DATE=03/08/01

TYPE=CORRESPONDENT REPORT

TITLE=U-N/IRAQ OIL (L Only)

NUMBER=2-273443

BYLINE=BRECK ARDERY

DATELINE=UNITED NATIONS

CONTENT=

VOICED AT:

INTRO: The head of the United Nations Iraq program, Benon Sevan, is urging both Iraq and its adversaries to "de-politicize" the oil-for-food plan. V-O-A Correspondent Breck Ardery reports from the United Nations.

TEXT: After briefing the U-N Security Council, in a closed session, Mr. Sevan told reporters the U-N-administered oil-for-food project faces a significant drop in revenue due to a reduction in Iraqi oil exports, under the program. The program allows Iraq to legally sell oil to raise money for food, medicine and other humanitarian supplies. But Mr. Sevan says the relief program has become a political issue.

/// SEVAN ACT ///

We have requested, and impressed on the Security Council that we should try to de-politicize this, and I mean all parties involved, whether the Council members or others, including the government of Iraq. We should try to concentrate on the humanitarian issues and, as long as sanctions are in place, there is no alternative to this program.

/// END ACT ///

Mr. Sevan says he cannot confirm or deny that Iraq is imposing unauthorized surcharges on its oil exports.

But American representative James Cunningham says there have been credible reports that Iraq has solicited surcharges, resulting in a drop in oil exports.

/// CUNNINGHAM ACT ///

That is one of the things that is impacting oil sales, we are confident, is the Iraqi attempt to impose these surcharges, thereby interfering with the market mechanism. That makes companies reluctant to buy oil because of the price impact that has.

/// END ACT ///

Mr. Cunningham would not comment on the current review by the Bush administration of plans to modify U-S policy toward Iraq. Secretary of State Colin Powell says the United States wants to ease many of the sanctions against Iraq, allowing it to import more civilian goods but tighten the restrictions against the import of military equipment. (Signed)

NEB/UN/BA/FC/TDW