Introduction
On January 13, 2022, the secretariat of the United Nations Compensation Commission (UNCC), an institution established by the UN Security Council in 1991 to process and pay claims resulting from Iraq's unlawful invasion and occupation of Kuwait from August 2, 1990, to March 2, 1991, issued a press release stating that, with a payment that day of over US$629 million to Kuwait, all claimants awarded compensation by the UNCC had received full payment.Footnote 1
On February 9, 2022, the UNCC Governing Council held a special session and adopted Decision 277 declaring that Iraq had fulfilled its international obligation to compensate all claimants and inviting the UN Security Council “to take the necessary action to note that the mandate of the Commission has been fulfilled and that the Commission will be winding down all activities in 2022.”Footnote 2 The UNCC secretariat issued a press release that day stating:
Approximately 2.7 million claims with an asserted value of US$352.5 billion were filed with the Commission. Following the conclusion of claims processing, the Commission awarded $52.4 billion to approximately 1.5 million successful claims from individuals, corporations, governments and international organizations. With the final payment of compensation made on 13 January 2022, all compensation awarded by the Commission has now been paid in full. Funds to pay compensation were drawn from the United Nations Compensation Fund which received a percentage of the proceeds generated by the export sales of Iraqi petroleum and petroleum products. This percentage was originally set at 30 per cent and was reduced over the years under various Security Council resolutions and Governing Council decisions. It was most recently set at three per cent under Governing Council decision 276 (2017).Footnote 3
This introduction briefly explains the background and context of Decision 277.
Establishment of the UNCC and Claims Processing
During a rare period of post-Cold War harmony,Footnote 4 the UN Security Council condemned Iraq's invasion of Kuwait and, acting by binding resolution under Chapter VII of the UN Charter, reaffirmed that Iraq was liable “under international law for any direct loss, damage—including environmental damage and loss of natural resources—or injury to foreign Governments, nationals and corporations as a result of its unlawful invasion and occupation of Kuwait,” and decided to create a fund (the Compensation Fund) to pay compensation for these claims and a commission to administer the fund.Footnote 5
The UNCC was composed of a Governing Council, consisting of the fifteen members of the UN Security Council, a secretariat, and nineteen panels of three commissioners. The Governing Council made decisions as to how claims would be collected and processed. The panels of commissioners considered the claims that were submitted and made recommendations for claims award. The Governing Council then decided on the award. The secretariat provided critical support and assistance to both the Governing Council and the panels of commissioners.Footnote 6
In its first decision in August 1991, the Governing Council established expedited procedures for the processing of urgent claims. Claims for departure from Iraq or Kuwait during the occupation period and claims for death or serious personal injury (classified as A and B claims) could have access to fixed payments ranging from $2,500 to $10,000 based on minimal documentation if no further claims were made by those claimants. There were over 856,000 claims awarded compensation in these categories, resulting in payments of about $3.1 billion. Claims for certain losses up to $100,000 (category C) could also be made with appropriate documentation and would be given priority. There were over 672,000 claims awarded compensation in this category, resulting in payments of over $5.2 billion. Given the large number of these claims, matching of computer records and sampling techniques were used.Footnote 7
There were fewer individual claims over $100,000 (category D), corporate claims (category E) and government and international organization claims (category F), but they were larger. More than 14,000 claims resulted in payments of about $44 billion.Footnote 8
Funding the Compensation Fund
In early August 1991, the Governing Council charged the Commission's executive secretary with providing detailed information regarding Iraq's oil production and “options for holding and managing revenues from Iraqi exports of petroleum and petroleum products” to fund compensation, to allow a UNCC working group to develop a funding mechanism itself.Footnote 9 Later that month, and in September 1991, the Security Council instead adopted resolutions 706 and 712 respectively, to set up a draw on Iraqi petroleum and petroleum products,Footnote 10 but no exports were made under this system either. To meet urgent UNCC funding needs, in October 1992 the Security Council adopted resolution 778 mandating the transfer of certain Iraqi funds held abroad to the Compensation Fund.Footnote 11 In April 1995, the Security Council, again acting under Chapter VII, adopted resolution 986 establishing the “oil for food” program, which would provide Iraq humanitarian goods in addition to funding compensation.Footnote 12 Finally, Iraq began exports and the Compensation Fund obtained resources—although, as the UNCC's February 9, 2022, press release states, the percentage draw varied over time.Footnote 13
Conclusion
The UNCC was a mass claims program established for the first time by Chapter VII UN Security Council decisions. It was possible to establish it and for it to fulfill its mandate because there was a Security Council consensus, the aggressor was clear, and there was a ready source of funding.Footnote 14 These conditions were not present in any of the other post-Cold War conflicts in which there were a large number of victims and considerable damage.Footnote 15 The Russian aggression against Ukraine would be ripe for a mass claims process similar to the UNCC, since a massive number of victims exist and massive damage has occurred, the aggressor is clear, and frozen Russian assets abroad could be at least a partial source of funding; however, since there is a Russian veto, there can be no prospect of the Security Council adopting such a system. On the other hand, the UN General Assembly could establish a claims collection process, as it did (despite United States and Israeli objections) for damage caused by the construction of the wall in the occupied Palestinian territory.Footnote 16
United Nations S/AC.26/Dec.277 (2022)
United Nations Compensation Commission
Governing Council
Sixteenth special session
Geneva, 9 February 2022
Fulfilment of the mandate of the Commission
The Governing Council,
Recalling paragraph 16 of Security Council resolution 687 (S/RES/687 (1991)) which affirmed Iraq's liability under international law for any direct loss, damage, including environmental damage and the depletion of natural resources, or injury to foreign Governments, nationals and corporations, as a result of Iraq's unlawful invasion and occupation of Kuwait,
Recalling also paragraph 18 of Security Council 687 and paragraph 3 of Security Council resolution 692 (S/RES.692 (1991)) wherein the Security Council decided to establish both the Commission and the Compensation Fund to process claims and pay compensation for losses and damage suffered as a direct result of Iraq's unlawful invasion and occupation of Kuwait,
Recalling further that pursuant to various Security Council resolutions and decisions of the Governing Council, the Government of Iraq was required to transfer a percentage of proceeds from export sales of petroleum, petroleum products and natural gas into the Fund,
Noting that following the establishment of the Commission, approximately 2.69 million claims were submitted by more than one hundred Governments and international organizations, seeking a total of approximately US$352.5 billion in compensation,
Noting also that following the processing of all claims received by the Commission, the Governing Council awarded $52,383,356,715 to 1,543,619 successful claimants,
Noting further that with the final compensation payment of $629,324,488 made on 13 January 2022 to the Government of Kuwait on behalf of the Kuwait Petroleum Corporation, all claims awarded compensation by the Commission have now been paid in full,
Appreciating the commitment of the Government of Iraq to meeting its obligations under relevant Security Council resolutions and Governing Council decisions and its cooperation over the lifespan of the Commission,
Recognizing the cooperation of the Government of Kuwait with both the Commission and the Government of Iraq,
Welcoming the improved relations between Iraq and Kuwait,
1. Declares that the Government of Iraq has fulfilled its international obligations to compensate all claimants awarded compensation by the Commission for losses and damages suffered as a direct result of Iraq's unlawful invasion of Kuwait;
2. Decides that effective immediately, the Government of Iraq is no longer required to deposit a percentage of proceeds from export sales of petroleum, petroleum products and natural gas into the Compensation Fund;
3. Requests that the President of the Governing Council present the final report of the Governing Council, as approved by the Governing Council, to the Security Council;
4. Invites the Security Council to take the necessary action to note that the mandate of the Commission has been fulfilled and that the Commission will be winding down all activities in 2022;
5. Notes that a final Governing Council session will be required to conclude the remaining matters related to the dissolution of the Commission and the Fund;
6. Directs the Secretariat to take the necessary administrative action for the return of any amounts remaining in the Compensation Fund to the Government of Iraq.
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