UN suspends Iraq`s obligation to compensate Kuwait invasion damages

USPA News - The Iraqi government will not be required to pay the Kuwait Petroleum Corporation until at least January 2016 to reimburse the state-owned company for losses suffered from Iraq`s invasion of Kuwait in 1990, a United Nations (UN) commission decided on Thursday, citing the current conflict in Iraq. The UN Compensation Commission`s Governing Council made the decision during a special session on Thursday, following a request from the Iraqi government for a temporary postponement of its obligation under a UN Security Council resolution to repay victims of the Kuwait invasion.

This requires Iraq to deposit 5 percent from the proceeds of all export sales of petroleum, petroleum products and natural gas. "Noting the extraordinarily difficult security circumstances in Iraq and the unusual budgetary challenges associated with confronting this issue, the Governing Council adopted decision 272 (2014)," the Commission said in a statement. "The decision postpones Iraq`s obligation to deposit five percent of oil proceeds and five percent of the value of any non-monetary payments to service providers into the Compensation Fund until 1 January 2016." The Kuwait Petroleum Corporation is still owed approximately $4.6 billion after Iraq paid a further $1.06 billion through the UN commission in October. The commission previously expected that the remaining balance of $4.6 billion would be fully paid by the end of 2015, but Thursday`s decision will delay the completion of that process until at least the end of 2016. Kuwait had expressed support for Iraq`s postponement request due to the current conflict in Iraq, where Islamic State militants have seized territory in an attempt to establish a caliphate. The UN commission had previously recognized Iraq`s ongoing commitment to meeting its obligations despite the difficult security circumstances. The UNCC was established in 1991 as a subsidiary organ of the UN Security Council and it received nearly 3 million claims, including claims from close to 100 governments for either themselves, their nationals or their corporations. The largest sum, approximately $14.7 billion, was awarded to the Kuwait Petroleum Corporation in 2000 for damages to Kuwait`s oil field assets and associated production and sales losses. The UN commission has so far paid out approximately $47.8 billion, with all successful claims by individuals being funded by 2007. It is no longer possible to submit new claims. In August 1990, Iraqi President Saddam Hussein ordered his forces to invade and occupy Kuwait. This conflict resulted in the Gulf War during which U.S.-led forces successfully fought to remove Iraqi forces from Kuwait. It is estimated that 25,000 to 40,000 people were killed during the conflict, which ended in February 1991.