H.Doc.108-24 PERIODIC REPORT ON THE NATIONAL EMERGENCY WITH RESPECT TO TERRORISTS ...

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role, and to maximize the contributions of Non-Governmental 
Organizations, international organizations, and other members 
of the international community to these activities, as 
appropriate. The U.S. is fully committed to stay as long as 
necessary to fulfill these responsibilities, but is equally 
committed to leave as soon as the Iraqi people are in a 
position to carry out these responsibilities themselves.
    Should there be a conflict with Iraq, there is a potential 
for adverse humanitarian consequences. The nature and 
significance of such consequences depend in large measure on 
the conduct of the Iraqi regime, which has in the past attacked 
its own people with chemical weapons. The United States is now 
engaging in contingency planning for humanitarian operations 
involving USAID, the Department of State, and numerous other 
United States Government agencies to assist those driven from 
their homes and to minimize disruption and damage to existing 
humanitarian infrastructure.
    In an immediate post-conflict environment, the United 
States, with its coalition partners, would seek to help the 
Iraqi people to begin the reconstruction of their country. We 
are planning for this reconstruction to begin as quickly as 
possible, and to demonstrate to the Iraqi people an immediate 
improvement in their lives and the promise of a brighter post-
Saddam future.
    In addition, we have formed a ``Future of Iraq'' project, 
which helps expatriate Iraqis address post-regime change issues 
such as transitional justice, public health, democratic 
principles, public finance, education, environment and water, 
and the role of the military, free press, and civil society in 
a democratic Iraq. This program has made considerable progress, 
establishing several working groups to address these issues and 
many others. These working groups utilize the talents and 
experience of Iraqis living throughout the world and engaged in 
many fields of endeavor who wish to contribute to the 
restoration of the country in which they were born.
    The United States is committed to working with the 
international community and Iraqis dedicated to building a 
broad-based, democratically-oriented government that respects 
the rights of its people, regardless of gender, ethnicity or 
religion, and which is committed to ensuring Iraq becomes a 
country at peace within itself, seeking peace with its 
neighbors, and respectful of its international 
responsibilities.

Operation NORTHERN WATCH and Operation SOUTHERN WATCH

    Aircraft of the United States and coalition partners 
patrolling the No-Fly Zones over Iraq under Operations NORTHERN 
WATCH and SOUTHERN WATCH are routinely tracked by Iraqi radar, 
fired upon by anti-aircraft artillery, and attacked with 
surface-to-air missiles. Hostile Iraqi actions against United 
States and United Kingdom aircraft continued after November 8 
despite the passage of UNSC resolution 1441. Our aircrews will 
continue to respond in self-defense to threats against and 
attacks on our aircraft patrolling the No-Fly Zones. If Iraq 
were to cease its attacks on and threats to coalition aircraft, 
there would be no need for responses in self-defense by 
coalition forces.

Maritime Intercept Operations

    The U.S.-led maritime Multinational Interception Force 
(MIF) continues to enforce U.N. sanctions in the Gulf. The 
United States continues to approach potential participants in 
the MIF to augment current partners. Canadian, Australian, and 
British forces are currently operating with U.S. forces.
    In large part, member states of the Gulf Cooperation 
Council (GCC) continue to support the MIF. The United Arab 
Emirates and Kuwait accept the vast majority of vessels 
diverted for violating U.N. sanctions against Iraq. Kuwait has 
also increased its ability to offload smuggled oil from 
smuggling vessels by contracting a bunkering tanker, further 
indicative of its continued support. Oman accepts the 
infrequent vessels diverted off its coasts. Other GCC nations 
are more hesitant to accept diverted vessels, but all provide 
support in some form to the enforcement of UNSC resolutions 
against Iraq.
    Monthly totals of smuggled petroleum products through the 
Gulf are declining. Indicative of this fact is the dramatic 
decrease in the amount of illegal oil loaded in Khawr az Zubayr 
onto smuggling vessels. Overall, loading in 2002 when compared 
to 2001 was down 55 percent. This significant downward trend 
indicates a declining willingness of smugglers to invest in 
this trade and represents a critical measure of MIF 
effectiveness.
    The MIF continues to serve as a critical deterrent to the 
smuggling of prohibited items and products into and out of 
Iraq. We will continue to reassess the adequacy of MIF force 
levels as conditions develop.

Dual-Use Items

    On May 14, 2002, the UNSC voted unanimously to adopt a new 
export control system on Iraq. Resolution 1409, and the ``Goods 
Review List'' (GRL) it establishes, are the centerpiece of the 
U.N. effort to revise U.N. sanctions against Iraq. The 
resolution has two critical elements: (1) It makes clear that 
there is no change in the prohibition on providing to Iraq 
weapons or the means to produce them, and clearly restates that 
Iraq has not met its obligations and must not be allowed to 
rearm; and (2) It effectively lifts U.N. controls on purely 
civilian goods, and focuses U.N. controls on items Iraq could 
use to rearm. UNMOVIC and the IAEA, the two U.N. inspection 
bodies already assigned to monitor Iraq, use the GRL to examine 
proposed exports to Iraq. They examine all purchase contracts 
to see if they contain GRL items, and advise the U.N. Office of 
Iraq Programs (OIP) accordingly. UNMOVIC and the IAEA have the 
authority to approve all non-GRL items, and forward to the U.N. 
Sanctions Committee for further review and prompt approval or 
denial all items that they deem to be covered by the GRL.
    While the GRL improved the movement of humanitarian goods, 
it became clear that Baghdad has found and continues to exploit 
weaknesses in the list. Accordingly, in considering the renewal 
of the OFF program in the Security Council in November and 
early December, the United States sought changes and was 
working to address key deficiencies in the GRL as of the date 
of this report. We will continue to monitor and to prevent 
intensive Iraqi efforts to circumvent the list in order to 
obtain dual-use items to support prohibited weapons programs.

The U.N.'s ``Oil-for-Food'' Program

    We continue to support the international community's 
efforts to provide for the humanitarian needs of the Iraqi 
people through the OFF program. Under U.N. control, the 
proceeds of Iraqi oil sales are used to purchase humanitarian 
goods and maintain oil infrastructure, to fund U.N. 
Compensation Commission awards against Iraq arising out of its 
invasion and occupation of Kuwait, and to meet U.N. 
administrative costs. From the inception of the program in 1996 
through December 4, 2002, revenue from oil sales totaled 
roughly $60 billion. During the most recent accounting period, 
May 30 to December 4, Iraq exported $5.64 billion worth of oil, 
according to U.N. data.
    According to U.N. data from the inception of the OFF 
program through December 4, 2002, contracts for humanitarian 
goods worth over $40.3 billion have been approved.
    The OFF program maintains a separate program for northern 
Iraq, administered directly by the U.N. in consultation with 
the local authorities, and funded by 13 percent of OFF oil 
sales proceeds, which are set aside for the three governates of 
northern Iraq.
    Humanitarian efforts in northern Iraq have led to a marked 
contrast between the health of the population of the north, 
where indicators show a vast improvement, and of the population 
living in the areas where the U.N. does not administer the 
program.
    As noted by the U.N. in a September 25, 2002 report, the 
Government of Iraq is not committed to using all the funds 
available through OFF to improve the health and welfare of the 
Iraqi people. The U.N. report cites the Iraqi Government's 
failure to purchase humanitarian goods worth $1.76 billion from 
the available funds in the U.N.'s escrow account. Iraq's month-
long unilateral cut-off of oil exports in April 2002, which it 
attributed to its support for the Palestinians' political 
cause, is the latest in a series of political moves that affect 
principally the Iraqi people. Baghdad's periodic oil cut-offs, 
its smuggling outside OFF and its demand for illegal surcharges 
all negatively affect funding of the OFF program. In addition, 
Iraqi contracting delays, cuts in food, medicine, educational 
and other humanitarian sector allocations, government attempts 
to impede or shut down humanitarian Non-Governmental 
Organizations (NGO) operations in northern Iraq, and Baghdad's 
delays in the issuance of visas for U.N. personnel reveal the 
Iraqi regime's attempts to undermine the effectiveness of the 
OFF program.
    Although the OFF program is designated for humanitarian 
purposes only, we remain concerned that Iraq is abusing this 
program in an attempt to acquire goods and materials for its 
prohibited weapons programs. On March 6, 2002, the United 
States briefed the U.N. Sanctions Committee on Iraq's diversion 
of trucks designated for humanitarian useto its military 
programs. We will continue to work with the U.N. Secretariat, other 
members of the Security Council, and others in the international 
community to ensure that the implementation of UNSC resolution 1284, 
and other relevant UNSC resolutions, better meets the humanitarian 
needs of the Iraqi people while denying political or military benefits 
to the Baghdad regime.

Flight Control Regime

    UNSC resolutions are open to competing interpretations 
regarding international flights to Baghdad. The UNSC has so far 
unsuccessfully attempted to reach a consensus on new procedures 
for international flights. In the absence of an agreement, we 
continue to press for adherence to existing Sanctions Committee 
procedures that allow for Committee approval of flights with a 
demonstrable humanitarian purpose. The majority of 
international flights to Iraq in the past year have operated in 
compliance with UNSC procedures.

Northern Iraq: Kurdish Reconciliation

    The Kurdistan Democratic Party and the Patriotic Union of 
Kurdistan continue their efforts to implement the September 17, 
1998, reconciliation agreement (the ``Washington Agreement''). 
They work together effectively in a number of areas, including 
joint efforts to bring the needs of their region to the 
attention of the U.N. and the international community, and 
within the larger Iraqi national democratic opposition 
movement. On October 4, they convened the first joint session 
of their regional assembly since 1994.

The Human Rights Situation in Iraq

    The human rights situation in Iraq continues to fall 
severely short of international norms. UNSC resolution 688 
expressly notes that the consequences of the regime's 
repression of the civilian population in many parts of Iraq 
constitute a threat to international peace and security in the 
region. It also demands immediate access by international 
humanitarian aid organizations to all Iraqis in need in all 
parts of Iraq. Yet, the Iraqi regime has allowed only one brief 
visit by the U.N. Human Rights Commission's Special Rapporteur 
for Iraq. U.N. human rights monitors have never been allowed 
in. On April 18, 2001, the United Nations Commission on Human 
Rights strongly condemned ``the systematic, widespread and 
extremely grave violations of human rights and of international 
humanitarian law by the Government of Iraq, resulting in an 
all-pervasive repression and oppression sustained by broad-
based discrimination and widespread terror.''
    Human rights NGOs and other interested voices continue to 
call for creation of an international tribunal to address the 
war crimes and crimes against humanity of the Iraqi leadership. 
There are a number of possible mechanisms that might be 
appropriate, and the international community, the military 
coalition in case of war, and the Iraqi people must address 
these issues as soon as hostilities come to an end.
    In the north, outside the Kurdish-controlled areas, we 
continue to receive reports that the Iraqi regime maintains its 
ethnic cleansing policy by forcibly expelling ethnic Kurds and 
Turkomans from Kirkuk and other cities, and transferring Arabs 
into their places. Additionally, Saddam's security apparatus 
continues to repress Shias throughout the country.

The United Nations Compensation Commission

    The United Nations Compensation Commission (UNCC) was 
established by and operates pursuant to UNSC Resolutions 687 
(1991) and 692 (1991). It continues to process claims and pay 
compensation for losses and damages suffered by individuals, 
corporations, governments and international organizations, as a 
direct result of Iraq's unlawful invasion and occupation of 
Kuwait. As of 12 December, the UNCC has issued approximately 
2.6 million awards worth about $43.7 billion, and has already 
paid over $16 billion of those awards. Of the former amount, 
U.S. claimants have been awarded approximately $700 million, of 
which approximately $250 million has already been paid. Awards 
and the costs of the UNCC's operation are paid from the 
Compensation Fund, which is funded through the allocation to it 
of 25 percent (reduced from 30 percent originally) of the 
proceeds from authorized Iraqi oil sales under UNSC resolution 
986 (1995) and subsequent extension.

                               CONCLUSION

    Iraq remains a serious and growing threat to international 
peace and security. For more than a decade, the Iraqi regime 
has deceived and defied the will of the international community 
and numerous UNSC resolutions by, among other things, 
continuing to seek and develop WMD and prohibited long-range 
missiles, brutalizing the Iraqi people, supporting 
international terrorism, and committing gross human rights 
violations. The United States has participated in international 
efforts at containment, sanctions, inspections, and selected 
military action against Iraq, and, despite these measures, Iraq 
continues to violate its international obligations. As 
President Bush stated in his October 7th speech, ``the time for 
denying, deceiving and delaying has come to an end. Saddam 
Hussein must disarm himself, or, for the sake of peace, we will 
lead a coalition to disarm him.'' As the President stated to 
the United Nations General Assembly on September 12, ``The 
Security Council resolutions will be enforced--the just demands 
of peace and security will be met--or action will be 
unavoidable. And a regime that has lost its legitimacy will 
also lose its power.''

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