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 FUNDING FOR THE WMD PROGRAMME The UN has sought to restrict Iraq’s ability to generate funds for its chemical, biological and other military programmes. For example, Iraq earns money legally under the UN Oil For Food Programme (OFF) established by UNSCR 986, whereby the proceeds of oil sold through the UN are used to buy humanitarian supplies for Iraq. This money remains under UN control and cannot be used for military procurement. However, the Iraqi regime continues to generate income outside UN control either in the form of hard currency or barter goods (which in turn means existing Iraqi funds are freed up to be spent on other things).

These illicit earnings go to the Iraqi regime. They are used for building new palaces, as well as purchasing luxury goods and other civilian goods outside the OFF programme. Some of these funds are also used by Saddam Hussein to maintain his armed forces, and to develop or acquire military equipment, including for chemical, biological, nuclear and ballistic missile programmes. We do not know what proportion of these funds is used in this way. But we have seen no evidence that Iraqi attempts to develop its weapons of mass destruction and its ballistic missile programme, for example through covert procurement of equipment from abroad, has been inhibited in any way by lack of funds. The steady increase over the last three years in the availability of funds will enable Saddam to progress the programmes faster.

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