Iraq is the OPEC's second largest producer, after Saudi Arabia. And yet, Iraq lives in poverty, unable to rebuild infrastructure to where it was before the US illegal invasion. US controls all of Iraqi oil revenue, and only remits whatever portion it wants to Iraq. How does this happen? The US President signs an executive order every year in violation of international law which gives the "legal" basis (legal only in the USA) for this to happen, and there's a long history behind it which illustrates the illegality and impunity of the USA in dealing with Iraq.
The following is quoted from a post by Hussein Askari on X.
My goal in writing this text is to clarify an important fact, which is that, contrary to what is rumoured by Iraqi politicians and media figures out of ignorance or deliberately to hide the facts from the Iraqi people for unknown purposes, there is no UN Security Council resolution that forces Iraq to put its oil imports into the account of “Development Fund for Iraq” in the US Federal Reserve of New York as has been done since May 2003. This act is also an American and Iraqi violation of Security Council Resolution No. 1956, issued in December 2010, which stipulates the closure of the “Development Fund for Iraq” and the transfer of its deposited to the Central Bank of Iraq. The decision to place funds from Iraq’s oil exports in an account at the Federal Reserve Bank came as a decision by Paul Bremer, the American governor of Iraq after the invasion in 2003, and was backed by a presidential decree signed by US President George W. Bush on May 22, 2003 (Executive Order 13303). This was a purely an American decision that had nothing to do with any UNSC resolutions, nor the issue of the use of Chapter VII, which is used as a scarecrow to frighten the Iraqi people of the consequences of violating the orders and desires of the American occupier.
The issue of Chapter VII
Let us first explain where the issue of placing Iraq under Chapter VII (which means the use of force or the threat of use of force to compel Iraq to implement United Nations resolutions) came from and how Iraq got out of this clause in 2013.
When Saddam's regime invaded and occupied Kuwait on August 2, 1990, the Security Council met on the same day in New York and issued UNSC Resolution No. 660, which demanded that Iraq withdraw its troops from Kuwait, and called on the two parties (i.e., Iraq and Kuwait) to settle their differences peacefully and through dialogue. That is, the resolution did not include Chapter VII: It did not threaten to use force. (https://digitallibrary.un.org/record/94220?ln=en&v=pdf#files)
But, because Iraq did not implement Article Two of Resolution 660, which stipulates the immediate withdrawal of all Iraqi forces from Kuwait, the Security Council followed that up with Resolution No. 661 on August 6, 1990, which demanded that Iraq implement this under Chapter VII. The resolution also called for a complete halt to all exports and imports to and from Iraq and Kuwait (i.e. an economic blockade). Here Iraq came under the penalty of Chapter Seven.
http://unscr.com/en/resolutions/doc/661
Subsequently, the UN Security Council issued about eleven resolutions pertaining to Iraq's occupation of Kuwait until April 1991 (i.e., when the liberation of Kuwait was achieved). The fateful UNSC Resolution 687 was issued on April 8, 1991, which established the economic blockade on Iraq with the exception of some foodstuffs and medicines, and the establishment of United Nations committees to inspect weapons of mass destruction, establishing a border demarcation committee, establishing a compensation fund for Kuwait and third countries’ citizens affected by the Iraqi invasion, forming a committee to search for the fate of Kuwaiti prisoners and missing persons in Iraq as well as citizens of other countries, and establishing a fund to pay Iraq’s previous debts. This decision established the era of economic blockade, humiliation, hunger and poverty in Iraq (500,000 children died) and paved the way for the invasion of Iraq in 2003 under false pretexts that Iraq was not cooperating to disclose its "weapons of mass destruction".
https://un.org/depts/unmovic/documents/687.pdf
Other resolutions were issued to establish the issue of the reparations fund and the export of Iraqi oil on a limited basis to finance the fund, such as Resolution 692.
https://digitallibrary.un.org/record/113598?ln=en&v=pdf
These decisions, which were under Chapter VII mandate, will be cancelled later (as will be stated below) after Iraq fulfils its obligations or proves that it is committed to fulfilling its obligations.
Iraq was released from Chapter VII captivity in 2013 before completing the payment of reparations to Kuwait.
It is worth noting that completing the payment of reparations was no longer linked to Chapter 7 since the issuance of Security Council Resolution No. 2107, which removed Iraq from Chapter 7 on June 27, 2013, that is, nine years before the completion of the payment of reparations to Kuwait.
https://documents.un.org/doc/undoc/gen/n13/376/61/pdf/n1337661.pdf?token=LgSlAEiaB71geFtLTD&fe=true
The reason, as stated in the text of the resolution, is that Iraq has shown full cooperation in settling the issue of finding Kuwaiti prisoners and missing persons from other countries in Iraq or finding and returning their remains, and also because Iraq was committed to completing the payment of full reparations to Kuwait. That is, the compensation has not been paid in full yet when the resolution was issues, but Chapter VII yoke will be removed from Iraq’s back, because it has shown good faith and cooperation in completing this file in the coming years as well.
As Iraq left Chapter VII, all obligations under previous resolutions were cancelled, the most important of which were Nos. 661, 687, and 692, all of which fell under Chapter VII authority.
Resolution 2621 was issued on February 22, 2022 by the Security Council, in which it confirmed that Iraq had completed paying all reparations to Kuwait and the rest of those affected by Iraq’s invasion of Kuwait, and it was decided to close the Reparations Committee and the Compensation Fund.
http://unscr.com/en/resolutions/doc/2621
US control of Iraqi oil imports after the invasion in 2003
After the illegal American-British invasion of Iraq, which violated the United Nations Charter (Article Two, Fourth Paragraph, of the United Nations Charter: protection of the sovereignty, territorial integrity, and independence of nations) became a reality, and after the collapse of Saddam’s regime, the Security Council had to accept the new status quo and deal with the post-invasion phase, because the United States The United States and Britain have become responsible for the situation in Iraq as an occupying force. Therefore, UNSC Resolution 1483 was issued by the UN Security Council on May 22, 2003.
https://digitallibrary.un.org/record/495555?ln=en&v=pdf
The vote on the resolution and its drafting came at the request of the representatives of the United States, Britain, and Northern Ireland, as stated in the text of the resolution.
It has also been stated that the occupying countries are responsible for all aspects of life in Iraq under the “coalition authority” as an occupying authority responsible for managing the affairs of Iraq, the occupied country. This means that it is also authorized to dispose of Iraq's resources.
UNSC Resolution 1483 was also taken under the provisions of Chapter VII.
The resolution addressed various issues, including disarmament, the former regime, the call to help Iraq’s transition to a normal situation, the creation of the Development Fund for Iraq of Iraq (DFI), which required the receipt of all oil revenues therein, assistance to Iraq to solve the debt problem, and deduction of reparations at a certain percentage. From all oil revenues. The resolution also stipulated the cancellation of economic sanctions on Iraq, the end of the “Oil for Food Program” and the transfer of funds allocated to it (about 1-10 billion dollars according to different reports), and the transfer of responsibility over it to the coalition authority.
Paragraphs 12, 13, and 14 of the UNSC Resoultion 1483, that established the “Development Fund for Iraq”, did not mention the US Federal Reserve, nor where the DFI's headquarters or account is to be located. Rather, it confirms that it is “to be held by the Central Bank of Iraq.” However, its resources are disposed of by the ruling coalition authority in consultation with interim Iraqi administration.
Text of Article 12 of Resolution 1483 states: “Notes the establishment of a Development Fund for Iraq to be held by the Central Bank of Iraq and to be audited by independent public accountants approved by the International Advisory and Monitoring Board of the Development Fund for Iraq and looks forward to the early meeting of that International Advisory and Monitoring Board, whose members shall include duly qualified representatives of the Secretary-General, of the Managing Director of the International Monetary Fund, of the Director-General of the Arab Fund for Social and Economic Development, and of the President of the World Bank.”
President Bush seizes the Development Fund for Iraq hours later!
On the same day that UN Security Council Resolution 1483 was voted, i.e., on May 22, 2003, US President George W. Bush signed Executive Order No. 13303, entitled “Protection of the Development Fund for Iraq and Other Property in which Iraq Has an Interest.”
https://govinfo.gov/content/pkg/WCPD-2003-05-26/pdf/WCPD-2003-05-26-Pg646.pdf
Accordingly, the American president became an official custodian of the DFI and all oil export revenues, according to American law, not international law. It is clear that the U.S. Administration was prepared for the issuance of the Security Council resolution that it had called for and contributed to drafting, and it took over the fund only hours after the issuance of the UNSC resolution, meaning that although the fund had not yet been actually established, it had become at the disposal of the American president. All presidents of the United States since George W. Bussh, have subsequently annually renewed this presidential decree in May of each year, the last of which was President Joe Biden signing the renewal on May 16, 2023.
The Coalition Provisional Authority, led by Paul Bremer, which proposed establishing the fund to the United Nations, was the one that decided to place the account number for the DFI in the US Federal Reserve Bank of New York, not the United Nations.
It may be possible to argue legally that since the United States is responsible for Iraq's funds because it is an occupation power, it has the right to dispose of the funds and where it is based. But why did the situation continue as it was after the end of the occupation was announced, even though just formally, and the signing of the “Strategic Cooperation Framework” agreement between Iraq and the United States in 2008, which stipulates that American forces are present in Iraq at the request of the Iraqi government and not an occupation imposed by the United States?
(See paragraph 2 of the preamble of the U.S.-Iraq Strategic Cooperation Framework)
https://uploads.mwp.mprod.getusinfo.com/uploads/sites/103/2023/01/se_sfa.pdf
The UN Security Council abolishes the Development Fund for Iraq in 2010
None of the successive Iraqi governments has demanded moving the account of the Development Fund for Iraq from the Federal Reserve of New York to the Central Bank of Iraq in Baghdad.
But on December 15, 2010, the UN Security Council unanimously (i.e., with the approval of the United States) issued Resolution No. 1956, after the letter sent by Iraqi Prime Minister Nouri al-Maliki to the Security Council “in which he affirmed the Iraqi government’s commitment not to request further extensions” of the arrangements of the Development Fund for Iraq, and that oil revenues will be used fairly. He pointed to the important role of the Development Fund and the International Advisory and Monitoring Council.”
The decision stipulates that the DFI will be cancelled and UN supervision of it will end no later than June 30, 2011.
Article Five of UNSC Resolution 1956 reads:
“Indicates the transfer of all proceeds from the Iraq Development Fund to the account or accounts of successor arrangements established by the Government of Iraq and the closure of the Iraq Development Fund no later than June 30, 2011, and requests that the Council be provided with proof of A written statement as soon as the transfer of proceeds is completed and the fund is closed.”
Issuing this resolution practically means the cancelling Resolution No. 1483 issued in 2003, which established the DFI.
It is worth noting that from that moment on, the United Nations no longer supervised the DFI and could not scrutinize its affairs. Thus the DFI cam under the complete control of the United States, which refused to close it down. Was that the goal of the Iraqi Prime Minister when he asked the Security Council not to
prolong the mission of the International Advisory and Monitoring Board of the Development Fund for Iraq (check recommendation number 5 of the Internationak Advisory).
https://iraq-businessnews.com/wp-content/uploads/2011/07/iamb-june-30-2011-press-release-re-DFI.pdf
RECOMMENDATION 5 REFERS TO THIS AUDIT:
The Final report of the International Advisory and Monitoring Board of the Development Fund of Iraq: IAMB-Final_Report_revised_2011__English_re-DFI.pdf (http://iraq-businessnews.com)
U.S. and Iraq violated UNSC Resolution
Accordingly to all the above, the U.S. Administration and the Iraqi government can be considered to be in violation of United Nations Resolution 1956 issued in 2010, which means that it is possible, on the one hand, to file a complaint against the Iraqi government by Iraqi citizens or members of parliament on this issue, and / or also file a complaint against the United States government for its continued seizure of the DFI and the revenues of Iraq's oil exports, in contravention of United Nations resolutions.
TEHCNICAL NOTE:
The way the revenues of Iraqi oil sales (nearly 4 million barrel per day) are deposited in the DFI bank account at the Federal Reserve Bank of New York is as follows: The buyer (mostly Chinese and other Asian customers) issues a letter of credit from its bank to the Iraqi Oil Marketing Authority (SOMO) which is state-owned. When the oil delivery is made and the money is transferred from the buyer’s account to the Iraqi account of the DFI in the Federal Reserve Bank of New York, SOMO’s job is done. The money then is controlled by the U.S. Treasury, not the Iraqi Central Bank. The way the Iraqi Central Bank gets some of the money to the Iraqi government to cover its needs (96% of the Iraqi state revenues are from oil, and oil represents 97% of all Iraqi income), is that the Iraqi Finance Ministry sends a bill to the U.S. Treasury through the Iraqi Central Bank to recover some of the oil money, specifying in the bill how much and how that money will be dispersed in Iraq. The U.S. Treasury officials check the list in the bill and approve its items. Sometimes they disapprove some of the items for “national security” reasons or if US$ risks ending up in Iran. When the Treasury approves the items, a shipment of US dollar bills is prepared and transferred by airplanes to Baghdad. This happens every month. So, the Iraqi people (40 million) are waiting every month for the delivery of their money from the U.S. to be able to get salaries and buy food and medicine and other necessities.
Anytime the U.S. government does not like the Iraqi government’s behaviour or senses that the Iraqi government is not obedient enough to U.S. goals in the region, cuts are made to these airplane loads of dollar bills. So, Iraq is practically not a sovereign country. Its policies are totally controlled by this mechanism which has been in place since 2003.
It is also for this reason, the Iraqi government have not been able to raise enough funds to rebuild the infrastrcuture, industry, and agriculture of the coubtry in 20 years. Iraq, which is the second largest exporter of raw oil still does not have enough electricity for its people. Iraq, which has two rivers, still imports bottled water from abroad for drinking. Iraqis have to travel abroad for the simplest dental or eye surgery, because the Iraqi healthcare system has not been rebuilt.
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