Iraq halts oil-for-food programme

Baghdad, he said, also had decided not to sign a new agreement with the United Nations governing the oil-for-food programme that began in December 1996.

The programme, which Iraq says just prolong the nine-year old UN sanctions, allows Baghdad to sell 5.26 billion dollars in oil every six months to buy food, medicine and other goods for ordinary Iraqis.

It is meant to ease the impact of the trade sanctions, imposed after Baghdad8217;s troops invaded Kuwait in August 1990.

However, Eckhard said that UN humanitarian staff would continue working normally in Iraq until Secretary-General Kofi Annan received Baghdad8217;s decisionin writing.

8220;There are an awful lot of supplies in the pipeline so our work doesn8217;t need to stop just because the oil stopped flowing,8221; Eckhard said.

8220;Our hope is that this can eventually be worked out and they will continue the oil-for-food programme,8221; he said.

Iraq8217;s UN Ambassador, Saeed Hasan informed the United Nations of Baghdad8217;s decision on Saturday by leaving a voice mail on the home telephone of the chief UN legal counsel.

On Monday, Hasan told Reuters that no written notification was planned and he would speak to UN officials in charge of the programme directly.

The United Nations has several hundred staff in Iraq supervising the programme. Their operations are covered by a 8220;Memorandum of Understanding,8221; which Iraq has refused to sign.

8220;They UN officials requested for us to sign the extension of the Memorandum of Understanding until December 4,8221; Hasan said. 8220;We will not cooperate in this extension. It is meaningless.8221;

Eckhard said humanitarian supplies were continuing toarrive normally, and Hasan confirmed this was the case. Iraq had contracted for some 2 billion dollars worth of goods and equipment that had not arrived. In addition, he said there was another 2 billion dollars of Iraq8217;s oil revenues in a UN escrow account.

Iraq objected to the UN Security Council8217;s short two-week extension to the oil-for-food plan on Friday, following a dispute between the United States and Russia. The stop gap measure was because Washington wanted to renew the programme on the same terms as previous while Russia wanted improvements, such as 600 million dollars in oil industry spare parts.

8220;We wouldn8217;t be able to support a resolution which 8230; does not introduce any improvements in the humanitarian programme,8221; Russia8217;s UN ambassador Sergei Lavrov said.

He also told reporters Iraq had been considering cutting back oil production because of its deteriorating infrastructure and lack of spare parts for its oil industry. To avoid further damage, he said, Iraq was 8220;planning to pump lessand less.8221;