Iraq: Oil-For-Food Program, Illicit Trade, and Investigations

Publication Date: January 2007

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: International relations

Type:

Coverage: Iraq

Abstract:

The "oil-for-food" program (OFFP) was the centerpiece of a long-standing U.N. Security Council effort to alleviate human suffering in Iraq while maintaining key elements of the 1991 Gulf war-related sanctions regime. In order to ensure that Iraq remained contained and that only humanitarian needs were served by the program, the program imposed controls on Iraqi oil exports and humanitarian imports. All Iraqi oil revenues legally earned under the program were held in a U.N.-controlled escrow account and were not accessible to the regime of Saddam Hussein.

The program was in operation from December 1996 until March 2003. Observers generally agree that the program substantially eased, but did not eliminate, human suffering in Iraq. Concerns about the program's early difficulties prompted criticism of the United States; critics asserted that the U.S. strategy was to maintain sanctions on Iraq indefinitely as a means of weakening Saddam Hussein's grip on power. At the same time, growing regional and international sympathy for the Iraqi people resulted in a pronounced relaxation of regional enforcement -- or even open defiance -- of the Iraq sanctions. The United States and other members of the United Nations Security Council were aware of billions of dollars in oil sales by Iraq to its neighbors in violation of the U.N. sanctions regime and outside of the OFFP, but did not take action to punish states engaged in illicit oil trading with Saddam Hussein's regime. Successive Administrations issued annual waivers to Congress exempting Turkey and Jordan from unilateral U.S. sanctions for their violations of the U.N. oil embargo on Iraq. Until 2002, the United States argued that continued U.N. sanctions were critical to preventing Iraq from acquiring equipment that could be used to reconstitute banned weapons of mass destruction (WMD) programs. In 2002, the Bush Administration asserted that sanctions were eroding, and the Administration decided that the overthrow of that regime had become necessary.

The program terminated following the fall of Saddam Hussein's regime, the assumption of sovereignty by an interim Iraqi government on June 28, 2004, and the lifting of Saddam-era U.N. sanctions. However, after the fall of the regime, there were new allegations of mismanagement and abuse of the program, including allegations that Saddam Hussein's regime manipulated the program to influence U.N. officials, contractors, and politicians and businessmen in numerous countries. New attention also has been focused on Iraq's oil sales to neighboring countries outside the control or monitoring of the U.N. OFFP. Several investigations revealed evidence of corruption and mismanagement on the part of some U.N. officials and contractors involved with the OFFP, and called into question the lack of action on the part of U.N. Sanctions Committee members, including the United States, to halt Iraq's profitable oil sales outside of the program over a ten year period.

This product will be updated as warranted by major developments. See also CRS Report RL31339, Iraq: Post-Saddam Governance and Security.