US moves to end Iraq sanctions

Iraqis are desperate for hard currency to buy basic commodities

The United States is to present a draft resolution to the United Nations calling for an end to sanctions against Iraq.

US Secretary of State Colin Powell said the motion - co-signed by Britain and Spain - is likely to be put to the Security Council this week.

The resolution is also expected to map out a role for the UN in rebuilding Iraq.

US President George W Bush said he was getting the ball rolling by suspending a 1990 US law imposing sanctions on Iraq, as well as lifting some economic sanctions - a move announced earlier on Wednesday.

"The regime that the sanctions were directed against no longer rules Iraq," Mr Bush told reporters in Washington, alongside Spanish Prime Minister Jose Maria Aznar.

The sanctions were first imposed following Iraq's invasion of Kuwait in 1990.

This is the most fantastic news

Rubar Sandi
US-Iraq Business Council

Mr Powell said the draft UN resolution would be "forward-looking" and would "not fight the battles of the past" - a reference to the bitter divisions in the council before the US-led invasion of Iraq.

But the BBC's Jon Leyne in Washington says Russia and some other council members are reluctant to relinquish their control over Iraq's oil, exercised under the sanctions regime.

Mr Powell, speaking after discussing the measure with UN Secretary General Kofi Annan in New York, said the US was working to include Germany, France, Russia and China in the new resolution.

"Whatever happened in the past is in the past," he said.

The BBC's correspondent in Washington, Justin Webb, says the draft resolution is understood to call for the immediate lifting of sanctions and the phasing out over four months of the oil-for-food programme.

The resolution, he says, would create an international advisory board, including the UN secretary general, the World Bank and the International Monetary Fund to audit the spending of Iraq's oil revenue and ensure it was being used to benefit the Iraqi people.

Restrictions the US has eased include:

• rules which will allow the thousands of Iraqis resident in the US to send up to $500 a month to family and friends in Iraq.

• allowing humanitarian aid supplies to be sent to Iraq

• authorising any activity paid for by the US Government, including reconstruction moves by contractors

• permitting privately-funded humanitarian activities by US-based organisations.

However, restrictions on the export of goods which are controlled for national security purposes will remain, with a special government license being required for such trade.

Diaspora

Thousands of Iraqis living abroad have struggled since the sanctions were imposed to get money to loved ones back home.

Rubar Sandi, chairman of the US-Iraq Business Council in Washington DC, has been sending money to relatives for years - and has been among those who have led the lobbying to allow remittances and humanitarian assistance.

"This is the most fantastic news," he told BBC News Online shortly after the announcement."

"We've been pushing for this for a long time, so we can get to work back in Iraq."

His organisation, he said, can now get on with establishing offices to promote humanitarian activity in Iraq.

Now that sanctions are being lifted, the way is clear for the US to hire consultants to rebuild Iraq's currency and financial system.

Sources in Washington told BBC News Online that BearingPoint is likely to get the deal, which could be worth up to $70m.

BearingPoint already has a three-year $40m contract to do the same in Afghanistan.