The UN has transferred US$161 million from the L/C-based and now defunct oil-for-food programme (OFP) to a development programme for Iraq, UN Secretary-General Ban Ki-moon has said.

Ban said the UN will transfer "unencumbered funds" to the Development Fund for Iraq as it continues the process of terminating the OFP, found to be riddled with corruption.

Massive corruption

The programme, which ran from 1996 to 2003, aimed to ease Iraqi suffering under UN sanctions imposed after Saddam Hussein's 1990 invasion of Kuwait, essentially allowing Iraq to sell oil and buy essential food, medicine and other humanitarian goods.

An 18-month investigation led by former US Federal Reserve chairman Paul Volcker, however, found massive corruption in the programme. Its final report in October 2005 accused more than 2,200 companies from some 40 countries of colluding with Saddam's regime to abuse the programme to the tune of US$1.8 billion.

Outstanding L/Cs

Ban says a meeting in Jordan last month between UN and Iraqi officials aimed at reducing the number of outstanding L/Cs from the OFP.

As of the end of 2007, he said there were 210 outstanding L/Cs valued at over US$656 million. He urged Iraqi ministries to resolve outstanding claims before 31 March and said the working group would meet again in that month.

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