State Dept response to McDermott letter

["Ramsey Kysia" <mbakery@DELETETHISpop.erols.com>]

Nov. 17, 2000

Dear Rep. McDermott:

This is in response to your October 6 letter regarding the 
situation in Iraq.

The UN Security Council imposed sanctions on the Iraqi 
regime following the Persian Gulf War. Sanctions have never 
targeted the civilian population or prohibited the importation 
of food or medicine to Iraq. Sanctions are designed to prevent 
the Iraq regime from reconstituting weapons of mass destruction 
and again threatening its neighbors. Iraq's movement of elite 
forces in recent weeks and its threats against the U.S. allies in 
the Middle East remind us that Iraq remains a threat and 
underscores the importance of containing its military capability. 
UN sanctions on Iraq have been effective in achieving that.

The U.S. has focused on addressing humanitarian needs in Iraq 
since the Gulf War. In the war's aftermath, the U.S. led a coalition 
effort to provide food and disaster aid on a mass scale and instituted 
no-fly zones to prevent future large scale use of force against Iraq's 
people. In 1991, the U.S. proposed the Oil-for-Food program (OFF), 
the largest humanitarian program in UN history, which allows Iraq to 
export oil to use the proceeds to purchase food, medicine and 
humanitarian goods.

Baghdad rejected the program until 1995, and then was slow to put it 
into effect. Since its first aid delivery in 1997, there have been 
well-documented improvement in health and nutrition levels in Iraq. Per 
capita intake is up from 1,300 calories per day before OFF's inception 
to over 2,000. Food imports are now at pre-war levels. Before the 
program began, Iraq imported about $50 million worth of medicines. 
Over the past three years, more than one billion dollars of medicines 
and health supplies have been approved. Over a billion dollars of goods 
for the water, sanitation, electrical and agricultural sectors have been 
approved.

OFF's impact has been greatest in the north, where the UN, not the Iraqi 
government, administers the program. According to a UNICEF study last 
year, infant mortality is lower now than before the war. In south and central 
Iraq, where the Iraqi government distributes OFF goods, infant mortality is 
more than double pre-war levels.

The UN Special Rapporteur for Human Rights in Iraq's August report also 
notes that as a result of recent improvements of OFF, more revenue is 
available to buy humanitarian goods but that the regime fails to fully utilize 
them; Iraq's government directs medicines to hospitals for privileged officials; 
abuses the rationing system to pressure and intimidate citizens; and 
exaggerates infant and maternal mortality rates for propaganda purposes. 
Iraq also manipulates the delivery of UN-approved items into Iraq, a process 
over which it exercises full control. Iraq also has refused visas to UN experts to 
travel to Iraq to analyze the humanitarian situation. For more details about these 
issues, please see the enclosed material.

With regards to contract holds, the Iraq Sanctions Committee, on 
average, approves 87 percent of contracts submitted under the OFF. The 
data on contract holds can be misleading. About 90 percent of U.S. holds 
are either for restricted dual-use goods, or is the result of suppliers' 
providing insufficient information about contracts. Some two-thirds of these 
holds are for items that cannot be exported to Iraq in the absence of UN 
weapons inspectors who could verify that they are being used solely for 
civilian purposes. In the absence of a UN weapons inspections regime in 
Iraq, it is critical to ensure no dual-use items are imported into Iraq.

There is no limit on the amount of oil Iraq may export under the OFF 
program. This, coupled with the recent rise in global oil prices, has boosted 
the level of revenues available to purchase humanitarian goods. It also has 
drastically increased the number of contracts considered by the Sanctions 
Committee. Despite an increase in U.S. and other staff internationally to 
review such contracts, it is not a surprise that the number of and value of 
contracts on hold has increased. As of mid-October, there are 1,216 contracts 
on hold with a total value of $2.2 billion. We have taken new steps this year, like 
instituting two-day contract reviews and pre-approved lists, to help ensure a 
reduction in the number of contract holds that do not contain dual-use items. We 
have also worked hard to urge prospective suppliers to provide full and detailed 
contracts and to remove dual-use items from contracts submitted to the UN, in an 
effort to improve the contract approval process. Between March 1 and October 15, 
the United States removed holds on 903 contracts with a total value of $1.6 billion.

The OFF is a valuable program, which has contributed significantly to the lives 
of the people of Iraq. Like any human undertaking, the program can be improved. 
We are continually working with the UN and Security Council to improve it. It is 
important to note a central point: under OFF, the UN ensures that billions of dollars 
worth of humanitarian supplies flow to the Iraqi people. In the absence of the OFF 
and sanctions, those same revenues would be put into the hands of Saddam 
Hussein.

We hope you find this information useful. Do not hesitate to contact us if we can 
be of further assistance in this or any other matter.

Sincerely,
Barbara Larkin
Assistant Secretary
Legislative Affairs

Supplementary Materials:

We would now like to address some of the other specific items in your letter.

Cash Component
The United States supported creating a cash component of the Oil-for-Food 
program under UN Security Council Resolution 1284, which allows for local 
cash purchases of humanitarian goods. Iraq, however, has refused visas to 
UN experts seeking to develop arrangements for such a program.

Water and Sanitation
In order to speed the processing of certain contracts, including water and 
sanitation items, the UN's Iraq Sanctions Committee, with U.S. support, has 
developed a list of pre-approved items covering water, sanitation, agriculture 
and other sectors. Individual contracts for these items are not examined by 
the Sanctions Committee like other contracts. Rather, the United Nations 
Office examines them for the Iraq Program. This process was specifically 
instituted to help expedite the approval process of non-dual use, 
pre-approved items to improve the humanitarian situation in Iraq.

Line-Item Veto in Contract Review
The U.S. government experts who review the contracts submitted to the 
Security Council under OFF periodically request removal from contracts 
of individual items that raise dual-use concerns. Such line-item veto power 
helps improve the contract approval process. We are not planning to 
implement a line-item veto for contracts, as such, but will continue to review 
contracts with the idea of removing only items that are specifically prohibited 
by UN resolutions or have potential dual-use concerns.

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