Secretary-General Ban Ki-moon said he was satisfied with Iraq's continued transfer of five per cent of its oil proceeds to the Compensation Fund, in compliance with a Security Council resolution, but called for auditing successor account to the Development Fund for Iraq (DFI).

In a report to the Security Council circulated late Tuesday, Ban expressed "appreciation to the Government of Iraq" for its maintenance of the mechanism for the transfer of the five per cent of oil proceeds, "and its continued cooperation with the Compensation Commission." However, he added that "while all the indicators are positive and suggest that the Government of Iraq is compliant with its obligations, only after an audit has been conducted on the successor account to the Development Fund for Iraq will it be possible to confirm this conclusion." Ban said the Governing Council of the Geneva-based Compensation Commission has been "actively monitoring" the developments following the expiration of the mandate of the International Advisory and Monitoring Board (IAMB) for Iraq on June 30, 2011, and the transfer since then of the oversight, control, reporting, and use of Iraqi oil export revenues to the Iraqi Committee of Financial Experts (COFE.) COFE has appointed the US firm, Ernst Young, to conduct the 2011 audit of the Development Fund for Iraq and its successor account.

He said the Head of the Compensation Commission and the UN Controller met, last July, with the Head of COFE who "reaffirmed that the arrangements for the transfer of five percent" of the proceeds from all export sales of Iraqi oil and gas "would remain unchanged." Ban also recalled that the Iraqi Government said, in an April report, that it would "consult the UN Secretariat on in-kind payments" of its oil and gas export sales "with a view to finding a transparent mechanism to ensure that the equivalent of five per cent of such transactions is deposited in the Compensation Fund." He said the Head of the Compensation Commission and the UN Controller stressed to the Head of COFE when they discussed the in-kind payment, during the July meeting, that "if Iraq will be engaging in such transactions, a proper accounting mechanism must be put in place to ensure that five per cent of their value is recorded and an equivalent amount transferred to the Compensation Fund." Ban said the Compensation Commission reiterated this position to the Iraqi Government, last August and again last October, and "is awaiting confirmation from COFE that such a mechanism has been put in place." He said that since COFE took over the oversight function of the Iraqi oil sales from the IAMB last June, Kuwait received from the Compensation Commission two payments of more than one billion dollars each: the first was on July 28th and the second on October 27th.

Kuwait, he added, is expected to receive the next payment, of the same amount, on the 26sth of this month.

The UN Compensation Commission was set up by the Security Council in 1991 to process claims and pay compensation for losses resulting from Iraq's invasion and occupation of Kuwait in August 1990. Compensation is payable to successful claimants from the that now receives five per cent of the proceeds from Iraqi oil sales. (end) .

Source: KUNA