The United Nations Gulf War reparations fund will hold a special meeting on Thursday to address Iraq’s plea to postpone a final $4.6 billion instalment payment for its 1990-91 occupation of Kuwait, a U.N. official said.
Reuters reported exclusively on Friday that Iraq, faces a cash crisis caused by falling oil prices and war with Islamic State, is seeking to defer the final tranche of reparations to Kuwait for wartime damage to its oil facilities.
“Because the Governing Council is aware of this issue, it decided to hold a special session to consider the issue of Iraq’s deposits to the compensation fund,” an official at the U.N. Compensation Commission (UNCC) said on Monday.
“The Governing Council will hold a special session to obtain the views of both Iraq and Kuwait on the issue,” the UNCC official, who declined to be named, told Reuters.
Any decision would depend on how ready the two sides are to reach an agreement, the official added.
Since Iraq was first allowed to resume oil sales nearly two decades ago it has paid funds into the UNCC, which oversees compensation for looting and damage inflicted during then- President Saddam Hussein’s seven-month occupation of Kuwait.
More than a million claimants have been paid and nearly all the $52.4 billion reparations bill has been met through Iraq’s annual allocation of 5 percent of revenue from crude oil exports to the fund.
But with its economy now set to shrink for the first time since the 2003 U.S.-led invasion toppled Saddam and ended more than a decade of sanctions, Iraq can ill afford to divert a large chunk of the 2015 budget to make that last payment due next year.
“We are in discussions with the Kuwaitis, trying to defer the payment for two years or at least a year, to allow some space… to present a realistic budget,” Iraqi Finance Minister Hoshiyar Zebari told Reuters in Baghdad last week.
The UNCC’s Governing Council – composed of the same member states as the U.N. Security Council – is currently chaired by Australia. Senior officials from Baghdad and Kuwait would be expected to attend the closed-door session on Dec. 18.