U.N. Allows Limited Sales of Iraqi Oil : Persian Gulf: Proceeds from $1 billion in crude exports every 90 days may be used for humanitarian purposes only. Baghdad official denounces offer to ease postwar ban as too restrictive.

The U.N. Security Council, in its most generous overture to Saddam Hussein since the Persian Gulf War, voted unanimously Friday to allow Iraq to sell $1 billion worth of oil every 90 days for the humanitarian needs of its people.

The resolution was swiftly denounced by Iraqi Deputy Prime Minister Tarik Aziz, who found the offer laden with restrictions. And officials in Baghdad today issued a statement accusing the resolution of “shackling the future of our people.” Neither Aziz nor the government officials rejected it outright, however.

While Madeleine Albright, the U.S. ambassador to the United Nations, and other diplomats insisted that the resolution did not ease formal U.N. sanctions, the offer allows Iraq to resume almost 25% of its prewar oil production.

In August, 1990, just before Hussein invaded and annexed Kuwait, Iraq produced 2.8 million barrels of oil a day. At the current price of $17.50 a barrel, the resolution allows production of 635,000 barrels a day. Since the war’s end, U.N. sanctions have not permitted Iraq to sell oil or any other export.

Under the new resolution, co-sponsored by the United States, the Security Council must renew authorization for the sales every six months. And Iraq would not be free to spend the money any way it liked.

Of each $1 billion, the United Nations would set aside $300 million for Gulf War reparations, $20 million to $50 million for U.N. costs and $130 million to $150 million for relief to Kurds in the northern provinces. That would leave $500 million to $550 million for Iraq to spend on food, medicine and other goods for its people. U.N. monitors would make sure that this money was not diverted for other purchases.

Albright lobbied for the resolution to head off a campaign by Russia and France to lift oil sanctions altogether. She also aimed to demonstrate that Hussein is far more responsible for the dire straits of his people than are the United States and United Nations.

“If it refuses to implement this resolution,” the ambassador said, “it will be clear for all to see, and especially to the Iraqi people, that the blame for the suffering of the people of Iraq rests not with the Security Council but with the government in Baghdad.”

U.N. Secretary General Boutros Boutros-Ghali, who described the resolution as a “first step toward the total lifting of sanctions against Iraq,” is charged with negotiating details of the plan. After the resolution was passed, he met with Aziz for an hour, a U.N. statement said without providing further details.

Aziz said after the vote that several members of the Security Council had tried to produce a resolution that was “clear of political motivations” but the United States blocked their efforts.

But the French and Russian ambassadors, who argued Iraq’s case in the council’s closed-door sessions, urged Hussein to accept the compromise resolution and sell the oil.

Soon after the Gulf War, the council passed a resolution allowing Iraq to sell $1.6 billion worth of oil for humanitarian needs. But the one-time-only sale had so many restrictions that Hussein rejected it as an infringement on Iraqi sovereignty.

The new resolution states that none of its provisions “should be interpreted as infringing on the sovereignty or territorial integrity of Iraq.”

Iraq would be permitted to sell an extra $28 million of oil every 90 days to pay for fees that Turkey may charge for use of the Kirkuk-Yumurtalik pipeline between the two countries.

The resolution mandates that the “larger share” of Iraqi oil move through the pipeline. The rest may be shipped from the Persian Gulf port of Mina al Bakr.

Iraq will also be allowed to use oil proceeds to pay for importing equipment needed to repair the pipeline.

The U.N. sanctions imposed against Iraq after the Gulf War include a total trade embargo--except for imports of food, medicine and humanitarian supplies. No government, company or individual may trade with Iraq, and all exports, including oil, are banned. A naval blockade enforces the embargo.

Also, no air traffic is allowed into or out of Iraq, and all overseas assets of the Iraqi government are frozen.

France and Russia have been lobbying for an end to the restrictions on Iraqi exports. Under their interpretation of the resolutions that ended the Gulf War, the council is obliged to lift the sanctions as soon as the U.N. Special Commission on Iraq reports that Hussein’s government has rid itself of all programs to produce weapons of mass destruction--nuclear, biological or chemical--and has agreed to submit to perpetual inspection of possible weapons sites.

The Clinton Administration, on the other hand, insists that the sanctions must remain in place until the Iraqis comply with all of the resolutions ending the war, including those requiring Baghdad to account for missing Kuwaitis and to return Kuwaiti property. Only then could Hussein be trusted to make good on his promises, Albright maintains.

The French and Russian campaign was sidetracked this week when Rolf Ekeus, chairman of the special commission, reported that Iraq has failed to account for 17 tons of material used to breed bacteria for germ warfare. Until it produces or accounts for the material, Ekeus said, he cannot declare that Iraq has ended its biological warfare program.

French Ambassador Jean-Bernard Merimee, however, still held out hope for an eventual reprieve for Iraq.

Merimee described the resolution passed Friday as “a temporary measure that will vanish when conditions are ripe” for an end to the sanctions.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

What Iraq Can Do

Highlights of a U.N. Security Council resolution adopted Friday, on a 15-0 vote, that allows Iraq to sell limited quantities of oil:

* Iraq can sell $1 billion worth of oil every 90 days or $2 billion worth over six months to meet humanitarian needs of its people. After 180 days, the resolution has to be renewed.

* The $1-billion sum can be increased by $28 million to pay tariffs that Turkey may charge for use of the Kirkuk-Yumurtalik pipeline.

* Oil sales proceeds available for Iraq’s humanitarian supplies will be about $650 million to $680 million out of each $1 billion. A 30% deduction will be earmarked for Gulf War reparations, and $20 million to $50 million more will meet other U.N. costs.

* A sum of $130 million to $150 million every 90 days is to go for U.N. humanitarian programs for Kurds in the north.

* Iraq will be permitted to import equipment needed to repair the pipeline to Turkey. It may finance these goods through letters of credit on future oil sales.

* Oil contracts require approval by the Security Council’s sanctions committee to ensure that prices are at “fair market value” and letters of credit are paid to an escrow account so that costs for compensation and U.N. expenses can be deducted.

* The resolution will take effect a day after a report from Secretary General Boutros Boutros-Ghali, whose staff has to negotiate monitoring plans and other arrangements with the Iraqi government. Such procedures will take a minimum of a month.

Source: Associated Press