Updated on 12 December 2015
Chapter 8: SUBSIDIARY BODIES
Section 5(i): Iraq-related subsidiary organs
Deferral of deposits by Iraq into the UN Compensation Fund renewed
On 19 December 2014, the President of the Governing Council of the UN Compensation Commission (UNCC) wrote to the Security Council President informing him of a decision by the Governing Council concerning “the level of Iraq’s oil proceeds to be deposited into the Compensation Fund”. Security Council resolution 1956 (2010) requires that Iraq deposit into the UN Compensation Fund five per cent of the proceeds from all export sales of petroleum, petroleum products and natural gas, and five per cent of the value of any related non-monetary payments to service providers, unless the Iraqi Government and the Governing Council decides otherwise.
It had been expected that the outstanding balance of $4.6 billion owed to Kuwait by Iraq in consequence of Iraq’s 1990 invasion would have been paid in full by the end of 2015, had Iraq’s contributions to the Compensation Fund continued as set out in resolution 1956 (2010). However, because Iraq was “facing a very challenging and costly security crisis”, and given the flexibility and support of Kuwait, the Governing Council decided to exercise the authority given it by resolution 1956 (2010) and respond affirmatively to Iraq’s request for a postponement of its deposits. In addition to granting a one-year postponement, the Governing Council also agreed to Iraq’s request that its deposits into the Compensation Fund since 1 October 2014 be returned. At the same time, the Governing Council emphasized the importance of completing payment of the outstanding compensation in a timely manner, and welcomed Iraq’s ongoing commitment in this regard (S/2014/961).
In a letter dated 29 October 2015 (S/2015/863), the President of the UNCC Governing Council informed the Security Council President that Iraq had requested an additional one-year postponement of its deposits into the Compensation Fund required by resolution 1956 (2010). In this connection, the Governing Council had “noted that the extraordinarily difficult security circumstances in Iraq had continued” since the Governing Council’s decision in 2014 to grant a one-year postponement of the deposit requirements. In considering Iraq’s new request, the Governing Council had also “welcomed the support of Kuwait for the request by Iraq”. Ultimately, the Governing Council decided to defer the deposit requirements until 1 January 2017. Nonetheless, the Governing Council emphasized the importance of Iraq fulfilling its obligations and completing the payment of the outstanding compensation to Kuwait in a timely manner. (This update supplements pages 549 to 550 of the book.)