The UN has transferred US$2.6 billion in surplus funds from its now-defunct oil-for-food programme to the Development Fund for Iraq (DFI) in what appears to be the last but one chapter in the scheme's seven-year history.

The latest transfer is the fourth since the UN decided to wind down the letter of credit (L/C) based scheme in May 2003 when the Security Council adopted resolution 1483.

Close the books

A first transfer of US$1 billion was made two days after the resolution passed. As oil-for-food contracts were reviewed and prioritised, a second US$1 billion was transferred in October and a third in November. The fourth transfer came after outstanding contracts were completed and L/Cs issued.

Once all UN agencies and programmes that participated in the oil-for-food programme have reported their 2003 expenditures, the UN will officially close its books on the scheme for 2003 and present its financial statement to the UN's auditors.

At that time a further transfer of funds will be made to the DFI, which is under the direction of the Coalition Provisional Authority.

History

The oil-for-food programme was established in 1996 with the aim of mitigating the effects of international sanctions imposed on Iraq after its 1990 invasion of Kuwait, by using UN-controlled sales of Iraqi oil to buy food and medicine for the civilian population. In its seven-year history, according to UN figures, the programme has generated oil revenues totalling US$65 billion of which US$46 billion has been allocated to the food programme. The remainder has gone to compensate victims of the invasion of Kuwait and finance the costs of administration and arms inspections.

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