State Dept on Reported Illegal Iraqi Oil Sales

U.S. DEPARTMENT OF STATE Office of the Spokesman
December 12, 2000
STATEMENT BY CHARLES F. HUNTER, ACTING SPOKESMAN

Iraqi Attempt to Levy Oil Surcharge

The United States is aware of media reports that the Iraqi Government
is attempting to force its oil customers to violate UN Security
Council resolutions by demanding that they secretly pay a premium into
an Iraqi controlled account. The U. S. Government is concerned about
these reports and is looking into them very closely.

UN Security Council resolutions unequivocally require that fees paid
for Iraqi oil be deposited into a UN-controlled escrow account, where
the funds can be used in the Oil-For-Food program to provide for the
humanitarian needs of the Iraqi people. Paying a surcharge of any
amount to Iraq would violate UN Security Council resolutions and
deprive the Iraqi people of oil-for-food funds. The UN Sanctions
Committee - representing every Security Council member - has
unanimously rejected this scheme. Iraq's attempted extortion of the
international community has already cost the people of Iraq hundreds
of millions of dollars in lost oil sales. This money would have gone
into the UN-controlled fund for the benefit of the Iraqi people.

Companies that buy oil on world markets know the close attention that
is focused, in all jurisdictions, on the oil industry and the
importance of keeping activities strictly legal, and we would expect
companies to reject Iraq's latest attempt at intimidation.