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. Last Updated: 07/27/2016

Report: U.S. Plans to Tap $40Bln Iraq Account

More than $40 billion from Iraqi crude sales are sitting in an escrow account controlled by the United Nations, and the United States and Britain want to use it to pay for humanitarian war aid, The Associated Press reported Wednesday.

The news agency said the $40 billion figure came from "previously undisclosed UN figures," and represented money Baghdad was unable to spend under the oil-for-food program, which was introduced to soften the blow of economic sanctions imposed on Iraq after it invaded neighboring Kuwait in 1990.

Citing unnamed diplomats and UN sources, the AP said Russia and the other Security Council members have asked Secretary General Kofi Annan to oversee any use of the money to avoid further conflicts within the council.

The proposal, which apparently envisages a quick overthrow of the Iraqi regime, will reportedly be put forward by Annan shortly after the war begins.

Neither Washington nor London will have direct access to the alleged cash, which would ease their liabilities in rebuilding a post-war Iraq.

It would also mean the end of any deals that Russian, French or other countries have with Baghdad through the oil-for-food program, according to the AP.

A UN spokesman for the program said Iraq has $1.3 billion in nonearmarked funds on an account set up for the northern regions of the country.

He could not say how much there might be in the account on top of that in funds pegged for deals that have not yet been concluded .

A senior UN diplomat involved with the program in New York said late Wednesday that the UN liked to keep details of those earmarked funds "close to its chest."

Another account, for the central and southern regions of the country, has a cumulative shortfall of almost $5.4 billion in approved contracts that could not be covered by revenues due to fluctuations in the oil supply, the UN spokesman said. It also has another $9 billion in funds earmarked for other deals still in the pipeline.

However, the senior diplomat denied that Iraq had $40 billion in any or all of its United Nations' accounts.

"The $40 billion is the amount that has gone through one of Iraq's UN accounts under the oil-for-food program over the last six years,'' he said on condition of anonymity. "That's how much has been used."

The plan being put forward by the United States and Britain would not end the oil-for-food program, but adapt it, he said, adding that the goal was to give humanitarian supplies of foodstuffs and medicines priority over equipment.

The idea is to make use of deals totaling $6 billion that have already been approved, but not yet delivered, he said.

Russia has been a major supplier under the oil-for-food program, making it potentially the biggest loser if the program is wound up.

France is the next biggest supplier, followed by Sudan, the United Arab Emirates, and China, according to the UN.

Russia's Economic Development and Trade Ministry released figures Wednesday showing that Russian oil firms won contracts to sell 124 million barrels of Iraqi oil in 2002, or 40 percent of the country's total crude exports.

Some 15 Russian firms brokered Iraqi crude deals worth a total of $2.8 billion last year, the ministry said.

In addition, some 60 Russian firms exported a total of $1.5 billion worth of goods, services and equipment to Iraq in 2002.

French diplomats told The Associated Press that France and Russia want Iraq's funds to remain under UN control, rather than the U.S. or Britain.

The oil-for-food program was suspended Monday because of the evacuation of UN staff from Iraq.

A new resolution is necessary to continue the flow of humanitarian goods into Iraq because the current agreement was made with the government of Saddam Hussein.