UN lifts Saddam-era sanctions on Iraq, ending a dark chapter

The Iraq vote at the normally dour UN yesterday was marked by unusual applause, at times feeling like a coming out party for a new nation.

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Iraqi officials said that Wednesday's decision marked "the beginning of the end" of a severe sanctions regime imposed under Chapter VII of the UN Charter.

"I'm personally very, very delighted," Iraqi Foreign Minister Hoshyar Zebari said afterward. "We are overwhelmed by this support, and I think this shows Iraq is coming back, truly, to its rightful place among the community of nations."

Obligations to Kuwait remain, however

Even with a new government coming in, Iraqi officials acknowledge that they're a long way from concluding their obligations to Kuwait, the tiny, oil-rich neighbor that Saddam briefly occupied before being ousted by US-led forces in the 1991 Gulf War.

Under the sanctions, 5 percent of Iraq's oil and gas revenue is set aside into a fund to compensate Kuwait for damages, including some $130 billion in lost oil production, of which about $25 billion remains to be paid.

Iraqi officials had asked the Security Council to extend UN protection for an additional year to an escrow account in New York that holds national oil and gas revenue and shields it from creditors. In a compromise, the council voted Wednesday to extend that immunity for six months, after which Iraq will regain control of its oil revenue but could be exposed to additional claims.

Oil-for-food program closed

The council also officially closed the book on the infamously corrupt $60 billion oil-for-food program, in which more than 2,000 companies conspired with Saddam's regime to steal $1.8 billion, according to an investigation by former Federal Reserve Chairman Paul Volcker. About $700 million remains in the fund, most of which would be transferred into Iraq's escrow account in New York.

Some sanctions remain in effect until Iraq and Kuwait resolve other issues, including locating some 760 Iraqis and 350 Kuwaitis missing since the war and agreeing on disputed border areas and maritime access.

Resolving Kuwait's claims will be "on top of the agenda of the new government," Zebari said. Asked when that government would be announced, he said, "Very, very soon. It wouldn't be weeks. It would be days."

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