Russia suggests easing Iraq's reparations burden

UNITED NATIONS (Reuters) -- Russia has floated a proposal to reduce from 30 percent to 20 percent the proportion of the proceeds from Iraq's "oil-for-food" sales earmarked for reparations stemming from its 1990 invasion of Kuwait, Security Council sources said on Wednesday.

Russian U.N. envoy Sergei Lavrov was also said to have urged, during closed-door council consultations, a review by the council of the operations of the Geneva-based U.N. Compensation Commission, which reviews and pays out claims for reparations.

Under the U.N. "oil-for-food program" that began in December 1996 Baghdad is allowed to sell unlimited quantities of oil to buy food, medicine and other civilian necessities to help offset the effects on ordinary Iraqis of sanctions imposed after its invasion of Kuwait.

Since the start of the programme, 30 percent of the proceeds from the sale of Iraqi oil is automatically siphoned off into the U.N.-administered reparations fund.

Lesser amounts are used to administer the "oil-for-food program" and to meet other costs related to the Gulf war. This includes scrapping Baghdad's weapons of mass destruction, though U.N. arms inspectors have been barred from Iraq for nearly two years.

The council sources said Lavrov raised the reparations issue informally in challenging a $21.5 billion claim by Kuwait for lost oil production and sales during Iraq's invasion and seven-month occupation of the emirate.

If the percentage of Iraqi oil proceeds earmarked for reparations was ever reduced to 20 percent, the difference would presumably become available to buy more food and other civilian supplies for the benefit of Iraqi civilians.

Russian and French representatives in Geneva have held up a decision by the Compensation Commission on the Kuwaiti claim, on which a panel of arbitrators has recommended awarding $15.9 billion.

Kuwait's claim will be considered again when the commission's governing council, which has the same 15-nation membership as the Security Council, next meets in Geneva from Sept 26 to 28.

The council sources said Russia's move for a review of the operations of the Compensation Commission was supported by France, China, Ukraine and Tunisia.

The United States, Britain, Canada and the Netherlands were said to have argued that the Security Council should not pronounce on specific reparations claims, which should be left to the technical body -- the Compensation Commission -- established for that purpose.

Russia's moves on the reparations issue represents another front in a campaign aimed at easing curbs placed on Iraq since its attack on Kuwait.

Russia, together with China and France, has been pressing for the easing of sanctions in force for the past 10 years. It also campaigns vigorously against "no-fly zones" patrolled by United States and British warplanes to prevent the Iraqi army from attacking Kurdish dissidents in northern Iraq and Shiite dissidents in the south.

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