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Last Updated: Saturday, 20 March, 2004, 13:44 GMT
Annan seeks Iraq 'fraud' inquiry
Iraqi women buying grain
The UN-administered scheme was vital for feeding Iraqis
UN Secretary General Kofi Annan has called for an independent inquiry into allegations of fraud and corruption in its oil-for-food programme in Iraq.

An internal UN inquiry is already under way, but Mr Annan wants outside firms and individuals to be investigated too.

The programme aimed to help Iraq cope with sanctions by allowing oil sales profits to be used for basic goods.

But the US now estimates that Saddam Hussein's regime made billions more out of it than previously thought.

The US Treasury thinks $10bn of illicit gains were made between 1997 and 2002 from the scheme - up from the previous estimate of $6bn.

In January, an Iraqi newspaper alleged that individuals and organisations from more than 40 countries had received vouchers for cut-price oil from the Iraqi regime.

'Serious consideration'

In a letter to the Security Council, Mr Annan proposed setting up an independent high-level inquiry to look into alleged corruption in the oil-for-food programme which was run by the UN from 1996 until last year.

It is highly possible that there's been quite a lot of wrongdoing, but we need to investigate and get to see who is responsible
Kofi Annan

He said the allegations, whether well-founded or not, had to be taken seriously.

Such an independent inquiry would need the backing of the Security Council, and Mr Annan said he would be sending it more details.

Under the oil-for-food programme, more than $65 billion was handed out for food, medicine and other non-military goods to ease the impact of 1991 Gulf War sanctions on ordinary Iraqis.

It was funded by sales of limited quotas of oil.

The programme was closed after the invasion of Iraq by US-led forces.


The US General Accounting Office (GAO), the investigatory arm of Congress, says Saddam Hussein earned $5.7bn from oil smuggled out of Iraq and $4.4bn from illegal surcharges he placed on oil.

GAO officials say the oil was smuggled through Syria, Jordan and the Persian Gulf and that the government imposed surcharges of up to 50 cents a barrel. It also took commissions of between 5-10% from suppliers.

In order to obtain more Iraqi money stashed away by the old regime, the US Treasury on Thursday submitted the names of 16 Saddam Hussein family members and 191 quasi-governmental firms to the UN.

A UN Security Council resolution requires that member nations freeze accounts which contain Iraqi money and hand over the funds for Iraq's reconstruction.

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