Memorandum of Understanding between the Secretariat of the United Nations and the Government of Iraq on the Implementation of UN Security Council Resolution 986

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Country/entity: Iraq
United Nations
Region: Middle East and North Africa
Cross-regional
Agreement name: Memorandum of Understanding between the Secretariat of the United Nations and the Government of Iraq on the Implementation of UN Security Council Resolution 986
Date: 20 May 1996
Agreement status: Multiparty signed/agreed
Interim arrangement: Yes
Agreement/conflict level: Interstate/interstate conflict
Iraq Wars and the Iraqi Insurgency (1989-1990) (2004 - )
In the aftermath of the Iraq-UN conflict following President Saddam Hussein’s invasion of Kuwait in 1989, the UN enforced no-fly zones and set up a monitoring commission of the arms capacity of the Iraqi government. By the late 1990s, Iraqi officials had increased their resistance against the implementation of these programmes. In the aftermath of the 2001 terrorist attacks on New York, the U.S. accused the Iraqi government of having weapons of mass destruction. In 2003, a U.S.-led coalition overthrew the government of Saddam Hussein, but failed to maintain security in the country as ex-Bathist and Islamist groups launched a counter-campaign. Violence reached a peak in 2006 as the conflict took on sectarian traits leading to mass human rights violations by domestic Sunni and Shi’a groups, as well as occupying forces. Despite the failure to stabilize the country, the U.S.-led forces withdrew in December 2011. Since then Iraq has effectively been split into three territories based on ethno-religious identity including the Shi’a in the south, the Kurds in the north, and a Sunni band in the middle, which is currently occupied by the organisation known as the Islamic State (formerly of Iraq and the Levant).
Stage: Implementation/renegotiation
Conflict nature: Territory
Peace process: Iraq peace process - first Iraq war
Parties: Hans CORELL, Under Secretary-General, The Legal Counsel, United Nations; Abdul Amir AL-ANBARI, Ambassador Plenipotentiary, Head of the Delegation of Iraq
Third parties: -
Description: Agreement outlines the modalities of the oil-for-food programme to implement UNSC resolution 986. It calls for the establishment of an Iraq account, and the export of oil, with oversight in return for food, medicine, water, etc. to be distributed to the Iraqi population. It also calls for strict oversight of import of such goods with the deployment of UN Inspectors.

Agreement document: IQ_UN_960520_MoU between the UN and Iraq on the Implementation of UNSC Resolution 986.pdf (opens in new tab) | Download PDF

Groups

Children/youth: No specific mention.
Disabled persons: No specific mention.
Elderly/age: No specific mention.
Migrant workers: No specific mention.
Racial/ethnic/national group: No specific mention.
Religious groups: No specific mention.
Indigenous people: No specific mention.
Other groups: No specific mention.
Refugees/displaced persons: No specific mention.
Social class: No specific mention.

Gender

Women, girls and gender: No specific mention.
Men and boys: No specific mention.
LGBTI: No specific mention.
Family: No specific mention.

State definition

Nature of state (general): Page 1, Section I, General provisions,
3. Nothing in the present Memorandum should be construed as infringing upon the sovereignty or territorial integrity of Iraq.

Page 1, Section II, Distribution Plan,
6. ... The present distribution system of such supplies, the prevailing needs and humanitarian conditions in the various Governorates of Iraq shall be taken into consideration with due regard to the sovereignty of Iraq and the national unity of its population...

Page 10-13, Annex 1 [summary] outlines modalities of distribution to the three northernmost provinces (now constituting the Kurdish Autonomous region). Which is conducted by UN agencies rather than the Iraqi government.
State configuration: No specific mention.
Self determination: No specific mention.
Referendum: No specific mention.
State symbols: No specific mention.
Independence/secession: No specific mention.
Accession/unification: No specific mention.
Border delimitation: No specific mention.
Cross-border provision: No specific mention.

Governance

Political institutions (new or reformed): No specific mention.
Elections: No specific mention.
Electoral commission: No specific mention.
Political parties reform: No specific mention.
Civil society: No specific mention.
Traditional/religious leaders: No specific mention.
Public administration: No specific mention.
Constitution: No specific mention.

Power sharing

Political power sharing: No specific mention.
Territorial power sharing: No specific mention.
Economic power sharing: No specific mention.
Military power sharing: No specific mention.

Human rights and equality

Human rights/RoL general: No specific mention.
Bill of rights/similar: No specific mention.
Treaty incorporation: No specific mention.
Civil and political rights: No specific mention.
Socio-economic rights: entire agmt dedicated to establishing procedures and mechanisms for oil-for-food programme

Rights related issues

Citizenship: No specific mention.
Democracy: No specific mention.
Detention procedures: No specific mention.
Media and communication: No specific mention.
Mobility/access: No specific mention.
Protection measures: No specific mention.
Other: No specific mention.

Rights institutions

NHRI: No specific mention.
Regional or international human rights institutions: No specific mention.

Justice sector reform

Criminal justice and emergency law: No specific mention.
State of emergency provisions: No specific mention.
Judiciary and courts: No specific mention.
Prisons and detention: No specific mention.
Traditional Laws: No specific mention.

Socio-economic reconstruction

Development or socio-economic reconstruction: Socio-economic reconstruction→Development or socio-economic reconstruction→Socio-economic development
Page 1, Section II, Distribution Plan,
5. The Government of Iraq undertakes to effectively guarantee equitable distribution to the Iraqi population throughout the country of medicine, health supplies, foodstuffs and materials and supplies for essential civilian needs (hereinafter humanitarian supplies) purchased with the proceeds of the sale of Iraqi petroleum and petroleum products.

[Summary] Other relevant articles on the facilitation of purchases coded in 'Business'.

Page 5, Section V, Procurement and confirmation procedures,
25. The arrival of goods in Iraq purchased under the plan will be confirmed by independent inspection agents to be appointed by the Secretary-General. No payments can be made until the independent inspection agents provide the Secretary-General with authenticated confirmation that the exported goods concerned have arrived in Iraq.

Page 5, Section VI, Distribution of humanitarian supplies purchased under the Distribution Plan
32. The distribution of humanitarian supplies shall be undertaken by the Government of Iraq in accordance with the Distribution Plan referred to in Section II of the present Memorandum. The Government of Iraq will keep the United Nations observation personnel informed about the implementation of the plan and the activities that the Government is undertaking.

Page 5, Section VII, Observation of the equitable distribution of humanitarian supplies and determination of their adequacy, GENERAL PROVISIONS,
34. The United Nations observation process will be conducted by United Nations personnel in Iraq under the overall authority of the Department of Humanitarian Affairs at United Nations Headquarters in New York in accordance with the provisions described below. Such observation shall apply to the distribution of humanitarian supplies financed in accordance with the procedures set out in the Resolution.

Page 6, Section VII, Observation of the equitable distribution of humanitarian supplies and determination of their adequacy, GENERAL PROVISIONS,
35. The objectives of the United Nations observation process shall be:
(a) to confirm whether the equitable distribution of humanitarian supplies to the Iraqi population throughout the country has been ensured;
(b) to ensure the effectiveness of the operation and determine the adequacy of the available resources to meet Iraq’s humanitarian needs.
Socio-economic reconstruction→Development or socio-economic reconstruction→Humanitarian assistance
Page 1, Section II, Distribution Plan,
6. To this end, the Government of Iraq shall prepare a Distribution Plan describing in detail the procedures to be followed by the competent Iraqi authorities with a view to ensuring such distribution. The present distribution system of such supplies, the prevailing needs and humanitarian conditions in the various Governorates of Iraq shall be taken into consideration with due regard to the sovereignty of Iraq and the national unity of its population. The plan shall include a categorized list of the supplies and goods that Iraq intends to purchase and import for this purpose on a six-month basis.
National economic plan: No specific mention.
Natural resources: [summary] Agreement lays out an oil for food programme and necessitates the selling of Iraqi oil. See Section IV in particular. Other clauses coded where applicable.
International funds: No specific mention.
Business: Page 2, Section III, Establishment of the escrow account and audit of that account,
... 15. Nothing in this Memorandum shall be interpreted to create a liability on the part of the United Nations for any purchase made by the Government of Iraq or any agents acting on its behalf pursuant to the provisions of the Resolution.

Page 3, Section IV, [Summary] establishes the parametres for transport and trade of Iraqi oil as part of the programme.

Page 4, Section V, Procurement and confirmation procedures,
19. The purchase of medicine, health supplies, foodstuffs, and materials and supplies for essential civilian needs of the Iraqi population throughout the country, as referred to in paragraph 20 of resolution 687 (1991), will, subject to paragraph 20 below, be carried out by the Government of Iraq, will follow normal commercial practice and be on the basis of the relevant resolutions of the Security Council and procedures of the 661 Committee.

Page 4, Section V, Procurement and confirmation procedures,
21. The Government of Iraq will, except as provided for in paragraph 20, contract directly with suppliers to arrange the purchase of supplies, and will conclude the appropriate contractual arrangements.
22. Each export of goods to Iraq shall be at the request of the Government of Iraq pursuant to paragraph 8 (a) of the Resolution. Accordingly, exporting States will submit all relevant documentation, including contracts, for all goods to be exported under the Resolution to the 661 Committee for appropriate action according to its procedures. It is understood that payment of the supplier from the "Iraq Account" can take place only for items purchased by Iraq that are included in the categorized list referred to in Section II of the present Memorandum. Should exceptional circumstances arise, applications for the export of additional items may be submitted to the 661 Committee for its consideration.
Taxation: No specific mention.
Banks: Socio-economic reconstruction→Banks→Central bank
Page 2, Section III, Establishment of the escrow account and audit of that account,
12. The Secretary-General, after consultations with the Government of Iraq, will select a major international bank and establish there the escrow account described in paragraph 7 of the Resolution, to be known as "the United Nations Iraq Account" (hereinafter the "Iraq Account"). The Secretary-General will negotiate the terms of this account with the bank and will keep the Government of Iraq fully informed of his actions in choosing the bank and opening the account. All transactions and deductions mandated by the Security Council under paragraph 8 of the Resolution shall be made from the "Iraq Account", which will be administered in accordance with the relevant Financial Regulations and Rules of the United Nations.
13. The Iraqi authorities might designate a senior banking official to liaise with the Secretariat of the United Nations on all banking matters relating to the "Iraq Account".
14. In accordance with the United Nations Financial Regulations, the "Iraq Account" will be audited by the Board of Auditors who are external independent public auditors. As provided for in the Regulations, the Board of Auditors will issue periodic reports on the audit of the financial statements relating to the account. Such reports will be submitted by the Board to the Secretary-General who will forward them to the 661 Committee and to the Government of Iraq.

Page 5, Section V, Procurement and confirmation procedures,
24. After the 661 Committee has taken action on the applications for export in accordance with its procedures, the Central Bank of Iraq will request the bank holding the "Iraq Account" to open irrevocable letters of credit in favour of the beneficiaries. Such requests shall be referred by the bank holding the "Iraq Account" to the United Nations Secretariat for approval of the opening of the letter of credit by the latter bank, allowing payment from the "Iraq Account" upon presentation of credit-conform documents. The letter of credit will require as condition of payment, inter alia, the submission to the bank holding the "Iraq Account" of the documents to be determined by the procedures established by the 661 Committee, including the confirmations by the agents referred to in paragraph 25 below. The United Nations, after consultations with the Government of Iraq, shall determine the clause to be inserted in all purchase orders, contracts and letters of credit regarding payment terms from the "Iraq Account". All charges incurred in Iraq are to be borne by the applicant, whereas all charges outside Iraq are for the account of the beneficiary.
Socio-economic reconstruction→Banks→Cross-border financial flows
[Summary] See Section III and IV

Page 5, Section V, Procurement and confirmation procedures,
30. If the 661 Committee has approved a request in accordance with paragraph 29, the provisions of paragraph 24 shall apply. However, since the supplier can expect payment against future oil sales, as stated in paragraph 10 of the Resolution, the proceeds of which are to be deposited in the "Iraq Account", the bank holding the "Iraq Account" will issue an irrevocable letter of credit stipulating that payment can only be effected when at the time of drawing the "Iraq Account" has sufficient disposable funds and the United Nations Secretariat approves the payment.

Land, property and environment

Land reform/rights: No specific mention.
Pastoralist/nomadism rights: No specific mention.
Cultural heritage: No specific mention.
Environment: No specific mention.
Water or riparian rights or access: Page 6, Section VII, Observation of the equitable distribution of humanitarian supplies and determination of their adequacy, OBSERVATION PROCEDURES
Water/sanitation supplies and equipment
40. Observation of distribution of water/sanitation supplies and equipment will focus on the determination that they are used for their intended purposes. Confirmation will be carried out by collecting data on the incidence of waterborne diseases and by water quality control checks by visits to water and sanitation facilities by representatives of relevant United Nations agencies. In this regard the United Nations will rely on all relevant indicators.

Security sector

Security Guarantees: No specific mention.
Ceasefire: No specific mention.
Police: No specific mention.
Armed forces: No specific mention.
DDR: No specific mention.
Intelligence services: No specific mention.
Parastatal/rebel and opposition group forces: No specific mention.
Withdrawal of foreign forces: No specific mention.
Corruption: Page 5, Section V, Procurement and confirmation procedures,
25-28. [summary] Corruption and possible nefarious activities are deterred through the stationing of UN inspectors in crossing points to inspect the good upon arrival.
Crime/organised crime: No specific mention.
Drugs: No specific mention.
Terrorism: No specific mention.

Transitional justice

Transitional justice general: No specific mention.
Amnesty/pardon: No specific mention.
Courts: No specific mention.
Mechanism: No specific mention.
Prisoner release: No specific mention.
Vetting: No specific mention.
Victims: No specific mention.
Missing persons: No specific mention.
Reparations: No specific mention.
Reconciliation: No specific mention.

Implementation

UN signatory: [Summary] The UN was a direct party to the Agreement.
Other international signatory: No specific mention.
Referendum for agreement: No specific mention.
International mission/force/similar: [Summary] Agreement calls for the stationing of UN Inspectors. See 'Organised Crime/Corruption'.

Page 5, Section VI, Distribution of humanitarian supplies purchased under the Distribution Plan
33. The distribution of humanitarian supplies in the three northern Governorates of Arbil, Dihouk and Suleimaniyeh shall be undertaken by the United Nations Inter-Agency Humanitarian Programme on behalf of the Government of Iraq under the Distribution Plan with due regard to the sovereignty and territorial integrity of Iraq in accordance with Annex I.

Page 5, Section VII, Observation of the equitable distribution of humanitarian supplies and determination of their adequacy, GENERAL PROVISIONS,
34. The United Nations observation process will be conducted by United Nations personnel in Iraq under the overall authority of the Department of Humanitarian Affairs at United Nations Headquarters in New York in accordance with the provisions described below. Such observation shall apply to the distribution of humanitarian supplies financed in accordance with the procedures set out in the Resolution.

Page 6, Section VII, Observation of the equitable distribution of humanitarian supplies and determination of their adequacy, OBSERVATION PROCEDURES
Articles 36-41 [Summary] look at the observation procedures undertaken by UN expectors.

Page 6, Section VII, Observation of the equitable distribution of humanitarian supplies and determination of their adequacy, GENERAL PROVISIONS,
35. The objectives of the United Nations observation process shall be:
(a) to confirm whether the equitable distribution of humanitarian supplies to the Iraqi population throughout the country has been ensured;
(b) to ensure the effectiveness of the operation and determine the adequacy of the available resources to meet Iraq’s humanitarian needs.

Page 7, Section VII, Observation of the equitable distribution of humanitarian supplies and determination of their adequacy, COORDINATION AND COOPERATION
42. The United Nations observation activities will be coordinated by the Department of Humanitarian Affairs at United Nations Headquarters in New York. Observation will be undertaken by United Nations personnel. The exact number of such personnel will be determined by the United Nations taking into account the practical requirements. The Government of Iraq will be consulted in this regard.

Page 7, Section VII, Observation of the equitable distribution of humanitarian supplies and determination of their adequacy, COORDINATION AND COOPERATION
43. The Iraqi authorities will provide to United Nations personnel the assistance required to facilitate the performance of their functions. United Nations personnel will coordinate with the Iraqi competent authorities.

Page 7, Section VII, Observation of the equitable distribution of humanitarian supplies and determination of their adequacy, COORDINATION AND COOPERATION
44. In view of the importance of the functions which United Nations personnel will perform in accordance with the provisions of this Section of the Memorandum, such personnel shall have, in connection with the performance of their functions, unrestricted freedom of movement, access to documentary material which they find relevant having discussed the matter with the Iraqi authorities concerned, and the possibility to make such contacts as they find essential.

Page 7-8, Section VIII, Privileges and Immunities,
[Summary] Outlines the privileges and immunities of UN personnel.

Page 10-13, Annex 1 [summary] outlines modalities of distribution to the three northernmost provinces (now constituting the Kurdish Autonomous region). Which is conducted by UN agencies rather than the Iraqi government.
Enforcement mechanism: [Summary] Agreement relies on the approval of UN General-Secretary, who is held responsible to the UNGA to report on developments, which cannot be accomplished until Iraq submits its plan. Thus, placing pressure on Iraq to complete the plan. See Section II.

25. The arrival of goods in Iraq purchased under the plan will be confirmed by independent inspection agents to be appointed by the Secretary-General. No payments can be made until the independent inspection agents provide the Secretary-General with authenticated confirmation that the exported goods concerned have arrived in Iraq.
Related cases: No specific mention.
Source: http://www.fas.org/news/un/iraq/oip/s1996356.htm; http://daccess-dds-ny.un.org/doc/UNDOC/GEN/N96/127/71/PDF/N9612771.pdf?OpenElement

Memorandum of understanding between the Secretariat of

the United Nations and the Government of Iraq on theimplementation of Security Council resolution 986 (1995)

Section IGeneral provisions

1. The purpose of this Memorandum of Understanding is to ensure the effectiveimplementation of Security Council resolution 986 (1995) (hereinafter theResolution).

2. The Distribution Plan referred to in paragraph 8 (a) (ii) of theResolution, which has to be approved by the Secretary-General of the UnitedNations, constitutes an important element in the implementation of theResolution.

3. Nothing in the present Memorandum should be construed as infringing uponthe sovereignty or territorial integrity of Iraq.

4. The provisions of the present Memorandum pertain strictly and exclusivelyto the implementation of the Resolution and, as such, in no way create aprecedent.

It is also understood that the arrangement provided for in theMemorandum is an exceptional and temporary measure.

Section IIDistribution Plan

5. The Government of Iraq undertakes to effectively guarantee equitabledistribution to the Iraqi population throughout the country of medicine, healthsupplies, foodstuffs and materials and supplies for essential civilian needs(hereinafter humanitarian supplies) purchased with the proceeds of the sale ofIraqi petroleum and petroleum products.

6. To this end, the Government of Iraq shall prepare a Distribution Plandescribing in detail the procedures to be followed by the competent Iraqiauthorities with a view to ensuring such distribution.

The present distributionsystem of such supplies, the prevailing needs and humanitarian conditions in thevarious Governorates of Iraq shall be taken into consideration with due regardto the sovereignty of Iraq and the national unity of its population.

The planshall include a categorized list of the supplies and goods that Iraq intends topurchase and import for this purpose on a six-month basis.

7. The part of the Distribution Plan related to the three northernGovernorates of Arbil, Dihouk and Suleimaniyeh shall be prepared in accordancewith Annex I, which constitutes an integral part of this Memorandum.

8. The Distribution Plan shall be submitted to the Secretary-General of theUnited Nations for approval.

If the Secretary-General is satisfied that the

/...

plan adequately ensures equitable distribution of humanitarian supplies to theIraqi population throughout the country, he will so inform the Government ofIraq.

9. It is understood by the Parties to this Memorandum that the Secretary-General will not be in a position to report as required in paragraph 13 of theResolution unless the plan prepared by the Government of Iraq meets with hisapproval.

10. Once the Secretary-General approves the plan, he will forward a copy of thecategorized list of the supplies and goods, which constitutes a part of theplan, to the Security Council Committee established by resolution 661 (1990)concerning the situation between Iraq and Kuwait (hereinafter the 661 Committee)for information.

11. After the plan becomes operational, each Party to the present Memorandummay suggest to the other for its consideration a modification to the plan if itbelieves that such adjustment would improve the equitable distribution ofhumanitarian supplies and their adequacy.

Section III

Establishment of the escrow account and audit of that account

12. The Secretary-General, after consultations with the Government of Iraq,will select a major international bank and establish there the escrow accountdescribed in paragraph 7 of the Resolution, to be known as "the United NationsIraq Account" (hereinafter the "Iraq Account").

The Secretary-General willnegotiate the terms of this account with the bank and will keep the Governmentof Iraq fully informed of his actions in choosing the bank and opening theaccount.

All transactions and deductions mandated by the Security Council underparagraph 8 of the Resolution shall be made from the "Iraq Account", which willbe administered in accordance with the relevant Financial Regulations and Rulesof the United Nations.

13. The Iraqi authorities might designate a senior banking official to liaisewith the Secretariat of the United Nations on all banking matters relating tothe "Iraq Account".

14. In accordance with the United Nations Financial Regulations, the "IraqAccount" will be audited by the Board of Auditors who are external independentpublic auditors.

As provided for in the Regulations, the Board of Auditors willissue periodic reports on the audit of the financial statements relating to theaccount.

Such reports will be submitted by the Board to the Secretary-Generalwho will forward them to the 661 Committee and to the Government of Iraq.

15. Nothing in this Memorandum shall be interpreted to create a liability onthe part of the United Nations for any purchase made by the Government of Iraqor any agents acting on its behalf pursuant to the provisions of the Resolution.

Section IV

Sale of petroleum and petroleum products originating in Iraq

16. Petroleum and petroleum products originating in Iraq will be exported viathe Kirkuk-Yumurtalik pipeline through Turkey and from the Mina al-Bakr oilterminal.

The 661 Committee will monitor the exports through those outlets toensure that they are consistent with the Resolution.

Transportation costs inTurkey will be covered by an additional amount of oil, as foreseen in theResolution and in accordance with procedures to be established by the

661 Committee.

The arrangement between Iraq and Turkey concerning the tariffsand payment modalities for the use of Turkish oil installations has beenprovided to the 661 Committee.

17. Each export of petroleum and petroleum products originating in Iraq shallbe approved by the 661 Committee.

18. Detailed provisions concerning the sale of Iraqi petroleum and petroleumproducts are contained in Annex II, which constitutes an integral part of thisMemorandum.

Section VProcurement and confirmation procedures

19. The purchase of medicine, health supplies, foodstuffs, and materials andsupplies for essential civilian needs of the Iraqi population throughout thecountry, as referred to in paragraph 20 of resolution 687 (1991), will, subjectto paragraph 20 below, be carried out by the Government of Iraq, will follownormal commercial practice and be on the basis of the relevant resolutions ofthe Security Council and procedures of the 661 Committee.

20. The purchase of humanitarian supplies for the three northern Governoratesof Arbil, Dihouk and Suleimaniyeh, as provided for in the Distribution Plan,will be carried out in accordance with Annex I.

21. The Government of Iraq will, except as provided for in paragraph 20,contract directly with suppliers to arrange the purchase of supplies, and willconclude the appropriate contractual arrangements.

22. Each export of goods to Iraq shall be at the request of the Government ofIraq pursuant to paragraph 8 (a) of the Resolution.

Accordingly, exportingStates will submit all relevant documentation, including contracts, for allgoods to be exported under the Resolution to the 661 Committee for appropriateaction according to its procedures.

It is understood that payment of thesupplier from the "Iraq Account" can take place only for items purchased by Iraqthat are included in the categorized list referred to in Section II of thepresent Memorandum.

Should exceptional circumstances arise, applications forthe export of additional items may be submitted to the 661 Committee for itsconsideration.

23. As noted above, the 661 Committee will take action on applications for theexport of goods to Iraq in accordance with its existing procedures subject tofuture modifications under paragraph 12 of the Resolution.

The 661 Committeewill inform the Government of Iraq, requesting States, and the Secretary-Generalof the actions taken on the requests submitted.

24. After the 661 Committee has taken action on the applications for export inaccordance with its procedures, the Central Bank of Iraq will request the bankholding the "Iraq Account" to open irrevocable letters of credit in favour ofthe beneficiaries.

Such requests shall be referred by the bank holding the"Iraq Account" to the United Nations Secretariat for approval of the opening ofthe letter of credit by the latter bank, allowing payment from the "IraqAccount" upon presentation of credit-conform documents.

The letter of creditwill require as condition of payment, inter alia, the submission to the bankholding the "Iraq Account" of the documents to be determined by the proceduresestablished by the 661 Committee, including the confirmations by the agentsreferred to in paragraph 25 below.

The United Nations, after consultations withthe Government of Iraq, shall determine the clause to be inserted in allpurchase orders, contracts and letters of credit regarding payment terms fromthe "Iraq Account".

All charges incurred in Iraq are to be borne by theapplicant, whereas all charges outside Iraq are for the account of thebeneficiary.

25. The arrival of goods in Iraq purchased under the plan will be confirmed byindependent inspection agents to be appointed by the Secretary-General.

Nopayments can be made until the independent inspection agents provide theSecretary-General with authenticated confirmation that the exported goodsconcerned have arrived in Iraq.

26. The independent inspection agents may be stationed at relevant Iraqi entrypoints, customs areas or other locations where the functions set out inparagraph 27 of this Section can be performed.

The number and location of thestationing points for the agents will be designated by the United Nations afterconsultations with the Government of Iraq.

27. The independent inspection agents will confirm delivery to Iraq ofshipments.

They will compare the appropriate documentation, such as bills oflading, other shipping documents or cargo manifests, and the documents issued bythe 661 Committee, against goods actually arriving in Iraq.

They will also havethe authority to perform duties necessary for such confirmation, including:

quantity inspection by weight or count, quality inspection including visualinspection, sampling, and, when necessary, laboratory testing.

28. The inspection agents will report all irregularities to the Secretary-General and to the 661 Committee.

If the problem is related to normalcommercial practice (e.g., some shortlanded goods), the 661 Committee and theGovernment of Iraq are informed, but normal commercial resolution practices(e.g.,

claims) go forth.

If the matter is of serious concern, the independentinspection agents will hold the shipment in question pending guidance from the661 Committee.

29. As regards the export to Iraq of parts and equipment which are essentialfor the safe operation of the Kirkuk-Yumurtalik pipeline system in Iraq, therequests will be submitted to the 661 Committee by the national Government ofthe supplier.

Such requests will be considered for approval by the Committee inaccordance with its procedures.

30. If the 661 Committee has approved a request in accordance withparagraph 29, the provisions of paragraph 24 shall apply.

However, since thesupplier can expect payment against future oil sales, as stated in paragraph 10of the Resolution, the proceeds of which are to be deposited in the "IraqAccount", the bank holding the "Iraq Account" will issue an irrevocable letterof credit stipulating that payment can only be effected when at the time ofdrawing the "Iraq Account" has sufficient disposable funds and the UnitedNations Secretariat approves the payment.

31. The requirement of authenticated confirmation of arrival provided for inthis Section shall apply also to the parts and equipment mentioned inparagraph 29.

Section VI

Distribution of humanitarian supplies purchasedunder the Distribution Plan

32. The distribution of humanitarian supplies shall be undertaken by theGovernment of Iraq in accordance with the Distribution Plan referred to inSection II of the present Memorandum.

The Government of Iraq will keep theUnited Nations observation personnel informed about the implementation of theplan and the activities that the Government is undertaking.

33. The distribution of humanitarian supplies in the three northernGovernorates of Arbil, Dihouk and Suleimaniyeh shall be undertaken by the UnitedNations Inter-Agency Humanitarian Programme on behalf of the Government of Iraqunder the Distribution Plan with due regard to the sovereignty and territorialintegrity of Iraq in accordance with Annex I.

Section VII

Observation of the equitable distribution of humanitariansupplies and determination of their adequacy

GENERAL PROVISIONS

34. The United Nations observation process will be conducted by United Nationspersonnel in Iraq under the overall authority of the Department of HumanitarianAffairs at United Nations Headquarters in New York in accordance with theprovisions described below.

Such observation shall apply to the distribution ofhumanitarian supplies financed in accordance with the procedures set out in theResolution.

35. The objectives of the United Nations observation process shall be:

(a) to confirm whether the equitable distribution of humanitarian supplies tothe Iraqi population throughout the country has been ensured;

(b) to ensure the effectiveness of the operation and determine the adequacy ofthe available resources to meet Iraq’s humanitarian needs.

OBSERVATION PROCEDURES

36. In observing the equitable distribution and its adequacy, United Nationspersonnel will use, inter alia, the following procedures.

Food items

37. The observation of the equitability of food distribution will be based oninformation obtained from local markets throughout Iraq, the Iraqi Ministry ofTrade, the information available to the United Nations and its specializedagencies on food imports, and on sample surveys conducted by United Nationspersonnel.

The observation will also include the quantity and prices of fooditems imported under the Resolution.

38. To provide regular updated observation of the most pressing needs, a surveyundertaken by United Nations agencies in cooperation with the appropriate Iraqiministries will serve as a baseline for the continuing observation ofnutritional status of the population of Iraq.

This information will takeaccount of public health data generated by the Ministry of Health (MOH) and therelevant United Nations agencies.

Medical supplies and equipment

39. Observation regarding distribution of medical supplies and equipment willfocus on the existing distribution and storage system and will involve visits tohospitals, clinics as well as medical and pharmaceutical facilities where suchsupplies and equipment are stored.

Such observation will also be guided byhealth statistics data from MOH and surveys by relevant United Nations agencies.

Water/sanitation supplies and equipment

40. Observation of distribution of water/sanitation supplies and equipment willfocus on the determination that they are used for their intended purposes.

Confirmation will be carried out by collecting data on the incidence of water-borne diseases and by water quality control checks by visits to water andsanitation facilities by representatives of relevant United Nations agencies.

In this regard the United Nations will rely on all relevant indicators.

Other materials and supplies

41. With reference to materials and supplies which do not fall within the threeareas indicated above, in particular, those needed for the rehabilitation ofinfrastructures essential to meet humanitarian needs, observation will focus onconfirmation that such materials and supplies are delivered to the predefineddestinations in accordance with the Distribution Plan and that they are used fortheir intended purposes, and on the determination of whether these materials andsupplies are adequate or necessary to meet essential needs of the Iraqipopulation.

COORDINATION AND COOPERATION

42. The United Nations observation activities will be coordinated by theDepartment of Humanitarian Affairs at United Nations Headquarters in New York.

Observation will be undertaken by United Nations personnel.

The exact number ofsuch personnel will be determined by the United Nations taking into account thepractical requirements.

The Government of Iraq will be consulted in thisregard.

43. The Iraqi authorities will provide to United Nations personnel theassistance required to facilitate the performance of their functions.

UnitedNations personnel will coordinate with the Iraqi competent authorities.

44. In view of the importance of the functions which United Nations personnelwill perform in accordance with the provisions of this Section of theMemorandum, such personnel shall have, in connection with the performance oftheir functions, unrestricted freedom of movement, access to documentarymaterial which they find relevant having discussed the matter with the Iraqiauthorities concerned, and the possibility to make such contacts as they findessential.

Section VIIIPrivileges and Immunities

45. In order to facilitate the successful implementation of the Resolution thefollowing provisions concerning privileges and immunities shall apply:

(a) officials of the United Nations and of any of the Specialized Agenciesperforming functions in connection with the implementation of theResolution shall enjoy the privileges and immunities applicable to themunder Articles V and VII of the Convention on the Privileges and Immunitiesof the United Nations, or Articles VI and VIII of the Convention on thePrivileges and Immunities of the Specialized Agencies to which Iraq is aparty;

(b) independent inspection agents, technical experts and other specialistsappointed by the Secretary-General of the United Nations or by heads of theSpecialized Agencies concerned and performing functions in connection with

the implementation of the Resolution, whose names will be communicated tothe Government of Iraq, shall enjoy the privileges and immunities accordedto experts on mission for the United Nations or for the Specialized Agencyunder Article VI of the Convention on the Privileges and Immunities of theUnited Nations or the relevant Annexes of the Convention on the Privilegesand Immunities of the Specialized Agencies respectively;

(c) persons performing contractual services for the United Nations inconnection with the implementation of the Resolution, whose names will becommunicated to the Government of Iraq, shall enjoy the privileges andimmunities referred to in sub-paragraph (b) above concerning experts onmission appointed by the United Nations.

46. In addition, officials, experts and other personnel referred to inparagraph 45 above shall have the right of unimpeded entry into and exit fromIraq and shall be issued visas by the Iraqi authorities promptly and free ofcharge.

47. It is further understood that the United Nations and its SpecializedAgencies shall enjoy freedom of entry into and exit from Iraq without delay orhindrance of supplies, equipment and means of surface transport required for theimplementation of the Resolution and that the Government of Iraq agrees to allowthem to, temporarily, import such equipment free of customs or other duties.

48. Any issue relating to privileges and immunities, including safety andprotection of the United Nations and its personnel, not covered by theprovisions of this Section shall be governed by paragraph 16 of the Resolution.

Section IX

Consultations

49. The Secretariat of the United Nations and the Government of Iraq shall, ifnecessary, hold consultations on how to achieve the most effectiveimplementation of the present Memorandum.

Section XFinal clauses

50. The present Memorandum shall enter into force following signature, on theday when paragraphs 1 and 2 of the Resolution become operational and shallremain in force until the expiration of the 180 day period referred to inparagraph 3 of the Resolution.

51. Pending its entry into force, the Memorandum shall be given by the UnitedNations and the Government of Iraq provisional effect.

SIGNED this 20th day of May 1996 at New York in two originals in English.

For the United Nations

(Signed) Hans CORELLUnder-Secretary-General

The Legal Counsel

For the Government of Iraq

(Signed) Abdul Amir AL-ANBARIAmbassador Plenipotentiary

Head of the Delegation of Iraq

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Annex I

1. In order to ensure the effective implementation of paragraph 8 (b) of theResolution, the following arrangements shall apply in respect of the IraqiGovernorates of Arbil, Dihouk and Suleimaniyeh.

These arrangements shall beimplemented with due regard to the sovereignty and territorial integrity ofIraq, and to the principle of equitable distribution of humanitarian suppliesthroughout the country.

2. The United Nations Inter-Agency Humanitarian Programme shall collect andanalyze pertinent information on humanitarian needs in the three northernGovernorates.

On the basis of that information, the Programme will determinethe humanitarian requirements of the three northern Governorates for discussionwith the Government of Iraq and subsequent incorporation in the DistributionPlan.

In preparing estimates of food needs, the Programme will take intoconsideration all relevant circumstances, both within the three northernGovernorates and in the rest of the country, in order to ensure equitabledistribution.

Specific rehabilitation needs in the three northern Governoratesshall receive the necessary attention.

3. Within a week following the approval of the Distribution Plan by theSecretary-General, the Programme and the Government of Iraq will holddiscussions to enable the Programme to determine how the procurement ofhumanitarian supplies for the three northern Governorates can be undertaken mostefficiently.

These discussions should be guided by the followingconsiderations.

The bulk purchase by the Government of Iraq of standard foodcommodities and medicine may be the most cost-effective means of procurement.

Other materials and supplies for essential civilian needs, specifically requiredfor the three northern Governorates, may be more suitably procured through theUnited Nations system in view of technical aspects related to their proper use.

4. To the extent that purchases and deliveries are made by the Government ofIraq in response to the written communication of the Programme, an amountcorresponding to the cost of the delivered goods will be deducted from theamount allocated to the Programme from the "Iraq Account".

5. Humanitarian supplies destined for distribution in the three northernGovernorates shall be delivered by the Programme to warehouses located withinthese Governorates.

Such supplies can also be delivered by the Government ofIraq or the Programme, as appropriate, to warehouses in Kirkuk and Mosul.

Thewarehouses shall be managed by the Programme.

The Government of Iraq shallensure the prompt customs and administrative clearances to enable the safe andquick transit of such supplies to the three northern Governorates.

6. The Programme shall be responsible in the three northern Governorates forthe storage, handling, internal transportation, distribution and confirmation ofequitable distribution of humanitarian supplies.

The Programme will keep theGovernment of Iraq informed on the implementation of distribution.

7. Whenever possible and cost-effective, the Programme shall use appropriatelocal distribution mechanisms which are comparable to those existing in the rest

of Iraq in order to effectively reach the population.

Recipients under thisarrangement will pay a fee for internal transportation, handling, anddistribution as in the rest of the country.

The Programme shall ensure that thespecial needs of internally displaced persons, refugees, hospital in-patientsand other vulnerable groups in need of supplementary food are appropriately met,and will keep the Government of Iraq informed.

8. The Programme will observe that humanitarian supplies are used for theirintended purposes, through visits to sites and by collecting relevant data.

TheProgramme will report to the Department of Humanitarian Affairs at UnitedNations Headquarters in New York and the Government of Iraq any violationobserved by the Programme.

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Annex II

1. The State concerned or, if the 661 Committee so decides, the nationalpetroleum purchaser authorized by the 661 Committee, shall submit to theCommittee for handling and approval the application, including the relevantcontractual documents covering the sales of such petroleum and petroleumproducts, for the proposed purchase of Iraqi petroleum and petroleum products,endorsed by the Government of Iraq or the Iraqi State Oil Marketing Organization(hereinafter SOMO) on behalf of the Government.

Such endorsement could be doneby sending a copy of the contract to the 661 Committee.

The application shallinclude details of the purchase price at fair market value, the export route,opening of a letter of credit payable to the "Iraq Account", and other necessaryinformation required by the Committee.

The sales of petroleum and petroleumproducts shall be covered by contractual documents.

A copy of these documentsshall be included in the information provided to the 661 Committee together withthe application for forwarding to the independent inspection agents described inparagraph 4 of this Annex.

The contractual documents should contain thefollowing information:

quantity and quality of petroleum and petroleumproducts, duration of contract, credit and payment terms and pricing mechanism.

The pricing mechanism for petroleum should include the following points:

markercrude oil and type of quotations to be used, adjustments for transportation andquality, and pricing dates.

2. Irrevocable confirmed letters of credit will be opened by the oilpurchaser’s bank with the irrevocable undertaking that the proceeds of theletter of credit will be paid directly to the "Iraq Account".

For this purpose,the following clauses will have to be inserted in each letter of credit:

"- Provided all terms and conditions of this letter of credit are compliedwith, proceeds of this letter of credit will be irrevocably paid into the"Iraq Account" with ...... Bank."

"- All charges within Iraq are for the beneficiary’s account, whereas allcharges outside Iraq are to be borne by the purchaser."

3. All such letters of credit will have to be directed by the purchaser’s bankto the bank holding the "Iraq Account" with the request that the latter adds itsconfirmation and forwards it to the Central Bank of Iraq for the purpose ofadvising SOMO.

4. The sale of petroleum and petroleum products originating in Iraq will bemonitored by United Nations independent oil experts appointed by the Secretary-General of the United Nations to assist the 661 Committee.

The monitoring ofoil exports will be carried out by independent inspection agents at the loadingfacilities at Ceyhan and Mina al-Bakr and, if the 661 Committee so decides, atthe pipeline metering station at the Iraq-Turkey border, and would includequality and quantity verification.

They would authorize the loading, after theyreceive the information from the United Nations oil experts that the relevantcontract has been approved, and report to the United Nations.

5. The United Nations will receive monthly reports from SOMO on the actualvolume and type of petroleum products exported under the relevant salescontracts.

6. The United Nations Secretariat and SOMO shall maintain continuing contactand in particular United Nations oil experts shall meet routinely with SOMOrepresentatives to review market conditions and oil sales.

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