Iraq Will Push UN for End to Payment of Gulf-War Reparations to Kuwait

Iraq said it will step up efforts to be released from the payment of war reparations to Kuwait, imposed by the United Nations Security Council in 1991 in response to the Iraqi invasion of the neighboring country.

“There is coordination between us, the U.S. State Department and allies to create a lobby in the Security Council to end the resolutions” under which the reparations were imposed, Ali al-Dabbagh, the government spokesman, said today in an interview in Abu Dhabi, where he was attending a conference.

Iraq, holder of the world’s third-largest oil reserves, still owes Kuwait about $25 billion for damage caused by the invasion and seven-month occupation by Saddam Hussein’s forces. Iraq sets aside 5 percent of its oil revenue to pay the reparations, imposed under Chapter 7 of the UN Charter.

Kuwait has opposed lifting the requirement, while Iraq argues that it shouldn’t continue to pay for the mistakes of the former regime and needs the money to revive the economy. Tensions flared last year as lower oil prices reduced Iraqi revenue and lawmakers in Baghdad urged their government to stop paying.

Kuwait asked this week for reparations of $1.2 billion from Iraqi Airways, the national carrier, for the alleged theft of 10 airplanes and spare parts during the invasion, the Associated Press reported.

Al-Dabbagh said he is hopeful that Iraq will be released this year from its obligations, while recognizing that efforts to end the payments may be stymied by Kuwait’s opposition and delays in forming a new Iraqi government following parliamentary elections last month.

Seeking Settlement

“We need to reach a settlement with Kuwait,” al-Dabbagh said. “We need to reach an understanding so we can go to the Security Council with a solution.”

Iraq’s ambassador to the UN, Hamid al-Bayati, this month said that if the reparations demand isn’t fully lifted, his country will push for a lowering of payments to 1 percent of Iraqi oil revenue. Iraq’s government suggested in June that Kuwait use the money to invest in Iraq.

The U.S. military pushed Iraqi forces from Kuwait in February 1991 after Hussein invaded in August 1990. The Security Council then imposed sanctions and allowed for military action when Iraq posed a threat to international peace.

U.S. forces returned to Iraq in 2003 to lead an invasion from Kuwaiti territory after the Bush administration claimed Hussein’s regime possessed weapons of mass destruction.

To contact the reporters on this story: Zahraa Alkhlisi in Abu Dhabi at zalkhalisi@bloomberg.net; Caroline Alexander in London at calexander1@bloomberg.net.

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