9th.
Although U.N. officials have been aware of surcharges demanded on oil sales for quite some time, new reports have surfaced that foreign companies have been paying premiums on contracts for humanitarian goods shipped to Baghdad under the U.N. oil-for-food program.
Acting U.S. Ambassador James Cunningham said that: “We have evidence that kickbacks have been requested. We don’t have good evidence that they have been paid, but one assumes that this is happening. It has been going on for some time.”
Western diplomats indicated that one method for confronting the illegal surcharges would be to send a letter to suppliers of humanitarian goods asking them not to pay any premium directly to Baghdad outside the oil-for-food program. A similar letter had been sent to companies taking Iraqi crude in December.
U.N. officials and western diplomats have said that while international oil majors have shied away from paying the oil surcharge, many smaller traders have been willing to circumvent sanctions.
“The proliferation of these companies, about which we don’t know much, is part of what allows abuse.
If you have a smaller number of companies that had greater public presence, it would be easier to monitor,” one diplomat said. Many of the small companies have limited access to credit and have been relying on larger companies to resell the oil to customers, many of them in the U.S.
© 2001 Mena Report (www.menareport.com)