The U.S. has asked the U.N. sanctions committee to discuss means of preventing Baghdad from demanding illegal surcharges on its oil exports, diplomats said on February 9th. U.S. envoy James Cunningham sent a letter to Norwegian U.N. Ambassador Peter Kolby, who heads the committee, requesting that the U.N. oil overseers brief the Security Council on Iraqi oil sales practices.
Diplomats indicated that the overseers would be asked to make revisions in the process of granting oil sales contracts, with the goal of cutting out some of the middlemen who are reportedly paying the illegal surcharge to Iraq outside the U.N. oil-for-food program.
Under the current system, companies must register with governments in their own countries to take Iraqi crude, and the U.N. has no mechanism for punishing firms that pay the surcharge.
That is left to the individual governments, some of which oppose the sanctions and are unlikely to investigate or punish offending companies.
Diplomats suggested that the U.N. panel would consider placing more stringent requirements on Iraqi crude customers to improve monitoring.
The sanctions committee had in November sent notices to oil companies warning them not to pay any money directly to Iraq and reiterating that all oil transactions must be conducted through the oil-for-food program.
Buyers have repeatedly said that Baghdad has renewed its demands for the surcharge, although the premium is reportedly not charged to all firms and ranges from 10 to 50 cents per barrel. Iraq continues to deny that it had ever asked for the surcharge.
© 2001 Mena Report (www.menareport.com)
