Iraqi oil proceeds to be used to pay for humanitarian relief during war

The United States and Britain are drafting a plan to use Iraqi oil proceeds in a $ 40 bn UN-controlled account to pay for humanitarian relief during a war. The plan would ease Washington and London's financial responsibilities for caring for the millions of Iraqis likely to be affected by the fighting.
The money would be drawn from an account that was set up under the United Nations' 1996 oil-for-food program. Under that program, Iraqi oil proceeds are put into a UN escrow account and can be used by Iraq to buy food and medicine.

The new plan, which is based on the assumption Saddam Hussein will be quickly overthrown, will probably be presented for approval shortly after war begins, according to senior diplomats and UN officials.
In an effort to win swift Security Council approval, the plan would be submitted by Secretary-General Kofi Annan, rather than by Washington and London, whose forces would effectively be occupying Iraq by that time, diplomats said. Washington and London would notget direct access to the vast Iraqi cash reserves in the UN escrow account. Instead, control would temporarily be turned over to Annan, who would prioritise Iraq's humanitarian needs and buy the needed supplies.
London and Washington are still working out many of the details. Diplomats said the duration of the set-up will depend on how long it takes the military to stabilize Iraq.

The UN oil-for-food program feeds 60 % of Iraq's 22 mm people. It was designed to alleviate burdens created by the economic sanctions imposed on Iraq after its 1990 invasion of Kuwait. The humanitarian supplies are distributed by UN and Iraqi government workers, while the United Nations oversees Iraqi oil production and sales.
Over the years, the UN account, the oil-for-food program and an elaborate monitoring mechanism designed to prevent Iraqis from using the money to buy weapons have all been the subject of bitter debate in the Security Council. France and Russia, with the highest number of Iraqi business deals, have accused Washington of blocking the sales of some items that could have military applications. The United States has argued that tighter restrictions were needed to prevent Iraq from re-arming.

During the past several weeks, Russia and France were both accused of trying to prevent a war to protect their extensive business interests in Iraq. The Bush administration, with its close ties to the US oil industry, has had to face suggestions that it is mostly interested in Iraq for its oil.
Some said that perception helped convince Washington that it should give the United Nations a role to play in Iraq, even if the Security Council refused to support war. "The United States needs the UN most here because of the serious image problems it risks if this administration was seen controlling the Iraqi oil," said Lee Feinstein, a senior fellow with the New York-based Council on Foreign Relations.