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Iraq to pay $400 million for Saddam's mistreatment of Americans

The controversial settlement opens the door for the US to pressure the United Nations to end sanctions imposed during Saddam Hussein's rule, which were never fully lifted.

By Jane ArrafCorrespondent / September 9, 2010


Iraq has quietly agreed to pay $400 million in claims to American citizens who say they were tortured or traumatized by Saddam Hussein’s regime after his 1990 invasion of Kuwait.

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The controversial settlement ends years of legal battles and could help Iraq emerge from United Nations sanctions put in place two decades ago – a step Iraqi leaders see as a prerequisite to becoming fully sovereign.

The Iraqi foreign ministry said the $400 million settlement, signed last week with James Jeffrey, the new US ambassador to Iraq, resolves legal claims inherited from the former regime and was in line with negotiations to end the sanctions.

Settling the claims, which were brought by American citizens, has been seen as a key requirement for Washington to be willing to push for an end to the UN sanctions.

“There was a lot of pressure on the Iraqi government to do something that gets Congress off their back,” says one senior Iraqi official, adding that the settlement cleared the way for US efforts to bring Iraq out from under the UN sanctions.

Known as "Chapter 7" sanctions after the part of the UN charter that deals with international threats to peace, they were imposed against Iraq after Saddam Hussein’s 1990 invasion of Kuwait and never fully lifted.

As part of the Status of Forces Agreement between Iraq and the United States, which provides the legal basis for the presence of American troops here, the US committed itself to helping Iraq emerge from Chapter 7.

Claims for kidnapped children, CBS reporter, and others

Law firms representing the American families pressed Congress for years to approve a measure that would allow foreign governments accused of sponsoring terrorism to be sued in the United States. They finally won an amendment lifting immunity for states accused of sponsoring terrorism.

Senior Iraqi officials who asked to remain anonymous because of the sensitivity of the issue said Iraq and legal firms representing the American families had agreed to a $400 million payout to settle up to eight groups of claims.

The claims include compensation for emotional distress from the children of two contractors seized near the Iraq-Kuwait border in 1990, Americans held as human shields in an effort to prevent a US attack, and the case of CBS News reporter Bob Simon and his cameraman who were held after being arrested along the border with Kuwait.

US courts had previously awarded at least two multimillion-dollar settlements, later appealed. The Bush administration at the time had argued that the money, held in US trust, was needed to help rebuild Iraq. Lawyers have previously said they expected individual claims to average between $400,000 and $500,000 under the final settlement.