Summary
On the face of it, the deal struck by the United Nations Security Council in 1996 permitting Iraq to trade oil to pay for essential goods was an ideal solution. While it would help mitigate the suffering of the people under an oppressive sanctions regime, it would also prevent the regime of Saddam Hussein from channelising petro-dollars into financing weapons of mass destruction. However, due to oversight or otherwise, the scheme had a perfect loophole. It vested Iraq with the right to select its buyers for oil. It no doubt empowered a wily Iraqi regime by allowing it to potentially dole out favours. It was a scam waiting to happen.
Right from the beginning, the Iraqi regime adopted the strategy of selling oil to individuals and entities that it considered "friendly". At the same time, it sought to cultivate new alliances. After the fall of Saddam in 2003, there were serious allegations that the UN oil-for-food programme, as it was known, was a conduit for massive amounts of illicit payments. Under snowballing international pressure in April 2004, UN Secretary-General Kofi Annan appointed an Independent Inquiry Committee (IIC) under the chairmanship of former US Federal Reserve chairman Paul Volcker who was assisted by two other members, Mark Pieth of Switzerland, an expert on money laundering in the Organisation for Economic Cooperation and Development (OECD), and Richard Goldstone of South Africa, former prosecutor of the International Criminal Tribunals for former Yugoslavia and Rwanda.See the full content of this document
Extract
Oil's Not Well for Natwar ; After His Name Is Listed As a Beneficiary in Last Week's Un Report On Iraq's Oil-for-Food Programme, the External Affairs Minister Finds Himself in the Vortex of a Deepening Scandal. With the Opposition Parties Baying for His Resignation, the Government May Be Forced to Order an Inquiry Into the Affair.
Last week, the IIC submitted its final report after trawling through 10,000 boxes of papers, including detailed notings maintained by the erstwhile Iraqi government. It turned out to be a stunning indictment of a host of nations, their political leaders and business corporations. The IIC report revealed that Iraq sold oil worth $64.2 billion to 248 companies and in turn 3,614 companies sold humanitarian goods worth $34.5 billion to Iraq. To escape obvious scrutiny, the regime entered into these contracts through layers of individuals and companies and quietly tucked away funds through the age-old practice of manipulating the invoices. And, in no time, what started as a trickle turned into huge payments accruing to the Iraqi regime by way of illegal oil surcharges amounting to $229 million and $1.55 billion by way of kickbacks for supply of humanitarian goods destined for the Ir...
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