United Nations Compensation Commission
Learning from the United Nation’s experience in
war economic reparation– The case of
compensation for losses resulting from Iraq’s
invasion and occupation of Kuwait
7 February 2012
By: Dr Mojtaba Kazazi, Executive Head, UNCC
• Constitution
• Mandate
• Structure
• Finance
• Claims Processing
• Categories of Claims
• Status of Payment
• Activities
• UNCC is a subsidiary organ of the Security
• UNCC operates within the framework of
various Security Council resolutions
• SC resolutions 687 (1991), 692 (1991), 1483
(2003), 1546 (2004) and 1956 (2010), report
of the SG (2 May 1991), established the
Commission, its jurisdiction, its policy
guidelines and its financing
Constitution (cont’d)
Resolution 687 (3 April 1991)
• Most important and comprehensive resolution
adopted by Security Council concerning crisis
between Iraq and Kuwait
• Provided for
– Demarcation of boundary (Boundary Commission)
– Demilitarized zone (UNIKOM)
– Destruction of weapons (UNSCOM) (UNMOVIC)
– Return of Kuwaiti property seized by Iraq
Constitution (cont’d)
Resolution 687 (3 April 1991)
– Payment of compensation by Iraq (UNCC)
– Exempting foodstuffs from trade embargo (Sanctions
– Repatriation of Kuwaiti and other nationals
– No acts or support of international terrorism
– Formal cease-fire upon acceptance of all of the above
Resolution 687: compensation
“16. Reaffirms that Iraq, without prejudice to
the debts and obligations of Iraq arising prior
to 2 August 1990, which will be addressed
through the normal mechanisms, is liable
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;...”
Resolution 687 :compensation (cont’d)
“18. Decides to create a fund to pay
compensation for claims that fall within
paragraph 16 and to establish a
commission that will administer the
Resolution 687: compensation (cont’d)
“19. Directs the Secretary-General to
develop and present to the Council for
decision, ... recommendations for the
fund to meet the requirement for
payment of claims ... and for a
programme to implement the decisions
in paragraphs 16 to 18 ...”
Report of the Secretary-General (S/22559)
On 2 May 1991, the Secretary-General presented to the Security
Council his report on the compensation provisions of resolution 687
Recommended that the proposed Compensation Commission take the
form of a claims resolution facility that would verify and value the
massive number of expected claims and administer the payment of
compensation. The nature of the Commission would therefore be
unique in the history of international efforts at post-war resolution.
"the Commission is not a court or an arbitral tribunal before which the
parties appear; it is a political organ that performs an essentially factfinding function of examining claims, verifying their validity, evaluating
losses, assessing payments and resolving disputed claims; it is only in
this last respect that a quasi-judicial function may be involved."
• Process claims, administer the UN
Compensation Fund and ensure payment of
successful claims 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 in
accordance with Security Council resolution
687 (1991)
Structure of the Commission
Governing Council
Consists of 15 members of the Security Council (5 permanent and 10
non-permanent) from which a President and 2 Vice-Presidents are
elected (2-year terms)
Policy- making organ
Established guidelines for claims processing
Appointed Commissioners
Approved compensation awards
Established priority and mechanisms for payment of compensation
269 decisions to date, all by consensus, as well as many conclusions
Approves budget of UNCC
Structure (cont’d)
During the claims processing period which concluded in 2007,
Commissioners, proposed by the Executive Secretary and appointed
by the Governing Council, worked in panels of 3 to verify and evaluate
claims, comprised 59 experts in areas such as law, accounting, loss
judgement, assessment of environmental damage and engineering
Nineteen panels of commissioners reviewed and evaluated the
submitted claims and reported their recommendations to the Governing
Services the work of the Commission at both policy making and
functional levels
• Paragraph 3 of resolution 692 (1991) “Decides to establish the
Fund and the Commission referred to in paragraph 18 of
resolution 687 (1991) in accordance with section I of the
Secretary-General’s report ....”
• Funds to pay compensation are drawn from the Compensation
Fund, which receives a percentage of the proceeds generated
by the export sales of Iraqi petroleum and petroleum products
• The percentage was originally set at 30 per cent by Security
Council resolution 705 (1991) and was maintained until 2000
when it was changed to 25 per cent under Security Council
resolution 1330 (2000)
• Security Council resolution 1483 (2003) reduced the level to 5
per cent and this percentage was reaffirmed most recently by
resolution 1956 (2010)
Claims Processing
• The Commission accepted for filing claims of
individuals, corporations and governments, submitted
by approximately 100 governments, as well as 13
international organizations for individuals who were
not in a position to have their claims filed by a
• Approximately 2.7 million claims in six categories
were filed
• Amount claimed: approximately $352.5 billion
• Total amount awarded: approximately $52.3 billion
• Paid to date: $35.4 billion
Categories of Claims
Category A claims:
Individual claims for departure from Iraq or Kuwait;
• Approximately 923,000 claims in six instalments;
• Approximately $3.4 billion claimed; $3.2 billion awarded.
Category B claims:
Individual claims for serious personal injury or death;
• Approximately 6,000 claims in three instalments;
• Approximately $20 million claimed; $13.5 million awarded.
Category C claims:
• Claims for losses under $100,000, e.g. the loss of personal property; the loss of
real property; the loss of income and business-related losses;
• Approximately 464,396 claims in seven instalments
• Approximately $10.8 billion claimed; $5 billion awarded.
These individual claims were treated as “urgent” claims and were processed on
an expedited basis using mass claims techniques, ahead of the larger individual
claims, corporate claims and the claims of Governments and international
Categories of Claims (cont’d)
Egyptian Workers’ claim:
• Consolidation of 1.2 million small individual claims for deposits
made to Iraqi banks;
• Approximately $500 million claimed; $84 million awarded to
223,817 successful claimants.
Category D claims:
• Similar losses as category C Claims but for losses over
• Approximately 13,900 claims;
• Approximately $16.5 billion claimed; $3.4 billion awarded.
Category E claims:
• Claims from corporations;
• Approximately 6,571 claims in four instalments;
• Approximately $78.7 billion claimed; $26.3 billion awarded.
Categories of Claims (cont’d)
Category F claims:
Claims by Governments and international organisations;
393 claims;
Four separate Panels of Commissioners appointed;
Approximately $236 billion claimed; $14 billion awarded.
Category F, Fourth Instalment claims (“F4”):
• Environmental claims;
• Approximately 168 claims in five instalments;
• Approximately $84.9 billion claimed; $5.3 billion awarded.
Categories of Claims (cont’d)
Palestinian late-filed claims:
• Approximately 46,231 claims;
- 43,855 were filed in category C; 7800 were deemed eligible for
inclusion in programme and 7300 were awarded approx. $123M
- 2,374 were filed in category D; 404 were deemed eligible for
inclusion in programme and 296 were awarded approx. $26M
Bedoun claims:
• Approximately 32,000 claims recommended for payment;
- Fixed awardable amount of $2,500 per claim; approx. $79M
Current Activities
The Commission's current principal areas of activity relate to:
• Arrangements for ensuring payments are made to the
Compensation Fund
• Level of Iraq’s contribution to the Fund
• Payment of claims and payment mechanism
• Negotiations between Iraq and Kuwait under the auspices of the
UNCC on the outstanding balance that remains owing to Kuwait
• Follow-up Programme for Environmental Awards
Prior to development of mandate
•Ensure a clear understanding of:
– demographics of prospective claimant population (e.g. size,
location, any special circumstances)
•Types of harm or loss suffered in order to clearly identify types of
claims eligible for compensation
•Legal bases
•Source of funds for compensation
•Entity/entities responsible for distribution
•Lump-sum settlement versus open-ended
•Mass claims processing versus individual review
•Fixed award or evaluation of loss(es)
•Timeframe for submitting claims (should avoid lengthy timeframes)
•clear mandate
•purpose of compensation
•source of funds
•who is to be compensated
•what harms or losses are to be compensated
•how harm is to be quantified
•how much compensation is to be awarded
how compensation is to be distributed
Considerations (cont’d)
•Ensure provision of adequate administrative resources
•Consider whether there is a need for a notice plan
•Devote adequate time to planning and policy development, will
save time and reduce costs later on
•Engage technical experts in early planning stages (e.g. legal,
financial, actuaries and information technology specialists)
•Computer applications designed to facilitate claims intake,
processing and payment should ideally be developed well in
advance of the time that they are required.
Considerations (cont’d)
•Claim forms should be clear and unambiguous important to use plain language, translation
•Supporting documentation, if required, should be
requested with claim form to avoid need for multiple
•Consideration should be given to testing claim form on
a sample claimant population prior to mass distribution
•A duplication identification strategy should be
developed before claims processing begins
Considerations (cont’d)
Claims processing
• Outreach is crucial – will assist in managing
claimants’ expectations and ensuring they have a
clear understanding of process and potential
• Elaboration of specific review methodologies
facilitates the verification and valuation of claims.
• Grouping similar claimants and loss types will
optimize the consistency of results both within and
between claims categories.
Considerations (cont’d)
Payment Mechanism &Transparancy
•Mechanism for paying compensation should be established well
before the first payments are made
•Responsibilities, including reporting requirements, of entities
distributing payments should be elaborated as early and as clearly
as possible
Audit & Oversight
•Audit is a very important part of a claims programme
•Agreement on the scope of audit should be reached at the
beginning of a claims programme and should be documented
Final Observations
• Source of compensation- Lump-sum settlement versus
• Legal base and issues
• Approach: Mass claims processing versus individual review•
Fixed amount or evaluation of losses
Verification methodology and standards
Approval of compensation-by who?
Payment Mechanism and transparancy of payment
Audit, oversight, accountability
• Detailed information on the UNCC can
be found on its website - www.uncc.ch