Oil-for-Food Programme

The Oil-for-Food Programme (OIP), established by the United Nations in 1995 (under UN Security Council Resolution 986) was established to allow Iraq to sell oil on the world market in exchange for food, medicine, and other humanitarian needs for ordinary Iraqi citizens without allowing Iraq to boost its military capabilities. The programme was introduced by United States President Bill Clinton's administration in 1995, as a response to arguments that ordinary Iraqi citizens were inordinately affected by the international economic sanctions aimed at the demilitarisation of Saddam Hussein's Iraq, imposed in the wake of the first Gulf War. The sanctions were discontinued on 21 November 2003 after the U.S. invasion of Iraq, and the humanitarian functions turned over to the Coalition Provisional Authority. The programme was de facto terminated in 2003 and de jure terminated in 2010. Although the sanctions were effective, there were revelations of widespread corruption in the programme and abuse of its funds. The Oil-for-Food Programme was instituted to relieve the extended suffering of civilians as the result of the United Nations' imposition of comprehensive sanctions on Iraq following Iraq's invasion of Kuwait in August 1990. Security Council Resolution 706 of 15 August 1991 was introduced to allow the sale of Iraqi oil in exchange for food. Security Council Resolution 712 of 19 September 1991 confirmed that Iraq could sell up to US$1.6 billion in oil to fund an Oil-For-Food Programme. After an initial refusal, Iraq signed a memorandum of understanding (MOU) in May 1996 for arrangements to be taken to implement that resolution. The Oil-for-Food Programme started in December 1996, and the first shipments of food arrived in March 1997. Sixty percent of Iraq's twenty-six million people were solely dependent on rations from the oil-for-food plan. The programme used an escrow system. Oil exported from Iraq was paid for by the recipient into an escrow account possessed until 2001 by BNP Paribas bank, rather than to the Iraqi government.