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escrow account

At the CASI conference this weekend there was some brief engagement with the relative merits of the escrow account. It was recognised I think this was something the UNSC was very likely to retain in the short term at least. It was recognised that we needed to engage with pretty quickly with the retention of the account and it's likely effects on the situation re the economy etc. 

It seeems to me that the email below re the cash component raises some of the problems which retention of the escrow account would continue to perpetuate.

Importantly the excrow account maintains the emphasis on importing finished goods and greatly reduces the ability of the 22 million people of Iraq to manufacture, grow and process the thing's they need. 


  gaz <> wrote:


My understanding of the cash component runs like this:
Iraq will be paid cash "from its money" for services rendered under "Oil for
food program". Lets take few examples of this:
1- The government of Iraq distribute 200000 tones on wheat a month under the
MOU. This is ALL imported wheat. CAN the natively produced wheat be paid for
from the MOU. If yes how, Under what conditions? Who actually receives the
wheat and pays the farmers (thousands of them each one contributing few
hundred tons) is it the government or is it another UN bureaucracy. I can
envision endless obstacles if the UN take up the assignment. But the UN on
the other hand does not want the government to handle the money.
2- Medical drugs is another example. We can manufacture the drug (normal
drugs with no hint of dual use materials) a lot cheaper than importing them
BUT we have to import raw materials. We expect that the manufacturing cost
to be paid for from our money which is in the hands of the UN. The UN
defiantly would not accept because this will enhance the Iraqi drug industry
(not on their agenda). It will create a problem for the UN because they will
have to have an army of monitors to verify that all materials have been
manufactured and delivered to health stores...etc. Then there is the
financial side.
In the UN philosophy importing finished good can be easily monitored. Raw
materials to be manufactured over a period of time is really a night mare to
the UN.
3- Soap and detergents are another. We had factories for the last fifty
years. They need raw material to start functioning again. The UN will not
agree to supply these factories with the raw materials because it will
enhance Iraqi industry so we import soap and detergents.
I can continue listing item like powdered milk, vegetable gee.. Can they be
imported in BULK and be packed by the governmentor or the private sector for
distribution?. Knowing the 661 committee
and the UK USA stand I think they defiantly will not agree.

Putting the blame on the Iraqi government is the easiest way to cover-up
their "not so smart" sanctions

Ghazwan Al-Mukhtar
Baghdad, Iraq
----- Original Message -----
From: "Colin Rowat"
To: "CASI list"
Sent: Wednesday, February 28, 2001 7:36 PM
Subject: RE: Cash component

> Thanks Eric,
> Your recollection seems sound to me. There is some form of cash component
> in the north (although I do not know exactly how it works). The issue in
> the south/centre is not, to my knowledge, as simplistic as Crossette
> presents it.
> To my knowledge, discussions about the cash component began after SCR
> passage in December 1999 (therefore not yet "for years"). The sticking
> point was obvious from the outset: who handles the money? This was
> on in CASI's May 2000 newsletter. The Iraqi government wanted to handle
> money itself, regarding UN agencies of being corrupt, unaccountable and
> expensive. On the other hand, the US had opposed this.
> I've never heard Crossette's argument about putting "even a small amount
> economic power into the hands of citizens". If citizens got any, the
> government would be deciding which ones did. This observation,
> incidentally, also complicates the UN agencies - Iraqi government divide:
> the UN agencies in Iraq have Iraqi staff.
> Colin Rowat
> Iraq Sanctions Project Coordinator
> Center for Economic and Social Rights
> 162 Montague Street
> Brooklyn, NY 11201
> Tel: (718) 237-9145 x 19
> Fax: (718) 237-9147
> Mob: (917) 517-5840
> E-mail:
> Mob. mail:
> URL:
> > -----Original Message-----
> > From:
> > []On Behalf Of Eric
> > Herring
> > Sent: Wednesday, February 28, 2001 5:34 AM
> > To: CASI list
> > Subject: Cash component
> >
> >
> > According to the Barbara Crossette article 'IRAQI MINISTER
> >
> > 'Some ideas already floated here have been rejected by the
> > Iraqi government of Saddam Hussein. For example, for years
> > the United Nations has been urging Iraq to accept cash from
> > supervised oil sales - now nearing a total of $40 billion
> > since 1996 - to inject seed money into the local economy.
> > The Iraqis have refused to do this, officials say,because
> > it would put even a small amount of economic power into
> > thehands of citizens.'
> >
> > This is not something I have been following closely, but it
> > does not fit with my recollection (although it is
> > plausible). My recollection is that there is a cash
> > component in the north but not the centre and south because
> > the US and Britain don't want cash getting into the hands
> > of the regime this way.
> >
> > Any comments?
> >
> > Eric
> >
> > ----------------------
> > Dr. Eric Herring
> > Department of Politics
> > University of Bristol
> > 10 Priory Road
> > Bristol BS8 1TU
> > England, UK
> > Tel. +44-(0)117-928-8582
> > Fax +44-(0)117-973-2133
> >
> >
> >
> > --
> > -----------------------------------------------------------------------
> > This is a discussion list run by the Campaign Against Sanctions on Iraq
> > For removal from list, email
> > Full details of CASI's various lists can be found on the CASI website:
> >
> >
> --
> -----------------------------------------------------------------------
> This is a discussion list run by the Campaign Against Sanctions on Iraq
> For removal from list, email
> Full details of CASI's various lists can be found on the CASI website:

This is a discussion list run by the Campaign Against Sanctions on Iraq
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