United States: UN and U.S. Economic Sanctions Against Iraq Lifted
Last Updated: May 27 2003

Consistent with last Thursday's UN Security Council Resolution lifting multilateral economic sanctions against Iraq, the Treasury Department's Office of Foreign Assets Control ("OFAC") has issued a general license on Friday 23, May, 2003 that lifts most of the U.S. economic sanctions against Iraq. That general license is effective immediately.

United Nations:

On Thursday, May 22, the UN Security Council (by a 14-0 vote, with Syria absent) adopted a resolution removing all trade, financial and economic sanctions against that nation established by prior UN resolutions, with the exception of prohibitions related to the sale or supply of arms to Iraq.

The resolution also contains a number of provisions relating to the governance of Iraq and the continuation of funding for reconstruction efforts:

  • The resolution recognizes the United States and the United Kingdom as "occupying powers" under unified command in Iraq (the "Authority") and specific authorities, obligations and responsibilities available to this entity under applicable international law. It supports the formation of an Iraqi interim administration (IIA) as a transitional administration run by Iraqis until an internationally recognized, representative government is established by the people of Iraq and assumes the responsibilities of the Authority. A UN Special Representative will also have a role in the coordination of humanitarian and reconstruction activities by UN agencies, relief organizations, and other international organizations.
  • The resolution establishes a new Development Fund for Iraq (DFI) to be held at the Central Bank of Iraq and notes that revenues from the Fund shall be dispersed at the direction of the Authority, in consultation with the IIA, to meet the humanitarian needs of the Iraqi people, to provide for the economic reconstruction and repair of Iraq's infrastructure, to continue disarmament activities, for the costs of civil administration and for other purposes.
  • The resolution calls for the orderly phase-out of the Secretary General's responsibilities under Security Council resolutions 1472 and 1476 over a six-month period and termination over this period of the Oil for Food Program. It also requests that the UN transfer $1 billion (US) to the DFI as soon as possible, calls upon international financial institutions to assist in the reconstruction and development of Iraq, and welcomes creditors to seek a solution to Iraq's debt problems.
  • With respect to oil and gas sales, the resolution calls for all export transactions to be made consistent with prevailing international market best practices with all revenues -except for a 5% set aside to be made available to a specially earmarked Compensation Fund - deposited into the DFI until an internationally recognized representative government in Iraq is properly constituted. The resolution also stipulates that until December 31, 2007 (unless the Council decides otherwise) petroleum, petroleum products and natural gas originating in Iraq shall be immune to legal challenges and claims, except for environmental damages resulting from ecological accidents, including oil spills.

U.S. Government Measures:

Effective today, Friday, May 23, 2003, OFAC has issued a general license authorizing virtually all prospective transactions involving Iraq. U.S. persons are thus authorized to engage in commercial activities in Iraq, including investment in Iraq and the provision of goods and services, although controls continue to exist in the following areas:

Exports and re-exports of U.S.-origin goods: Goods or technology that are controlled to Iraq for export or re-export under the current Export Administration Regulations must still be licensed by OFAC. It is expected that this licensing jurisdiction will shortly be transferred back to the Commerce Department's Bureau of Industrial Security, which is in turn expected to publish regulations as early as next week that set forth amended licensing requirements for exports and re-exports to Iraq. It is reportedly anticipated that the export controls will be liberalized.

The general license also does not eliminate the requirement to comply with State Department's International Traffic in Arms Regulations, which control the export and re-export of defense articles and associated technical data and defense services. These restrictions remain unchanged.

Blocked Property: All property and interests in property that were blocked under the Iraqi Sanctions Regulations continues to be blocked.

Transaction with certain Designated Persons Prohibited: Transactions are prohibited with persons on the Defense Department's watch list, other persons to be designated by the UN's 661 Committee, and any persons currently designated on OFAC's "specially designated nationals" list.


The V&E Task Force on Iraq

To assist our clients in receiving updates on this situation and in understanding these developments, Vinson & Elkins has formed a Task Force on Iraq. The Task Force includes lawyers in our Middle East Energy, Infrastructure and Transactional Practice, Export Controls and Economic Sanctions, Public Policy, U.S. Government Contracts and International Procurement, and International Litigation, Arbitration, and Claims, who have experience in the Middle East and expertise in the issues presented by the current situation. The Task Force will provide briefings on selected key topics in the coming weeks, including a study of selected vital issues for clients wishing to do business in post-war Iraq. The Task Force will also continue to monitor the status of the Iraq economic sanctions and export control issues and inform those who wish of certain new developments. For further information, click here.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Press Releases from this Firm
Recent Content from this Firm
By Amy Riella, Kristen M Eddy, Christopher W James, Bill Lawler, Matthew Jacobs
By Ryan Carney, David Cole, George Gerachis, Gary R Huffman, David Peck, Todd Way
By Thomas H. Wilson, Eric Joseph Klein
By Thomas H. Wilson, David D'Alessandro, S. Grace Ho, Pam Stabler
By Matthew Greeson
By Price Manford, E. Ramey Layne, Christine Vaughn, Debra Duncan, Ryan Carney
By George Hopkins, Sharon Mattox, Jeremy Marwell, Corinne Snow
By Tirzah Lollar, Elizabeth Brandon
By Michael Holmes, Steven Paradise, Jennifer Poppe, Cliff Thau, Marisa Antos-Fallon, Andrea Batista, Elizabeth Brandon, Laurel Fensterstock, Sarah Hargrove Mitchell, Temilola Sobowale
By Sean Becker, David Snyder
Font Size:
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions