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U.S. wants power to spend Iraq oil money  
 
 By Evelyn Leopold

UNITED NATIONS (Reuters) - The United States intends to introduce a
resolution today that will end 12 years of U.N. sanctions against Iraq
and give Washington and its allies the power to spend Baghdad`s future
oil revenues for aid and reconstruction.

The eight-page draft resolution would remove all sanctions imposed on
Iraq in 1990 except for an arms embargo. But the document omits any
reference to U.N. inspectors returning to Iraq to check on weapons of
mass destruction, as 12 years of Security Council resolutions demanded.

Russia, France and others are expected to raise questions about the
dearth of international arms inspections, nominal role given to U.N.
officials and U.S.-British control of the oil revenues, now supervised
by the United Nations.

"The big debate will be the balance between the coalition forces and the
United Nations, with several members wanting a stronger, more defined
U.N. role," one council diplomat said. "And the debate will certainly be
about the oil money."

The draft, obtained by Reuters and circulated to key Security Council
members, would phase out the current U.N. oil-for-food humanitarian
program over four months.

It would allow Iraq to sell oil again without U.N. controls. The monies
would be deposited in an "Iraqi Assistance Fund" for humanitarian
purposes and reconstruction.

This new institution would have an advisory board that would include
officials from the United Nations, International Monetary Fund, World
Bank and others.

But decisions on where to spend the money would be made by the United
States and Britain and their allies in the war that deposed President
Saddam Hussein, in consultation with an Iraqi interim authority and
until a new Iraqi government is formed.

The draft does not call for the return of U.N. arms inspectors to verify
that Iraq no longer has weapons of mass destruction, as specified in
some 16 earlier U.N. resolutions.

NO ROLE FOR U.N. INSPECTORS

U.S. Ambassador John Negroponte, who was briefing council members, said
the Bush administration did not see "any role for the U.N. (inspectors)
for the foreseeable future."

"The coalition has taken over the process of inspecting in Iraq for
weapons of mass destruction," he told reporters.

The document asks Secretary-General Kofi Annan to appoint a special
coordinator to supervise U.N. humanitarian assistance and
"reconstruction activities in Iraq."

The coordinator would play a nominal role in establishing governing
institutions, promoting human rights, legal and judicial reforms, and
helping build an Iraqi police force.

The resolution would phase out the U.N. oil-for-food humanitarian
program over four months but honour "priority civilian goods" in
contracts already approved. It was unclear whether all approved
contracts for supplies, including $1.6 billion (one billion pounds) in
Russian contracts, would be fulfilled.

Without adoption of the resolution, no Iraqi or U.S. entity in Baghdad
has the legal authority to export oil. The United States wants the
measure passed by June 3, when the oil-for-food program needs to be
renewed.

The program was designed to ease the impact of sanctions imposed when
Saddam`s troops invaded Kuwait in August 1990. It allowed Iraq to sell
oil to purchase food, medicine and other civilian goods under U.N.
supervision. Oil revenues are deposited into a U.N. escrow account to
pay suppliers.

The oil-for-food fund now has some $13 billion in outstanding contracts
for food, medicine and other civilian goods ordered by the ousted Iraqi
government.