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U.N. Removes Iraqi Sanctions, Allows Oil Sales for Half Yeart

By Craig Turner
and John Daniszewski
Los Angeles Times

Iraq may sell $2 billion in oil on world markets over the next six months in a long-delayed deal that allows Saddam Hussein's government to use most of the proceeds to relieve malnutrition and disease in Iraq, the United Nations decided Monday.

This will be the first break in the sanctions imposed on the Iraqi government after the 1990 invasion of Kuwait that triggered the Gulf War. But the U.N. has imposed tough conditions intended to ensure the oil money is restricted to humanitarian purposes.

Hundreds of inspectors, monitors, and aid workers have been selected by the U.N. to measure the oil flowing out of Iraq and supervise distribution of the resulting aid inside the country.

About $1.3 billion will be used for food and medicine in Iraq, with most of the remainder designated for compensation to victims of the Kuwait invasion and the war. Another $20 million will help pay for an on-going U.N. inspection program charged with destroying Iraq's weapons of mass destruction.

U.N. Secretary-General Boutros Boutros-Ghali authorized the program in a report to the Security Council. The sale was to begin at 12:01 a.m. EST Tuesday, though it may take another day for initial contracts to be approved by U.N. overseers and the first oil to hit the pipelines. The program is renewable at six month-intervals.

"This is a victory for the poorest of the poor of Iraq, for the women, the children, the sick, and the disabled," Boutros-Ghali said. "I hope that the humanitarian dimension will always prevail at the United Nations."

Francesco Paolo Fulci, Italy's U.N. ambassador and the current Security Council president, called the program the largest relief operation ever mounted by the world body.

It is expected to take up to six weeks for the first of the food to reach Iraqis because of the time needed to buy commodities and transport them to Iraq, U.N. officials in Baghdad say.

Once in place, the program should improve the daily food ration for Iraqis from 1,200 calories a day to 2,000 calories, said Holdbrook Arthur, of the World Food Program in Baghdad. The World Food Program had been running out of wheat and other cereals and had been having difficulty meeting even the meager 1,200-calories-a-day target for the 2.1 million most vulnerable Iraqis.

U.N. officials generally accept Iraqi estimates that the sanctions were causing 4,500 deaths of children a month, saying it is in line with what they have also observed in visits to hospitals and clinics.

Nizar Hamdoon, Iraq's U.N. ambassador, welcomed Monday's decision and repeated long-held Iraqi hopes that the deal is just the first step toward complete removal of U.N. sanctions. "We look forward to developing the relationship between Iraq and the United Nations necessary for the full lifting of sanctions," he said.

But Edward W. Gnehm Jr., the United States' deputy U.N. ambassador, told reporters that while the United States supports the limited sale as a humanitarian gesture, it will continue to oppose removal of other sanctions.

Just last week, Rolf Ekeus, who heads the U.N. team monitoring the Iraq's weapons programs, told the Security Council that Baghdad was refusing to cooperate with efforts to confirm it has destroyed missile engines the government contends it dismantled in 1991. Ekeus was in Baghdad Monday seeking to export the remains of the missile engines to verify that Iraq did not a demolish dummies or duds.

The U.N. mission believes that Iraq may be hiding six to 16 long-range missiles and still has not explained satisfactorily the whereabouts of all the materiel it acquired for biological and chemical weapons.

The flow of oil - most of which will pass through Turkey - will be monitored at a pipeline metering station at Zakho on the Iraq-Turkish border, at the pipeline terminal in Ceyhan, Turkey, and in the southern Iraqi port of Mina al-Bakr. U.N. inspectors in Baghdad and throughout the country will seek to guarantee that proceeds of the sale will be limited to humanitarian aid. The U.N. will distribute much of the aid itself in northern Iraq.

The program had been expected to begin last fall, but was delayed by the United States and Boutros-Ghali in September after Iraqi troops moved into Kurdish-held areas of northern Iraq and the United States launched cruise missiles at Iraqi targets in retaliation.

Oil industry analysts said the amount of crude released in the oil-for-food program is so small that it will have minimal impact on world oil prices.