The Oil-for-Food Programme, established by the United Nations in 1995 (under UN Security Council Resolution 986) and terminated in late 2003, was intended to allow Iraq to sell oil on the world market in exchange for food, medicine, and other humanitarian needs for ordinary Iraqi citizens without allowing Iraq to rebuild its military.
The programme was introduced by the US Clinton Administration in 1995, as a response to arguments that ordinary Iraqi citizens were inordinately affected by the international economic sanctions aimed at the demilitarisation of Saddam Hussein's Iraq, imposed in the wake of the first Gulf War.
UN Resolution 706 of 15 August 1991 was introduced to allow the sale of Iraqi oil in exchange for food.
UN Resolution 712 of 19 September 1991 confirmed that Iraq could sell up to $1.6 billion US in oil to fund an Oil For Food program.
After an initial refusal, Iraq signed a Memorandum of Understanding (MOU) in May 1996 for arrangements for the implementation of that resolution to be taken.
Over US$65 billion worth of Iraqi oil were sold on the world market. About US$46 billion of these funds were intended to provide for the humanitarian needs of Iraqi people such as food and medicine in the context of international economic sanctions. A considerable amount was spent for Gulf War reparations through a compensation fund (25 percent since December 2000); UN administrative and operational costs for the program (2.2 percent) and costs for the weapons inspection programme.
On 22 May 2003, UN Security Council Resolution 1483 granted authority to the Coalition Provisional Authority to use Iraq's oil revenue. The Programme's remaining funds of $10 billion were transferred over a 6 month winding-up period to the Development Fund for Iraq under the Coalition Provisional Authority's control; this represented 14% of the Programme's total income over 5 years.
The programme was formally terminated on 21 November 2003 and its major functions...