Iraq received billions of dollars from the U.N. Security Council set aside following the U.S. invasion on Iraq. The supervision of the fund ended on Thursday midnight.
The Council decided last December in a resolution to terminate, on June 30 2011, the UN supervision of depositing into the DFI proceeds from Iraqi oil and natural gas sales, and called on Baghdad to finalize the transition to a post DFI mechanism, which includes auditing arrangements and payment to the victims of the Iraqi invasion of Kuwait in 1990.
DFI was set up instead of the oil-for-food programme that allowed the former Iraqi regime to use some oil revenues for humanitarian purposes.
The Security council noted that the full proceeds from the Development Fund for Iraq has been transferred from the International Advisory and Monitoring Board (IAMB) to the Government of Iraq’s Committee of Financial Experts (COFE), which will exercise authority in accordance to terms approved by Iraq’s Council of Ministers.
The UN said, ?The members of the Security Council welcomed the Government of Iraq’s establishment of a successor arrangement for the transition of the Development Fund for Iraq.?
The Council underscored the importance of Iraq’s continued compliance with relevant resolutions, resolution 1483 of 2003, which required “5 per cent of the proceeds ” to be deposited into the Compensation Fund established in 1991. This requirement shall be binding on a properly constituted, internationally recognized, representative government of Iraq and any successor (government.).
Iraqi Foreign Minister, Hoshyar Zebari, informed the Security Council President in mid-June that his Government has taken the necessary arrangements for the transition of DFI, which includes the five percent of oil sales to be deposited in the Geneva-based Compensation Fund.
Zebari also annexed to his letter, a report containing measures and decisions Baghdad took towards a “full and effective” transition to a post-Development Fund mechanism that will enable Iraq to fulfill its obligations under Council resolutions.
The arrangements for the external auditing, proposals were received from four firms? Ernst Young; PricewaterhouseCoopers; KPMG; and Deloitte, to audit the DFI successor account.
Among other arrangements, the Iraqi Committee of Financial Experts will replace the International Advisory and Monitoring Board (IAMB) starting July 1, 2011.
The passing over of the Development Fund for Iraq is considered as a milestone for Iraqi autonomy. The Security Council also confirmed the transition arrangements to be consistent in respect of transparency, accountability and integrity, with the constitution and with international best practices.
The fund will be handed over to the Iraqi committee of financial experts, who will utilise it as per the terms agreed by the Council of Ministers.
A new account will be opened in the name of the Government of Iraq, to be held by the Central Bank of Iraq at the US Federal Reserve Bank, and all financial assets, including the Iraqi Government assets, of the transfer will be made to the new account.
Regarding the proceeds from export sales of oil and natural gas, UN Secretariat will be consulted to find a transparent mechanism and ensure 5 per cent or any other lesser percentage is deducted and deposited to the UN Compensation Fund.
Despite lifting sanctions, barring a few, there are still more issues to be resolved. These are war compensation to Kuwait, demarcation of the Iraqi-Kuwait border, and efforts to locate missing Kuwaitis and third-party nationals.
Source: CNN, Kuna.net