'Oil for Food’ allows the Iraqi regime to access money for the humanitarian needs of the Iraqi people.
Under the programme, established by Security Council resolution 986 in 1995, Iraq is allowed to sell unlimited quantities of oil and the revenues are deposited in the UN Iraq Account (commonly known as the 'Escrow Account’).
Iraq can use 72 per cent of these funds to buy civilian goods, with 25 per cent going to the UN Compensation Fund and 3 per cent towards the UN administration of the programme.
By the end of July 2002 the UN Secretariat had received about $44 billion worth of contracts to supply goods to Iraq under 'oil for food' and the UN Sanctions Committee had approved almost 24,500 contracts worth $36 billion for export to Iraq.
Iraq can import almost anything other than military equipment (including items related to the production of weapons of mass destruction) under this programme.
Given that Iraq is now importing millions of dollars worth of infrastructure items, including goods to build water treatment plants and power stations, 'oil for food' has become a misnomer. 'Oil for Goods' would be a better description.
In recent reports senior UN officials have commented that the ‘oil for food’ programme continues to make ‘an ocean of difference’ to the Iraqi people, particularly in addressing the major rehabilitation of Iraq’s infrastructure.
Revised UN controls from May 2002 have made exporting humanitarian goods to Iraq even easier.