Oil-for-Food: U.S. Companies Have a Finger in the Pie, Too...

I was reading a CRS report on the Oil for Food Program, and came across the following description:

As noted above, the GAO study estimated that Iraq earned over $700 million in 2001 from oil sales surcharges and kickbacks on purchases of goods. The GAO study obtained that estimate by assuming that Iraq obtained a surcharge of 35 cents on each barrel of oil sold under the oil-for-food program. The GAO estimated the �kickback� percentage for Iraq at 5 percent of the value of each purchase contract. In September 2001, the Sanctions Committee moved to curb Iraq�s ability to surcharge on oil sales by adopting a �retroactive pricing� formula. The United Nations said in late September 2002 that Iraq, in part due to the pricing formula, had ended its surcharging practice and that Iraq�s oil sales were rebounding.

Prior to adopting retroactive pricing, the Sanctions Committee had evaluated but not adopted another idea - to limit Iraq�s oil buyers to major international oil firms, rather than smaller oil traders that were willing to pay Iraq the surcharge. A press report in March 2001 (Reuters, March 8, 2001) listed companies that were purchasing Iraqi oil; many are small companies from countries that seek to do business with Iraq or are sympathetic to easing sanctions on Iraq. U.S. major oil companies are said to buy Iraqi oil shipments from these small traders.

Source: fpc.state.gov... (p.14-15).

I eagerly await the findings of the Independent Inquiry Committee.

-koji K.


[edit on 9-8-2004 by koji_K]

[edit on 9-8-2004 by koji_K]