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U.N. orders Iraqi oil assets seized


WASHINGTON -- In another burst of impatience with Iraqi leader Saddam Hussein, the U.N. Security Council ordered the seizure of frozen Iraqi oil assets yesterday to help pay for that which Iraq owes the United Nations under the cease-fire resolutions that ended the Persian Gulf War.

By a 14-0 vote, with China abstaining, the Security Council adopted a U.S.-sponsored resolution that details a complicated method for nations to deal with Iraqi oil and with Iraqi oil proceeds.

Under U.N. embargoes imposed after Iraq invaded Kuwait in August 1990, Iraq was prohibited from selling its oil or collecting oil proceeds.

Much of the money now will go into a special U.N. account that Secretary-General Boutros Boutros-Ghali is authorized to use for the financing of U.N. inspections in Iraq, the elimination of Iraqi weapons of massive destruction, the compensation for victims of the Iraqi invasion, and the supply of humanitarian aid to Iraqis.

Iraq was supposed to pay for all this under U.N. resolutions, but thus far has not.

U.S. officials estimate that anywhere from $300 million to $1 billion would be turned over to the United Nations as a result of the resolution.

Most of the oil proceeds are believed to be held in the United States, and most of the oil is reportedly held by Turkey, Saudi Arabia and Yemen.

Iraqi Foreign Minister Mohammed Al-Sahaf tried to head off the Security Council action by promising that Iraq would resume negotiations with the United Nations over resolutions ordering the Iraqis to sell $1.6 billion worth of oil, with a proportion of the proceeds going to the United Nations as compensation for its programs in Iraq.

Previous negotiations have ended in failure over Iraq's insistence that the plan was an infringement of its sovereignty, and the foreign minister's promise was evidently not taken seriously by most of the council members.

U.S. Ambassador Edward Perkins called the resolution "a reasonable and proportionate response to Iraq's intransigence."

"The needs of the Iraqi people and of the United Nations required the Security Council to ensure that these critical programs are securely funded," he said.

But Chinese Ambassador Li Daoyou said such "extraordinary measures" were unnecessary since Iraq had indicated its willingness to negotiate again with the United Nations on the matter.

The ambassador also described the resolution as a violation of Iraqi sovereignty.

Under the resolution, countries may deduct debts owed by Iraq to their citizens or corporations before turning the funds over to the special U.N. account.

As a result, analysts said, none of the funds would be relayed to the United Nations from Britain, France or Japan. In addition, governments are not required to turn over more than $200 million to the account.

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