Chapter 3

Contents

Chapter 5

4 United Nations knowledge of breaches of sanctions: 1999 to 2003

4.1 The United Nations knew that Iraq was breaching sanctions by requiring payment of inland transport fees and surcharges or after-sales-service fees. It knew this between 1999 and 2003, through the Office of the Iraq Programme and the 661 Committee. It took no steps to publicise or warn member states of the Iraqi practices, and it took no steps to stop the practices. The United Nations did not know that AWB was making such payments to Iraq because AWB denied to the United Nations that it was.

4.2 So much is established by the Independent Inquiry Committee into the UN Oil-for-Food Programme in its report dated 7 September 2005 (the Volcker report).[132] It is important when considering the conduct of Australian companies to bear in mind the knowledge of the United Nations, particularly when considering any possible offences by Australian companies in relation to possible deception of the United Nations.

4.3 The Independent Inquiry Committee September report stated:

… By November 2000, Iraq was engaging in a pattern of sanctions breaches that ultimately generated billions of dollars in illegal revenues. The illicit revenues were collected through kickback payments on Programme contracts, surcharge payments on oil purchases, and oil smuggling to neighbouring countries ... With respect to the United Nations Secretariat and OIP … OIP's Executive Director, Benon Sevan, Deputy Secretary-General Louise Fréchette and Secretary-General Kofi Annan each was aware-in varying degrees-of efforts by the Iraqi regime to divert revenues from the Programme. As explained below, their response was inadequate.

Regarding kickbacks on humanitarian contracts, OIP was particularly well-positioned to investigate and understand the true scope of the regime's activities. OIP's customs experts were attuned to the issue and, as much as their resources and expertise would permit, tracked contract irregularities. OIP's sources provided increasingly detailed evidence that the Iraqi regime was engaging in a widespread kickback scheme through which suppliers were required to make payments to the regime, often in amounts representing ten percent or more of the full contract value. Some suppliers and their respective missions, in fact, provided OIP with documents confirming illicit side agreements with the Iraqi regime.

By October 2001, OIP's Chief Customs Expert, Felicity Johnston, was convinced that the Iraqi regime's kickback scheme was occurring 'left, right and center'. She brought her concerns and specific information to the attention of her supervisors at OIP-Farid Zarif, the Director of the Contracts Processing and Monitoring Division ('CPMD'), and Mr. Sevan-and urged them to take action. No meaningful action was taken. Instead, in the face of multiple, documented cases of illicit activity, Mr. Sevan refused to disclose material evidence to the 661 Committee. Mr. Sevan maintained that there was no hard evidence that the kickback scheme existed. For their parts, Deputy Secretary-General Fréchette, S. Iqbal Riza, the former Chef de Cabinet, and Secretary-General Annan were each informed of the kickback issue and received some, but not all, of the documentation and information possessed by OIP regarding the scheme. There is no indication that Deputy Secretary-General Fréchette took any steps or issued any directives to ensure that the Iraqi regime's collection of illicit payments was properly investigated and brought to the attention of the Security Council and the 661 Committee. Secretary-General Annan told the Committee that he gave oral instructions to Mr. Sevan to be transparent with the 661 Committee. He did not, however, confirm that such transparency existed, particularly in connection with the kickback issue. Further, neither Deputy Secretary-General Fréchette nor the Secretary-General addressed the kickback scheme with Iraqi officials, and they made no mention of the scheme in the Secretary-General's 90 and 180-day reports to the Security Council. With little resistance from the Secretariat, the Iraqi regime's kickback scheme continued through the balance of the Programme and undermined the humanitarian effort.[133]

The Secretariat's state of knowledge

4.4 The Independent Inquiry Committee found as follows:

• On 21 December 1999 the Office of the Iraq Programme received a query from the Canadian permanent mission regarding a contract between the Iraqi Ministry of Trade and the Canadian Wheat Board. The OIP was advised that the Iraqi regime was 'requiring CWB to deposit $700,000 in a Jordanian bank account to cover the transportation costs in Iraq'.[134] Mr John Almstrom, Chief of the Contracts Processing Section of the OIP until early 2000 (when he was replaced by Mr Zarif), instructed Ms Johnston to investigate the matter.
  
• Between 21 December 1999 and 13 January 2000 Ms Johnston spoke with the Canadian mission about the matter. The Canadian mission reported that 'similar arrangements had been made by the Iraqi regime with the Australian Wheat Board … and various suppliers from Thailand'.[135] Ms Johnston spoke with the Australian permanent mission and asked it to 'inquire from AWB whether it had agreed to any financial arrangements with the Iraqi regime outside the United Nations escrow account'.[136] Ms Johnston's testimony to the Independent Inquiry Committee was that the Australian mission 'informed her that AWB had "categorically denied" the circumstances set forth in the memorandum'.[137] According to Ms Johnston's knowledge, the matter was not brought to the 661 Committee's attention.
  
• On 10 January 2000 the Austrian permanent mission faxed the Office of the Iraq Programme 'requesting an examination of the business practices of Marquette Hellige Ges.m.b.H. (Marquette)'.[138] The facsimile attached correspondence from Marquette dated 10 December 1999, 'suggesting the existence of side-arrangements'.[139] In essence, Marquette disclosed that it had entered into two 'service undertakings' in connection with the supply of medical products to the Iraqi State Company for Marketing Drugs and Medical Appliances. These undertakings provided that Marquette would pay commissions to a third party it had engaged to act as its agent.[140] The Office of the Iraq Programme did not inform the 661 Committee of the Marquette commission payments.[141]
  
• On 7 February 2000 Mr Almstrom notified his successor, Mr Zarif, of the information provided by the Canadian Wheat Board.[142]
  
• In July 2000 J Christer Elfverson, Director of the Programme Management Division of the Office of the Iraq Programme, was contacted by a representative of Scania CV AB (Scania), a Swedish company, who 'complained about a fifteen percent payment that the Iraqi regime was demanding on a contract'.[143]
  
• On 5 December 2000 Mr Elfverson wrote a note to Mr Sevan 'regarding reports of unauthorized commissions on humanitarian contracts'.[144] Mr Elfverson had been provided with 'detailed information "on the existence and scale of 'back-handers' now routinely being demanded by Iraqi ministries"'.[145] The Independent Inquiry Committee concluded that the note did not appear to have been forwarded to the 661 Committee.[146]
  
• On 11 December 2000 Mr Sevan responded to Mr Elfverson's note of 5 December.[147] He wrote that suppliers who brought this type of information to the attention of the Office of the Iraq Programme should be advised to inform 'their governments who may decide to write to the Security Council Committee established by resolution 661 (1990)'.[148]
  
• At the formal meeting of the 661 Committee held on 13 December 2000 no mention was made of either Mr Elfverson's 5 December note to Mr Sevan or Mr Sevan's reply of 11 December. This was despite the fact that the United Kingdom had asked the Office of the Iraq Programme at that meeting whether it was true that Iraq required 'businesses to pay an "import tax" equal to three percent of the value of the contract as a "precondition to granting … the contract"'.[149]
  
• On 14 February 2001 Mr Sevan sent a note to Under-Secretary Jayanta Dhanapala, attaching briefing papers for the Secretary-General's meetings with the Foreign Minister of Iraq, scheduled for 26 and 27 February 2001.[150] One of the issues addressed was '10 per cent commission on contracts'.[151] Relevantly, the section dealing with commissions stated:

• The notes and summaries of the meetings between the Secretary-General and the Iraqi Foreign Minister 'do not contain any reference to a discussion of kickbacks in connection with the humanitarian contracts'.[153]
  
• On 28 February 2001 the Secretary-General briefed the Security Council on his meetings with the Iraqi Foreign Minister. No reference was made to the 'Iraqi regime's alleged kickback scheme or a discussion of the matter with the Iraqi officials'.[154]
  
• On 2 March 2001 the Secretary-General issued his 90-day report to the Security Council on phase IX of the Oil-for-Food Programme.[155] The report was 'devoid of any reference to the sanctions-busting payments to the Iraqi regime'.[156]
  
• On 7 March 2001 the New York Times published an article entitled 'Iraq is running payoff racket, U.N. aides say'[157], which provided 'a detailed description of the various means and methods employed by the Iraqi regime to perpetrate the kickback scheme'.[158] The article was the subject of an advisory note to Mr Riza, copied to Deputy Secretary-General Fréchette and Mr Fred Eckhard, Spokesperson for the Secretary-General.
  
• On 10 March 2001 Mr Sevan 'issued Mr. Zarif a directive regarding the review process for Programme contracts'.[159]
  
• The Office of the Iraq Programme took a number of 'internal measures to address kickbacks on Programme contracts'.[160] One of those measures was to update its 'Compendium of Customs Procedures'. The following language was added to the compendium:

• The Independent Inquiry Committee's view was that this language 'reflected OIP's knowledge of the kickbacks and recognition of the means of imposition'.[162]
  
• On 22 October 2001 Ms Johnston drafted a 'Note for the file' entitled 'Potential Illicit Payments to the Government of Iraq' (the 'Johnston note').[163] This summarised a 'number of the incidents of kickbacks that had been discovered by or reported to OIP as of October 2001'.[164] The purpose of the Johnston note was to 'summarize the compelling evidence that the scheme existed and present the information to Mr. Zarif and Mr. Sevan to encourage action by the Secretariat'.[165] The note refers to seven incidents that provided evidence of the scheme. Following is a summary, in chronological order, of the portion of the report that deals with the Johnston note:

- On 7 January 2001 Neptune Exports Limited (Neptune), which had contracted with Iraq for the supply of tea, was 'informed by the Iraqi State Company for Food Stuff Trading that there was a delivery shortage of approximately 1220 kilograms of tea'.[166] The Iraqi State Company for Food Stuff Trading 'directed Neptune to pay the equivalent value of tea into a bank account at the Rafidain Bank in Amman, Jordan'.[167] The Indian permanent mission advised the OIP of the request. The 661 Committee was not informed of the incident.[168]

- On 25 February 2001 Woodhouse International LLC (Woodhouse) wrote to the United Arab Emirates Ministry of Foreign Affairs 'regarding a number of its Programme-related contracts for oil spare parts'.[169] The Iraqi Ministry of Oil had instructed Woodhouse to 'include an extra ten percent in the contract price over and above the original tender value' in respect of each of its contracts with the Ministry.[170]

- On 13 March 2001 Ingersoll-Rand World Trade Ltd (Ingersoll-Rand), which had executed two contracts with the Baghdad Mayoralty for rollers, paving equipment and spare parts, 'sent a letter to the Swiss State Secretariat for Economic Affairs indicating that the contract total value "includes 10% working capital to be given as rebate to Baghdad Mayoralty"'.[171]

- On 19 March 2001 Ingersoll-Rand sent a letter to the OIP regarding its second contract with the Baghdad Mayoralty, which 'confirmed that the agreement with the Baghdad Mayoralty included a ten percent cash payment, which the company was told would be used as working capital'.[172]

- In March 2001 the Swiss mission forwarded to the OIP the 'actual side agreements requiring the payment of the ten percent fee'.[173] [original emphasis]

- Ms Johnston's testimony to the Independent Inquiry Committee was that, to her knowledge, the Ingersoll-Rand matter was not brought to the 661 Committee's attention.[174]

- On 3 April 2001 Hajlaoui and Partners (Hajlaoui) 'executed a contract with the Economics and Finance Department of the Ministry of Oil for the supply of tractors'.[175]

- On 11 April 2001 Hajlaoui signed a letter confirming its agreement to 'pay ten percent of the contract value … to the Oil Products Distribution Company, Daura, Baghdad for "installation, technical supervision and the service after sales"'.[176]

- On 25 April 2001 two OIP staff members met with a Woodhouse representative.[177] They were informed that 'suppliers were being forced to sign "side agreements" requiring the increase of the original contract price by ten percent with that difference to be paid to the Iraqi regime'.[178] They were further 'informed that the kickback scheme was extensive and that Woodhouse's understanding was that "all Phase [VIII] and IX oil spares applications required this kind of side agreement"'.[179] [original emphasis]

- On 6 May 2001 Woodhouse wrote to the OIP to 'request a "general letter" outlining the United Nations' position on payments to Iraq so that the position could be forwarded to Iraqi officials'.[180]

- On 15 June 2001 the Belgian permanent mission submitted Hajlaoui's request to ship the goods to Iraq, which attached the 11 April 2001 side letter 'setting forth the terms of the kickback arrangement'[181] between Hajlaoui and the Iraqi Oil Products Distribution Company.

- On 20 July 2001 'Ms Johnston prepared a note entitled "Funds Obtained by the Government of Iraq Outside the Oil for Food Programme" and placed it in the Irregularities File'.[182] This stated that the Iraqi regime 'continue[d] to extract funds from suppliers … by refusing to sign contracts unless a commission of between 10% to 15% [was] paid'.[183] It further stated that such contracts 'contravene[d] paragraph 4 of Security Council resolution 661 (1990)'.[184]

- The 20 July 2001 note stated that 'the Japanese Permanent Mission had informed OIP that Marubeni Heavy Machinery Trading Company (Marubeni) had been requested to pay a fee, equal to ten percent of the total subcontract value, into a bank account designated by an Iraqi company, Upper Gulf Agencies (UGA)'.[185] The fee 'constituted "a commission paid directly to the Government of Iraq"'.[186] The OIP advised the Japanese mission to raise the matter directly with the 661 Committee or with Mr Sevan, 'requesting that he raise the issue with the 661 Committee'.[187]

- On or about 9 August 2001 Mr Sevan asked the UN Office of Legal Affairs 'whether the subcontracting agreements mentioned [by the Japanese mission] … constitute[d] a breach of Security Council resolutions regarding the situation between Iraq and Kuwait'.[188]

- Between September and November 2001 the OIP corresponded with Hajlaoui about the side letter of 11 April 2001.

- On 4 September 2001 Mr Zarif drafted a memorandum to Mr Sevan regarding the Marubeni matter.

- On 5 September 2001 the OIP advised Hajlaoui and the Belgian mission that it could not process the request to ship the goods to Iraq because 'the customs experts were unable to determine compliance with the United Nations requirements'.[189] It requested further information and asked Hajlaoui to 'confirm its understanding that all payments to the Iraqi regime must be remitted to the United Nations escrow account and that failure to do so violated the relevant Security Council resolutions'.[190]

- On 8 September 2001 Woodhouse wrote another letter to the OIP, informing it that 'the Iraq authorities are insisting in a number of cases for this extra 10% to be added to the contract value'.[191] [original emphasis]

- On 19 September 2001 Hajlaoui responded to the OIP's letter of 5 September 2001. It denied that the side letter had been executed and confirmed that that 'all payments were to be made into the United Nations escrow account, and noting that a failure to do so was a violation of Security Council resolutions'.[192]

- On 21 September 2001 the Office of Legal Affairs responded to Mr Sevan's note of 9 August 2001, advising:

… while the 661 Committee did not normally need to approve subcontracts, the Marubeni case was different because the subcontract involved the payment of a fee in connection with a 'service agreement' to an Iraqi company outside the United Nations escrow account. OLA stated that absent explicit approval by the 661 Committee the 'service agreement' would violate the sanctions regime. OLA recommended to Mr Sevan that the 'situation be brought to the attention of the 661 Committee as soon as possible'.[193] [original emphasis]

- IIC investigators did not locate 'any evidence that would indicate that Mr. Sevan complied with OLA's advice that the "situation be brought to the attention of the 661 Committee as soon as possible"'.[194]

- On 25 September 2001 Ms Johnston prepared a file note in relation to a contract between Belhasa Motors Co. LLC (Belhasa) and the Iraqi State Company for Water Transport.[195] The contract included an undertaking that Belhasa 'would pay the Iraqi State Company for Water Transport 1,436,640 Japanese yen, representing approximately ten percent of the contract value'.[196] The amount was to be deposited into the Rafidain Bank in Amman, Jordan.[197]

- On 30 September 2001 'Belhasa admitted to OIP that it had signed the undertaking'.[198]

- The Belhasa contract was subsequently forwarded to the 661 Committee with a customs report that mentioned the undertaking.[199] A subsequent note of Ms Johnston indicated that the Belhasa contract had been 'placed on hold on October 12, 2001'.[200] The Belhasa contract was not executed.[201]

- Ms Johnston's testimony to the Independent Inquiry Committee was that, apart from the reference to the undertaking in the customs report that was submitted along with the Belhasa contract to the 661 Committee, the Belhasa matter was not raised with the 661 Committee by either Mr Sevan or Mr Zarif.[202]

- Also in September 2001, Safmarine Container Lines NV (Safmarine) advised the Belgian permanent mission that 'shippers were being required to pay a 10% tax, prior to unloading cargo, for all contracts approved during Phases VIII and IX'.[203] [original emphasis] The Belgian mission brought the Safmarine matter to the attention of the OIP. The note stated that '[the] "tax" was payable to the Iraqi State Company for Water Transport or Alia Transportation Company and that vessels were not allowed to unload until the fees were paid'.[204]

- On 22 October 2001 Ms Johnston replied to the Belgian mission, stating her 'understanding that Mr Sevan had written to the Government of Iraq outlining the cases [of potentially illicit payments of which the OIP was aware] and that any response from the Iraqi regime would be forwarded to the 661 Committee'.[205] The Independent Inquiry Committee concluded that it did not 'appear that the 661 Committee was informed of any of the information provided by Safmarine'.[206]

- On 20 November 2001 the Belgian mission wrote to the OIP, indicating that 'Safmarine had reported that "shippers [were] still paying the after sales tax for shipments from Dubai to Umm Qasr and containers [were] refused when proof of this payment [was] missing"'.[207]

- On 26 November 2001 the Belgian mission sent another letter to the OIP, 'enclosing copies of communications from Safmarine, which explained that shipments of containers from a number of Belgian companies had been blocked because an "after sales tax" of ten percent of the total contract value had not been paid'.[208] One of the attachments 'reported that for Phases VIII and IX an "after sales service payment" [was] applicable for all shipments to Iraq. This tax [was] about 10% of the value of the cargo'.[209] [original emphasis]

- On 18 December 2001 the OIP prepared a customs report on the Hajlaoui contract for submission to the 661 Committee. 'The report noted that OIP was "not able to approve the application, and it [wa]s circulated to the [661] Committee for their consideration".'[210]

- On 11 March 2002 the 661 Committee approved the Hajlaoui contract.

• On the basis of the various matters in the Johnston note, the Independent Inquiry Committee concluded:

• The committee further concluded:

• On 22 October 2001 a letter was drafted to Ambassador Al-Douri, Iraq's Permanent Representative to the United Nations. The letter stated that the 'OIP's contacts had "effectively confirmed the initial suspicion of a fraudulent practice"'.[213] [original emphasis] Further:

• The letter stated that 'Mr. Sevan was "duty bound to bring the matter to the attention of the [661 Committee]'".[215] [original emphasis] The Independent Inquiry Committee concluded that the letter of 22 October 2001 'appears to be a draft that Mr. Sevan reviewed, but never sent'.[216]
  
• In November 2001 a second letter was drafted to the Iraqi Ambassador. It stated that 'Mr. Sevan had "been informed by the Permanent Mission of Belgium to the United Nations that suppliers shipping approved goods to Iraq via the port of Umm Qasr are currently required to pay a 10 per cent tax [to Iraqi controlled entities] … for all contracts approved under phases VIII and IX"'.[217] The letter emphasised that such payments were 'clearly contrary to the spirit of paragraph 4 of Security Council resolution 661 (1990)'.[218]
  
• The Independent Inquiry Committee concluded that the letter of November 2001 had not been sent.[219]
  
• On 4 November 2001 Mr Sevan drafted a note to Deputy Secretary-General Fréchette that was identical to the Johnston note of 22 October 2001. With a 'few notable exceptions', the note reflected a 'softening of the information assembled by the customs experts'.[220] It was unclear whether Deputy Secretary-General Fréchette received the note. When asked by the IIC whether she had received it, she could 'neither confirm nor deny' receiving it.[221]
  
• On 14 November 2001 Entreprise Nationale de Tubes et Transformation de Produits Plat Anabib (Anabib) 'submitted a contract for the sale of galvanized steel pipes to the Iraqi State Trading Company for Construction Materials, which required Anabib to pay ten percent of the contract price … to the Iraqi regime'.[222]
  
• On 19 November 2001 the Secretary-General submitted to the Security Council a report on implementation of the Oil-for-Food Programme, in accordance with the Secretariat's obligations under the relevant Security Council resolutions.[223] The report 'made no mention of the kickback issue'.[224] The Independent Inquiry Committee:

- reviewed all of the 90 and 180-day reports from the Secretary-General to the Security Council submitted after December 2000, when the kickback issue began to escalate, until the removal of the previous Iraqi regime and has not located any evidence that the Secretariat raised the issue of kickbacks, or conferred the information it possessed in such reports.[225]

• On 30 November 2001 the OIP wrote to the Algerian permanent mission about the Anabib contract. It informed the mission that the 'repatriation of any sum of money to Iraq "would clearly contravene" Security Council resolutions 661 and 986'.[226]
  
• On 4 December 2001 the Algerian mission responded to the OIP's letter of 30 November 2001. The mission had 'confirmed with Anabib that "there [wa]s no payment to be repatriated to the Iraqi Government or to any Iraqi company" and the table, which was "enclosed inadvertently", should be disregarded and sent back to the Mission'.[227]
  
• On 7 December 2001 a customs report about the Anabib contract was circulated to the 661 Committee. It 'noted that "a recapitulation table of the prices of the goods [was] attached to the contract" and that all the prices had "been increased by 10% and that this amount will be repatriated to the G.O.I"'.[228]
  
• On 11 December 2001 the 661 Committee approved the Anabib contract.
  
• On 24 January 2002 the Spanish permanent mission forwarded a copy of correspondence it had received from Laiex SL (Laiex) regarding 'the payment of ten percent of the contract value to its Iraqi customer'.[229] The Independent Inquiry Committee concluded that it did not 'appear that the 661 Committee was notified' of this.[230]
  
• On 19 March 2002 the Danish mission to the United Nations wrote to the OIP, explaining that Oticon A/S was 'required to pay an "after sales tax" to the Iraqi regime; otherwise the shipment would be rejected'. The Independent Inquiry Committee concluded that it did not 'appear that the 661 Committee was notified of this'.[231]
  
• On 26 March 2003 Capex Spain (Capex) forwarded documents to the Spanish mission regarding its contract with the Iraqi Ministry of Oil.[232] The documents were subsequently forwarded to the OIP. Capex had paid a kickback but, because it did not have a receipt for the payment, 'the Iraqi officials blocked shipment of the goods in Basrah'.[233] Capex requested the Spanish mission's assistance and 'furnished documentation … showing that it had paid a kickback'.[234]
  
• On 25 April 2003 the OIP wrote to the Spanish mission, 'explaining that OIP could not assist Capex in their efforts to ship the goods, because the "payment to an Iraqi Government entity constitute[d] a breach of the sanctions [regime]"'.[235]

• '[M]edia reports of improprieties regarding humanitarian contracts under the Programme surfaced as early as November 1997 and then more broadly in August and November 1999.'[236] Reports resurfaced in February and March 2001.[237]
  
• On 24 March 2000 'the United States raised numerous concerns in the Security Council about the Government of Iraq's conduct relating to humanitarian aspects of the Programme'.[238] In part, the United States asserted that 'the establishment of front companies, the payment of kickbacks to manipulate and gain from the oil-for-food contracts-these and other practices are well documented. Such abuses ebb and flow at the whim of Iraq's leadership'.[239] [original emphasis] The Independent Inquiry Committee's report stated, however, 'Although the United States noted its view that these practices were "well documented", no evidence suggests that humanitarian kickbacks had been discussed at any previous meeting of the Security Council or its 661 Committee'.[240]
  
• In November 2000 France learned that 'the Iraqi Minister of Trade, Medhi Saleh, openly had requested at a Baghdad trade fair that companies selling humanitarian goods to Iraq under the Programme … pay ten percent kickbacks to Iraqi bank accounts in Jordan, the United Arab Emirates and other countries'. France advised the Minister that such payments would be contrary to the sanctions regime and warned French exhibitors against the Iraqi request.[241]
  
• On 13 December 2000 the 661 Committee first addressed the 'issue of humanitarian kickbacks' at a formal meeting.[242] At the meeting the United Kingdom reported that 'it had heard that the Government of Iraq "asked businesses to pay an import tax amounting to 3 per cent of the value of the contract, ostensibly to pay for storage and distribution costs, as a precondition to granting them the contract"'.[243]
  
• On 18 January 2001 the United Kingdom suggested at a formal meeting of the 661 Committee that the committee 'consider allegations that Iraq was "deduct[ing] a 10 per cent commission on contracts"'.[244]
  
• On 1 February 2001, at an informal meeting of the 661 Committee, the 'United States asked OIP what information it possessed regarding allegations that Iraq had been demanding a ten percent kickback for awarding contracts to particular humanitarian goods suppliers'.[245] Mr Farid Zarif, Director of the Contracts Processing and Monitoring Division of the OIP, responded that the 'OIP had received no formal complaints from any permanent or observer mission in that regard'.[246]
  
• On 13 February 2001, at an informal meeting of the 661 Committee, the 'United Kingdom invited OIP to draft and circulate a paper addressing whether Iraq in fact was seeking humanitarian kickbacks from firms supplying humanitarian goods through the Programme'.[247] The OIP agreed that it 'would look into providing what very little information existed on the "commission question"'.[248] The United States added that it would 'recommend that the 661 Committee adopt several proposals, including a number addressing the alleged humanitarian kickbacks. These measures included: (1) sending letters asking the missions to instruct suppliers not to pay any humanitarian kickbacks; (2) noting this prohibition in the 661 Committee's approval letters; and (3) issuing a related press release'.[249]
  
• In March 2001 the United States 'introduced a draft non-paper, with United Kingdom support, containing four interrelated proposals for combating kickbacks'.[250] The draft non-paper included each of the proposals just outlined as well as a proposal that the 'OIP explain in its Programme briefings to member states that humanitarian kickbacks are prohibited and also that OIP's website similarly underscore this prohibition'.[251]
  
• The United States' proposals were not adopted.[252]
  
• On 1 March 2001, at a formal meeting of the 661 Committee, 'the United Kingdom requested an update on the report previously requested from OIP regarding the estimated ten to twenty-five percent commissions that Iraq allegedly had been seeking from humanitarian goods suppliers'.[253] The OIP advised that it 'had not received any "formal, official report of such commissions"'.[254]
  
• The Independent Inquiry Committee reviewed the United Nations' records relating to the Oil-for-Food Programme and was 'unaware of any document suggesting that OIP prepared the written report on the kickbacks scheme' as requested.[255]
  
• The committee expressed the view that 'the comments made by the OIP representatives at these 661 Committee meetings reflect a conscious decision to limit the amount of knowledge shared with the 661 Committee'.[256]
  
• On 7 March 2001 the Chairman of the 661 Committee, Ole Peter Kolby of Norway, told CNN:

• On 16 March 2001 'there was a discussion of the allegations that Iraq was demanding commission payments for Programme contracts' at an informal meeting of the 661 Committee.[260] The meeting notes 'do not reflect any contribution by Mr. Zarif to inform the 661 Committee of OIP's knowledge'.[261]
  
• On 5 April 2001 port fees were discussed at a formal meeting of the 661 Committee. This was the last 'mention of humanitarian kickbacks at a formal 661 Committee meeting, before the war'.[262]
  
• On 9 April 2001 a UK official sent the OIP a letter 'identifying fifteen humanitarian applications that included "unusual payment/service clauses that could mask payments of commission to Iraq"'.[263] It had not placed holds on these contracts because of humanitarian concerns. However, it 'indicated that it was not "keen to let Iraq get away with blatant and profitable manipulation of the [Programme] to obtain hard currency outside UN control"'.[264] The United Kingdom reiterated its request that the OIP 'brief the 661 Committee on humanitarian kickbacks'.[265]

• Iraq asked many major companies from many countries to pay commissions, surcharges or after-sales-service fees or to inflate prices.
  
• Many major companies approached their national governments, advising them of these requests, and sought guidance on whether such payments infringed UN sanctions.
  
• The Secretariat of the United Nations had considerable information about attempts by Iraq to circumvent sanctions and acquire hard currency outside the Oil-for-Food Programme.
  
• Iraq 's circumvention of the Oil-for-Food Programme was raised frequently within the 661 Committee between March 2000 and April 2001, but the 661 Committee did nothing to stop the practice or advise member states or suppliers to Iraq of the existence of Iraq's demands and that such demands infringed UN sanctions.