June 2011 Monthly Forecast

Posted 31 May 2011
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Expected Council Action
The activities of the high-level coordinator, who advises the Security Council on the Iraq and Kuwait missing-persons issue, are currently authorised through 30 June. It is expected that the Council will receive a report on the issue and a briefing from the high-level coordinator in June. The Council will likely decide whether to extend the coordinator’s activities before the end of the month.

In addition, the Development Fund for Iraq (DFI) terminates as of 30 June 2011. At time of writing, it was unclear whether the Council would take any action to acknowledge Iraq’s transition to a post-DFI mechanism.

Key Recent Developments
On 8 April the UN Compensation Commission (UNCC) wrote to the Council to report on a session of its governing council held from 5 to 7 April. (The UNCC was created in 1991 to process claims and pay compensation for losses suffered as a direct result of Iraq’s invasion of Kuwait.) At the session, a number of governing council members highlighted the ongoing importance of the compensation fund and the need to retain current or similar arrangements to ensure that payments of 5 percent of oil revenue continue to be deposited into the fund after the expiration of the DFI and the International Advisory and Monitoring Board (IAMB) at the end of June.

On 28 April the UNCC made $880 million available to the Kuwaiti government for distribution to nine successful claimants. The payment brings the overall amount of compensation made available to date by the UNCC globally to $32.2 billion. However, an outstanding balance of approximately $20 billion remains owed to Kuwait.

On 29 April, Iraq submitted to the Council its most recent report regarding arrangements for the transition to a DFI-successor. The report said Iraq had completed arrangements to ensure an effective transition to a post-DFI mechanism. A new account will be opened at the US Federal Reserve Bank and all financial assets currently held in the Development Fund for Iraq will be transferred to it. The account held in Iraq to receive revenues from the export of oil will continue to operate after 30 June and 5 percent of revenues will continue to be transferred to the UN Compensation Fund. (Iraq will continue to use the same mechanism as under the DFI for deduction of the 5 percent compensation percentage in order to ensure transparency.) In addition, proposals have been received from the big four accounting firms to audit successor accounts through 2011. An external auditor will be selected after the IAMB provides its opinion on the matter.

At press time it was unclear whether there had been any developments of note relating to Kuwaiti missing persons and property.

Key Issues
A key issue before the Council is whether an extension of the high-level coordinator’s activities would help resolve the issue of missing Kuwaiti persons and property.

A related issue is whether progress on the missing-persons issue might help in resolving other Iraq/Kuwait issues, such as compensation and the boundary between Iraq and Kuwait. (In extending the high-level coordinator’s mandate in December 2010, the Council expressed willingness to consider the continuation of his activities in the context of their review of the Secretary-General’s 2009 report on the Chapter VII resolutions Iraq is subject to.)

Options for the Council include:

  • extending the activities of the high-level coordinator for an additional six months or longer;
  • allowing the high-level coordinator’s mandate to expire; and
  • adopting a statement acknowledging Iraq’s successful transition to a post-DFI mechanism and reiterating the need to resolve outstanding issues between Iraq and Kuwait before the removal of any further Chapter VII measures imposed during the regime of Saddam Hussein.

Council and Wider Dynamics
With regard to missing persons and property, it seems that most Council members are waiting to hear from the high-level coordinator before taking a position on extending his activities. However, in the past the Council has favoured the continuation of the coordinator’s role in order to support any momentum being built to resolve the issue.

There continues to be a feeling that progress on Iraq/Kuwait issues, including borders and compensation as well as missing persons, is key in order to lift remaining Chapter VII measures and allow Iraq to fully regain its international standing. Most Council members appear keen to continue monitoring progress on these issues throughout the year.

Members appear to be satisfied that Iraq has taken the expected actions necessary to establish a DFI-successor mechanism. It is possible that Council members will agree on a press statement marking the termination of the DFI. However, some point out that since resolution 1956 explicitly laid out the timetable and manner for accomplishing this, an additional statement at this time is unnecessary.

The US is the lead country on Iraq issues in general, and the UK is the lead on Iraq/Kuwait issues.

UN Documents

Selected Security Council Resolutions

  • S/RES/1958 (15 December 2010) terminated the Oil-for-Food programme and established an escrow account to provide indemnification to the UN.
  • S/RES/1957 (15 December 2010) terminated the WMD-related Chapter VII measures and urged Iraq to ratify the Additional Protocol as soon as possible.
  • S/RES/1956 (15 December 2010) extended the DFI and related immunities a final time until 30 June 2011.
  • S/RES/1905 (21 December 2009) extended the arrangements for the DFI and the IAMB until 31 December 2010 and called on Iraq to develop an action plan and timeline for a post-DFI mechanism in 2010.
  • S/RES/1859 (22 December 2008) requested the Secretary-General to report on all Council resolutions concerning Iraq since 1990; a letter from Iraq requesting the lifting of Saddam-era resolutions is included as an annex to the resolution.
  • S/RES/1483 (22 May 2003) established sanctions against the previous Iraqi government, created the DFI, provided immunity to Iraqi petroleum products and envisaged the termination of the Oil-for-Food programme.
  • S/RES/1284 (17 December 1999) appointed a High-Level Coordinator for Iraq/Kuwait missing persons and property.
  • S/RES/692 (20 May 1991) established the UN Compensation Commission and the UN Compensation Fund.

Selected Press Statement

  • SC/10138 (17 December 2010) noted the Council agreed to extend the financing of the mandate of the high-level coordinator for six months.

Selected Letters

  • S/2011/290 (29 April 2011) was Iraq’s most recent report regarding arrangements for the transition to a DFI-successor.
  • S/2011/284 (8 April 2011) was from the UN Compensation Commission to the Council.

Other Relevant Facts

Secretary-General’s High-Level Coordinator for Iraq/Kuwait Missing Persons and Property

Gennady Tarasov (Russia)

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