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Compendium of Procedures for the Processing of Applications under Resolution 986 (1996),
Resolution 1409 (2002) and Resolution 1454 (2002)
Provided for information purposes:
please note that the OIP is unable to respond to inquiries from companies or their representatives who should direct all
inquiries or requests for further information to their Permanent Mission
Introduction
The applications for export of goods to Iraq under resolution 986 (1995) and for which payment is to be made from the United Nations Iraq account are submitted to the Office of Iraq Programme (OIP) by the relevant permanent or observer missions and UN agencies.
The applications are reviewed and registered in a maximum of 10 working days, and provided the application is in compliance with all the requirements, a unique registration number (Comm. number) is issued.
The application is then reviewed by OIP experts before being forwarded for further processing to UNMOVIC/IAEA and, if necessary, to the 661 Committee.
Additional information and clarifications may be requested from the suppliers at any point of the process.
This document summarizes the revised procedures that guide processing of applications submitted under resolution 986(1996).
The main sections include:
-
Basic Principles stemming from the
Memorandum of
Understanding between the
Secretariat of the United Nations and the Government of Iraq on the
implementation of Security Council resolution 986 (1995).
-
Revised Procedures approved by Security Council
resolution 1454 (2002), on 30 December 2002, with Processing Charts.
-
Reconsideration Procedures – extensive explanation of
options available to suppliers if any item in the application is deemed to
be on the
Goods Review List (GRL) or subject to the provisions of paragraph
24 of
resolution 687(1991) by the UN technical experts.
-
Authentication and Payments – details of conditions
that are to be met for funds to be released to suppliers from the Iraq
escrow account following the delivery of goods to Iraq.
BASIC
PRINCIPLES
- The Memorandum of
Understanding between the Secretariat of the United Nations and the
Government of Iraq on the implementation of Security Council resolution
986 (1995) stipulates: Each export of goods to Iraq shall be at the
request of the Government of Iraq pursuant to paragraph 8 (a) of
resolution 986 (1995). Accordingly, exporting States will submit all
relevant documentation, including contracts, for all goods to be
exported under the Resolution to the 661 Committee for appropriate
action according to procedures
adopted by Security Council resolution 1409(2002). It is understood that
payment to the supplier from the "Iraq Account" can take place
only for items purchased by Iraq that are included in the categorized
list referred to in Section II of the present Memorandum. Should
exceptional circumstances arise, applications for the export of
additional items may be submitted to the 661 Committee for its
consideration.
- The Government of Iraq will
prepare a categorized list of humanitarian supplies which it intends to
purchase and import pursuant to resolution 986 (1995). This list will be
submitted to the Secretary-General together with the distribution plan
referred to in paragraph 8(a)(ii) of the resolution.
- The Government of Iraq or the
United Nations Inter-Agency Humanitarian Programme (for the three
northern governorates of Dohuk, Erbil and Sulaymaniyah) will contract
directly with suppliers to arrange the purchase of humanitarian
supplies, and will conclude the appropriate contractual arrangements.
PROCEDURES ADOPTED UNDER SCR 1454 (2002)
(Please
also refer to the
PROCESSING CHART)
1.
The following procedures replace paragraphs 29 to 34 of document
S/1996/636* and other existing procedures, notably for the implementation of
the relevant provisions of paragraphs 17, 18, and 25 of
resolution 1284
(1999) related to the processing of applications to be financed from the
escrow account established pursuant to paragraph 7 of resolution 986 (1995).
2.
Each application (the "Notification or Request to Ship Goods to
Iraq," as attached to these procedures, hereafter referred to as "the
application,") for the sale or supply of commodities or products to
include services ancillary to the supply of such commodities and products,
to Iraq to be financed from the escrow account established pursuant to
paragraph 7 of resolution 986 (1995) must be forwarded to the Office of the
Iraq Programme (OIP) by the exporting States through permanent or observer
missions, or by United Nations agencies and programmes. Each application
should include complete technical specifications, as requested in the
standard application form, concluded arrangements (e.g., contracts), and
other relevant information, including, if known, whether the application
contains any item(s) covered by the Goods Review List (GRL), in order for a
determination to be made on whether the application contains any item
referred to in paragraph 24 of resolution 687 (1991) as it relates to
military commodities and products, or military-related commodities or
products covered by the GRL.
3.
Each application will be reviewed and registered by OIP within ten
working days. In the case of a technically incomplete application, OIP may
request additional information before transmitting the application to the
United Nations Monitoring, Verification and Inspection Commission (UNMOVIC)
and the International Atomic Energy Agency (IAEA). If OIP determines that
the requested information is not provided within 90 days, the application
will be considered supplier-inactive and no further action on the
application will be taken until the information is provided. If the
requested information is not received within a further 90 days, the
application will lapse. OIP should notify the submitting mission or United
Nations agency in writing of any change in the status of the application.
The OIP will identify an official to act as a contact point on each
application.
4.
After OIP registration of the application, each application will be
evaluated by technical experts from UNMOVIC and IAEA in order to determine
whether the application contains any item referred to in paragraph 24 of
resolution 687 (1991) as it relates to military commodities and products, or
military-related commodities or products covered by the GRL (GRL item(s)).
At their discretion and subject to the approval of the 661 Committee,
UNMOVIC and IAEA may issue guidance regarding what categories of
applications do not contain any item(s) covered by paragraph 24 of
resolution 687 (1991) as it relates to military commodities and products, or
military-related commodities or products covered by the GRL. UNMOVIC, IAEA
and OIP, working in consultation, may develop a procedure whereby OIP may
evaluate and approve applications that, based on this guidance, fall within
these categories.
UNMOVIC and IAEA should put into their records the information about
the applications mentioned in subparagraphs a, b, c and d below, without
prejudice to the review of these applications under the current procedures,
and this information should be subject to review, together with the reviews
of the GRL and its procedures as set forth in paragraph 2 of this
resolution, when:
(a)
An application contains information about an item reviewed by UNMOVIC
and IAEA that can be applied to weapons of mass destruction or missiles
systems, or increase conventional military capabilities; or,
(b)
The technical review of an application by UNMOVIC and IAEA yields
ambiguity as to whether the technical specifications of any item included in
such application are items covered by the GRL; or,
(c)
The technical evaluation of any application conducted by UNMOVIC or
IAEA determines that the amount of any item included in an application
exceeds requirements typically associated with the civilian end use and the
item is deemed to have potential military applications;
(d)
The 661 Committee may request that Iraq explain the apparent
stockpiling of an item through its purchases, and may request that OIP
conduct an independent investigation.
In
general, when experience under resolution 1409 (2002) and this resolution
indicates to OIP, UNMOVIC, and the IAEA a need for adjustment of the Goods
Review List and its procedures with a view to facilitating the flow of
humanitarian goods to Iraq, then OIP, UNMOVIC, and the IAEA shall recommend
appropriate adjustments for consideration by the Council in the context of
regular reviews of the Goods Review List and its procedures.
5.
Military goods and services are prohibited for sale or supply to Iraq
under paragraph 24 of resolution 687 (1991) and are not subject to review
under the GRL. For consideration of dual-use goods and services referred to
in paragraph 24 of resolution 687 (1991), UNMOVIC and IAEA should process
these goods and services pursuant to paragraph 9 of these procedures.
6.
Upon receipt of a registered application from OIP, UNMOVIC and/or
IAEA will have ten working days to evaluate an application as set forth in
paragraphs 4 and 5. Absent action by UNMOVIC and/or IAEA within the ten
working day period, the application will be considered approved. In the
course of conducting the technical evaluation as set out in paragraphs 4 and
5 above, UNMOVIC and/or IAEA may request additional information from the
submitting missions or United Nations agency. The submitting mission or
United Nations agency should provide the additional information requested
within a period of 90 days. Once UNMOVIC and/or IAEA receive the requested
information, UNMOVIC and/or IAEA will have ten working days to evaluate the
application under the procedure set forth in paragraphs 4 and 5.
7.
If UNMOVIC and/or IAEA determine that the submitting mission or
United Nations agency has not provided the requested additional information
within the 90-day period set out in paragraph 6 above, the application will
be considered supplier-inactive and no further action on the application
will be taken until the information is provided. If the requested
information is not provided within a further 90 days, the application will
lapse. OIP should notify the submitting mission or United Nations agency in
writing of any change in the status of the application.
8.
If UNMOVIC and/or the IAEA determine that the application contains
any item referred to in paragraph 24 of resolution 687 (1991) as it relates
to military commodities and products, the application shall be considered
ineligible for approval for the sale or supply to Iraq. UNMOVIC and/or IAEA
will provide to the submitting mission or United Nations agency through OIP
a written explanation of this determination.
9.
If UNMOVIC and/or IAEA determine that the application contains any
GRL item(s), they will immediately inform through OIP the submitting mission
or United Nations agency. Pursuant to paragraph 11 below, absent a request
by the submitting mission or United Nations agency for reconsideration
within ten working days, OIP will forward the application containing the GRL
item(s) to the 661 Committee for the purpose of evaluating whether the GRL
item(s) may be sold or supplied to Iraq. UNMOVIC and/or IAEA will provide to
the 661 Committee through OIP a written explanation of this determination.
In addition, OIP, UNMOVIC and/or IAEA, at the request of the submitting
mission or United Nations agency, will provide to the 661 Committee a
complete and thorough assessment of the humanitarian, economic and security
implications, of the approval or denial of the GRL item(s), including the
viability of the whole contract in which the GRL item(s) appears and the
risk of diversion of the item(s) for military purposes. The assessment
provided by OIP to the 661 Committee should be transmitted in parallel by
OIP to the submitting mission or United Nations agency. OIP will immediately
inform appropriate United Nations agents of the finding of a GRL item(s) in
the application and that the GRL item(s) may not be sold or supplied to Iraq
unless otherwise notified by OIP that the procedures set forth in paragraphs
11 or 12 have resulted in approval for sale or supply of the GRL item to
Iraq. The remaining items in the application, which are determined as not
covered by the GRL, will be considered approved for sale or supply to Iraq
and, at the discretion of the submitting mission or United Nations agency,
and with the consent of the contracting parties, will be processed according
to the procedure in paragraph 10 below. The relevant approval letter may be
issued for such approved items under request from the submitting mission or
United Nations agency.
10.
If UNMOVIC and/or IAEA determine that the application does not
contain any item referred to in paragraph 4 above, OIP will inform
immediately the Government of Iraq and the submitting mission or United
Nations agency in written form. The exporter will be eligible for payment
from the escrow account established pursuant to paragraph 7 of resolution
986 (1995) upon verification by United Nations agents that the items in the
application have arrived in Iraq as contracted. OIP and the United Nations
Treasury will inform the banks within five working days that the items in
the application have arrived in Iraq.
11.
If the mission or United Nations agency submitting an application
disagrees with the determination that an application contains an item(s)
covered by paragraph 24 of resolution 687 as it relates to military
commodities and products, or military-related commodities or products
covered by the GRL, it may request a reconsideration of this decision, based
on the provision of technical information and/or explanations not previously
included in the application, within ten working days to OIP. In that event,
UNMOVIC and/or IAEA, will appoint experts to reconsider the item(s) in
accordance with the procedures set out in paragraphs 4 to 6 above. The
decision of UNMOVIC and/or IAEA will be final and no further reconsideration
will be permitted. UNMOVIC and/or IAEA will provide to the 661 Committee
through OIP a written explanation of the final decision of the
reconsideration process. Applications shall not be forwarded to the 661
Committee until the reconsideration period has expired without a request
being filed.
12.
Upon receipt of an application pursuant to paragraphs 9 or 11 above,
the 661 Committee will have 10 working days to determine under existing
procedures whether the item(s) may be sold or supplied to Iraq. The
Committee may take a decision on an item(s) according to the following
options: (a) Approval;
(b) Approval subject to conditions as stipulated by the 661 Committee; (c)
Denial;
(d) Request for additional information. Absent action by the Committee
within the 10 working day period, the application will be considered
approved. A Committee member may request additional information. If the
additional information is not provided in the 90-day period, the item(s)
will be considered supplier-inactive and no further action on the
application will be taken until the information is provided. If the
requested information is not provided within a further 90 days, the
application will be considered lapsed. OIP should notify the submitting
mission or United Nations agency in writing of any change in the status of
the application. The 661 Committee will have 20 working days to evaluate the
requested additional information once provided by the submitting mission or
United Nations agency. Absent action by the Committee during the 20 working
day period, the item will be considered approved.
13.
Where the 661 Committee does not approve an item(s) for sale or
supply to Iraq, the Committee will notify the submitting mission or United
Nations agency with an explanation through OIP accordingly. The submitting
mission or United Nations agency will have 30 working days to petition OIP
to have the 661 Committee reconsider its decision based on new information
not previously included in the application as reviewed by the 661 Committee.
A decision by the 661 Committee on a petition received during this period
shall be made within five working days and shall be considered final. Absent
such a petition within 30 working days, the item will be considered
ineligible for sale or supply to Iraq and OIP will notify the submitting
mission or United Nations agency accordingly.
14.
If an item(s) is found ineligible for sale or supply to Iraq or if an
application is considered lapsed, the supplier may submit a new application
based on either a new or an amended contract or donation documentation, and
the new application will be evaluated under the procedures enumerated in
this document and will append the original application (for information
purposes only and to facilitate review).
15.
If an item(s) is substituted for an item(s) that is either found
ineligible for sale or supply to Iraq or is considered lapsed, the new
item(s) will be submitted as a new application under the procedures
enumerated in this document and will append the original application (for
information purposes only and to facilitate review).
16.
Experts from OIP, UNMOVIC and IAEA who evaluate applications should
be drawn from the broadest possible geographical base.
17.
The United Nations Secretariat will report to the 661 Committee at
the end of each phase on the status of all applications submitted during
this period, including contracts recirculated pursuant to paragraph 18
below. The Secretariat will provide to members of the 661 Committee, at
their request, copies of applications approved by OIP, UNMOVIC, and IAEA,
within three working days after their approval, for information purposes
only.
18.
Notwithstanding provisions of paragraph 17 above, all technical
information transmitted to OIP, UNMOVIC and/or IAEA by the submitting
missions or United Nations agency in accordance with these procedures is
totally confidential.
19.
OIP will divide contracts currently on hold into two categories:
category A and category B. Category A will contain contracts on hold that
have been designated by UNMOVIC as containing item(s) on one or more of the
United Nations Security Council resolution 1051 lists. Category A will also
contain contracts that were both processed before the Security Council
adopted United Nations Security Council resolution 1284 and assessed by one
or more members of the 661 Committee as containing item(s) on one or more of
the United Nations Security Council resolution 1051 lists. OIP will consider
contracts in category A to be "returned to the submitting mission or
United Nations agency" and will notify the submitting mission or United
Nations agency accordingly, including national comments if possible. The
submitting mission or United Nations agency may submit a contract in
category A as a new application under the GRL procedures. In category B will
be all other contracts currently on hold. Contracts in category B will be
recirculated by OIP under the GRL procedures. OIP will append the original
committee registration number and national comments, for information
purposes only, to any recirculated contracts. OIP should start this
recirculation procedure within 60 days of adoption of this resolution and
should complete the recirculation process within 60 days thereafter.
20. OIP shall approve humanitarian
consumption rates and use levels for each chemical and medication specified
in items 1, 2, 4, 5 and 8, Chemical Section and item 1 and 4, Biological
Section of Annex A to the resolution. In establishing consumption rates, OIP
shall be guided by information of typical civilian utilization of each item
specified as appropriate for different periods of the year. OIP shall be
guided further by the Council’s central objective to facilitate and
expedite the flow of medicines and medicinal chemicals for the benefit of
the Iraqi people while providing the Council an opportunity to prevent
stockpiling of such items to support military and weapons of mass
destruction/missile applications. Proposed purchases by Iraq of these items
that do not exceed the consumption rates established for each item shall be
approved by the Secretariat; proposed purchases of these items that exceed
the established consumption rates shall be referred to the 661 Committee for
review consistent with these procedures. OIP shall process applications for
these materials in the interim 60-day period prior to the implementation of
this paragraph under the procedures established pursuant to resolution 1409
(2002).
RECONSIDERATION PROCEDURES
If
United Nations technical experts identify GRL or 687 items in an
application, the supplier will be notified of that and may request
reconsideration of that decision before the item(s) is processed further.
This new procedure provides suppliers with several options before the GRL
item(s) is forwarded to the 661 Committee. The details are described in
RECONSIDERATION
PROCEDURES.
AUTHENTICATION AND FUNDING
-
Following approval of items
for export to Iraq in accordance with procedures adopted under
resolution 1409(2002), the Office of Iraq Programme will issue Approval
Letter (O/C Letter). The letter will be issued subject to availability
of funds in the Iraq account.
-
When the parties concerned
have been informed that the exporter is eligible for payment from the
Iraq account, the Central Bank of Iraq will request the bank holding the
Iraq account to open an irrevocable, non-transferable, non-assignable
(except to the supplier's bank for the repayment of financing for the
purchase of the humanitarian supplies) letter of credit for the account
of the Iraqi purchaser in favor of the supplier, which will be available
only at the bank holding the Iraq account, and provide for payment from
the Iraq account. Such requests shall be submitted by the bank holding
the Iraq account to the Secretary-General for expeditious approval, so
that payment from the Iraq account can be made without delay. The letter
of credit will require as condition of payment the submission to the
bank holding the Iraq account of the usual commercial documentation, and
of the following documents: a copy of the Committee's letter stating
that the exporter is eligible for payment from the Iraq account, and a
standardized confirmation by the Secretary-General of the arrival of the
humanitarian supplies in Iraq.
-
The arrival of the
humanitarian supplies in Iraq will be confirmed by independent
inspection agents appointed by the Secretary-General pursuant to
resolution 986 (1995) and stationed at relevant entry points and other
locations in Iraq as referred to in paragraph 26 of the Memorandum of
Understanding. When
necessary, quality tests should be completed within reasonable time
limits. The independent inspection ag ents will add
their authenticated confirmation of arrival to a copy of the Committee's
letter stating that the exporter is eligible for payment from the Iraq
account and to a copy of the invoice, and will inform the
Secretary-General in accordance with paragraph 8 (a) (iii) of Security
Council resolution 986 (1995). This information should be given without
delay and in any case within 24 hours. According to paragraph 10 of the
procedures adopted by resolution 1409 (2002), OIP and the United Nations
Treasury "will inform the banks within five working days that the
items in the application have arrived in Iraq".
-
The inspection agents will
report all irregularities to the Secretary-General and to the Committee.
If the problem is related to normal commercial practice, the Committee
and the Government of Iraq will be informed but normal commercial
resolution practices will go forth. Performance bonds may not be opened.
Payments in favor of the purchaser resulting from normal commercial
resolution practices should be made to the Iraq account. If the matter
is of serious concern, the independent inspection agents will hold the
shipment in question, pending guidance from the Committee. The Committee
will make every effort to provide such guidance in the most expeditious
manner.
-
The bank holding the Iraq
account shall effect payment under any letter of credit only if all
documents stipulated in the letter of credit are presented to it and the
terms and conditions of any such letter of credit are complied with.
When specified in the contract and the supporting documents, payment can
be made in several installments corresponding to actual deliveries to
Iraq. Documentary discrepancies can only be waived by the
Secretary-General.
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