UK: The UN Lifts Sanctions Against Iraq

Last Updated: 30 May 2003

On 22 May 2003 the UN Security Council passed Resolution 1483, paragraph 10 of which effectively lifted all non-military sanctions against Iraq. However, Resolution 1483 does not have direct effect in UK law, and must therefore be implemented by way of domestic secondary legislation. Until that happens, UK sanctions against Iraq remain in force. UK sanctions against Iraq are wide and, in particular, prohibit, without a licence:

(a) the import and export of all goods to and from Iraq;

(b) any act calculated to promote such trade; and

(c) the making available of funds (defined widely) to any person in Iraq.


The May 2003 Open General Licences

However, in light of Resolution 1483, on 22 May 2003 the Export Control Organisation of the Department of Trade and Industry (DTI) issued two Open General Licences ("OGELs"), both of which entered into force on 23 May 2003. Their purpose is to remove the need for exporters to Iraq to apply to the DTI for export licences pending the implementation of new legislation. The OGELs do not have any retrospective effect.

The first OGEL authorises the export, supply or delivery of any non-military goods and technology to Iraq. The second OGEL authorises any act (such as negotiation and signature of contracts) calculated to promote the supply or delivery to Iraq of, inter alia: (i) foodstuffs and material and supplies for essential civilian needs; and (ii) other items and technology for civilian purposes.

In short, therefore, although the UK sanctions regime remains in force for the time being, the DTI has granted open licences designed to permit export to Iraq of all non-military items.

Inflows vs. outflows

Although paragraph 10 of Resolution 1483 anticipates the resumption of trade generally with Iraq, the May 2003 OGELs apply only to exports to Iraq. Exports from Iraq remain subject to the full UK sanctions regime pending repeal or amendment of the relevant legislation imposing sanctions. The OGELs are specifically silent on the question of outflows from Iraq, or acts calculated to promote the supply or delivery of goods from Iraq.

In the United States, however, the US Treasury's Office of Foreign Assets Control (OFAC) has already introduced open general licences permitting both inflows and outflows. It can thus be expected that the DTI will shortly be doing the same in the UK, thereby eliminating the lacuna that exists for the time being.

The 1996 Open General Licences

The DTI in 1996 issued two OGELs ("the 1996 OGELs") that gave effect to the United Nations "oil-for-food" programme (whereby Iraq was allowed to sell oil in order to finance the purchase of humanitarian goods). Approvals granted under the oil-for-food programme remain unaffected by UN Resolution 1483 and the new May 2003 OGELs, but the oil-for-food programme will be terminated within the next 6 months.


The new UN Resolution 1483 also lifts the financial sanctions in place against Iraq. However, implementing legislation is not yet in place in the UK and so the provision of funds to persons or destinations in Iraq is still prohibited and is not expressly provided for by the May 2003 OGELs.

That said, paragraph 23 of the Resolution provides that funds belonging to the old regime in Iraq located elsewhere or removed from Iraq by that regime shall be frozen and transferred to the UN-administered Development Fund for Iraq. The details of this provision are yet to be worked out by the UN or by the Bank of England in the UK.


The OGELS do not currently provide businesses seeking to export products from Iraq (such as petroleum-related products) with an open and general licence to do so. The sanctions regime remains in force and effect for the purposes of UK law in respect of these activities, and it remains necessary to apply for appropriate authorisations in such cases.

Until the UK introduces a regime similar to that enjoyed by companies in the US, only UK businesses that intend to export goods to Iraq may benefit from one of the existing Open General Licences.

The international sanctions regime is complex and transactions with Iraq might involve the laws of a number of jurisdictions. Accordingly, legal advice should be sought in any particular case.

Article by Robert Volterra and Adam Johnson

© Herbert Smith 2003

The content of this article does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific circumstances.

For more information on this or other Herbert Smith publications, please email us.

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