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US continues to block supplies for Iraq

By Evelyn Leopold, April 25, 2001

UNITED NATIONS (Reuters) - Blocked contracts of supplies to Iraq, mainly by the United States, have climbed to $3.5 billion, despite Washington's plans to consider expediting humanitarian goods for ordinary Iraqis.

U.N. figures, released Monday, show an increase in contracts put "on hold" in the Security Council's Iraqi sanctions committee from $2.9 billion at the end of 2000 to the current $3.5 billion.

American officials say the number of contract applications have increased and that the percentage of blocked contracts of the total is similar or less than last year, between 14 percent to 17 percent.

They fear some of the goods ordered by Iraq could be used for military purposes. In other cases, the contracts are blocked because more information is needed from suppliers to determine if they have dual usage, the U.S. officials said.

U.S. Secretary of State Colin Powell is considering lifting restrictions on civilian goods while tightening controls on any military equipment as part of a wide review of the sanctions imposed on Iraq after it invaded Kuwait in August 1990.

But in the meantime, supplies are still being blocked in substantial numbers. Some 1,158 contracts worth more than $3.15 billion were for humanitarian supplies and 545 contracts worth more than $437 million were for oil industry spare parts and equipment, the United Nations said.

Benon Sevan, director of the program, last month criticized the high number of contracts "on hold" saying more non-military items should be put on the expedited list to reach those people who need them.

At the same time he rebuked Iraq for neglecting basic items in the program and not ordering health, education, water and sanitation supplies. Iraq's spending, he said, was "unacceptably" below the level of available funds.

The contracts fall under the oil-for-food humanitarian program. Iraq is allowed to sell oil to purchase humanitarian goods and some equipment to rebuild its infrastructure, an exception to sanctions.

Revenues from oil sales go into a U.N.-controlled escrow account and many but not all contracts have to be approved one-by one by council members.

Since March 2000, a total of 1,731 applications for more than 4.1 billion dollars worth of humanitarian supplies have been approved by "fast-track" procedures which eliminate the need for vetting by the sanctions committee.

Another 175 contracts for $121 million worth of oil industry spare parts and equipment have also been expedited, the U.N. office in charge of the program said.

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