Under Secretary for Political Affairs Marc Grossman said during an ABC (Australia) interview May 16 the U.S.-proposed resolution to lift economic sanctions from Iraq also assigns the United Nations (U.N.) a vital role in the reconstruction of Iraq.

"If you look at the resolution, it spells out the many, many places where the United Nations would have a role: coordinating in humanitarian areas, working on reconstruction, participating in setting up an Iraqi government," Grossman said.

Grossman also said the resolution, which comes up for a vote the next week, proposes placing Iraqi oil revenue into an development fund run by an international board with U.N. representation.

"That fund in the resolution is very strictly laid out for the benefit of the Iraqi people -- for reconstruction, for humanitarian issues. ... (R)un by an international board with a representative of the [U.N.] Secretary General, someone from the IMF, the World Bank, outsiders, so that it's totally transparent on money coming in, totally transparent on what decisions are made, and totally transparent on money that's going out, all for the benefit of the Iraqi people," he explained.

Grossman said the United States has submitted the resolution because "Iraq is no longer run by a criminal regime. ... So why should the Iraqi people have sanctions on their economic activity?"

"It's time to free the Iraqi people. It's time to stop treating them like criminals and time to lift these sanctions," he stressed.

With respect to the reconstruction projects, he said he hopes "that Australian companies, American companies, other companies, who are a part of the coalition, will compete for these contracts and win them."

Grossman also took the opportunity to stress that "Terrorism is still with us."

"We want people to pay attention, and we need people to pay attention, because we believe there will be more terrorist attacks and I think we should be honest about that," Grossman said.

May 16, 2003

QUESTION: Well, thank you for your time. I'd like to get on to issues related to Iraq in a moment. But, first, on terrorism, the government here has issued new travel warnings for the region.

What is your information? How likely is the threat of new terrorist attacks in Southeast Asia?

UNDER SECRETARY GROSSMAN: First of all, thank you very much for the chance to be with you, and I am glad to talk about Iraq or any other subject. Terrorism is still with us. We have warned our citizens. I know Australia has and other countries have. We want people to pay attention, and we need people to pay attention, because we believe there will be more terrorist attacks and I think we should be honest about that.

QUESTION: There was one news report today quoting officials in Washington that up to 500 Jemaah Islamiya operatives could get within the region. Is that overly alarmist?

UNDER SECRETARY GROSSMAN: Well, I don't know. I think you'll understand I wouldn't comment on this number or that number. Let's just say that terrorists are active in Southeast Asia, just like they are active in Africa, just like they are active in the Middle East, and, regrettably, here in our hemisphere as well. Terrorism is a worldwide phenomenon. The United States and Australia have stood side by side in this, for which we are very, very grateful. But all of our citizens should recognize that we live in a world in which there is terrorism, and we are going to have to deal with it.

QUESTION: There is already close cooperation, counterterrorism cooperation between the United States, Australia, and Southeast Asian countries. But does that cooperation need to be intensified even further?

UNDER SECRETARY GROSSMAN: Well, Barry, I think there is a huge amount of cooperation, as you say. And, yes, we can always intensify cooperation. We and Australia are working together so closely. But there are lots more things that we can do with other people in Southeast Asia, and also around the world. But we are very pleased with what we do with Australians. We thank you for it. There is always more that countries can do together.

QUESTION: And how concerned are you about attitudes in Saudi Arabia given the lack of cooperation in the run-up to the Riyadh bombing?

UNDER SECRETARY GROSSMAN: Obviously we'd like the Saudis, as our ambassador said, to pay attention to the terrorist problem. And, obviously, when this happens in your country, as it did to them earlier this week, we want people to pay more attention. What happened was a terrible tragedy, but what I think you can see over these past few days is more and more conversation among Saudis that they have got to get a grip, not only on the people inside of their country, but on the terrorist financing, the people who come and go, and also then to the protection of sites where foreigners live and where Saudis live as well. I don't think this is an issue anymore of just foreigners in Saudi Arabia that somehow can be put aside. This is now an attack on Saudi Arabia.

QUESTION: Now, next week, the United States will be putting a proposal to lift sanctions on Iraq. Why is he not anxious to have that done quickly, and what are the prospects of a 15:0 vote in the UN on that?

UNDER SECRETARY GROSSMAN: We are working hard to have a good vote in the United Nations. We would like to move on to the lifting of sanctions. As our President has said, and your Prime Minister has said, Iraq is no longer run by a criminal regime. Iraq is no longer run by Saddam Hussein.

So why should the Iraqi people have sanctions on their economic activity? Why should the Iraqi people still have to take all of their food from the government?

Now this will all take some time to wind out, as our resolution says. But it's time to free the Iraqi people. It's time to stop treating them like criminals and time to lift these sanctions.

QUESTION: But, as I understand it, oil revenues are now under UN control. And if the situation changes or sanctions are lifted, what assurances are there that oil revenue will go entirely to the Iraqi people?

UNDER SECRETARY GROSSMAN: A very important question. In our resolution, as you can see, we take all of that oil revenue and put it into an Iraqi development fund. And that fund in the resolution is very strictly laid out for the benefit of the Iraqi people -- for reconstruction, for humanitarian issues. Further, to make sure that it's transparent, it's run by an international board with a representative of the Secretary General, someone from the IMF, the World Bank, outsiders, so that it's totally transparent on money coming in, totally transparent on what decisions are made, and totally transparent on money that's going out, all for the benefit of the Iraqi people.

QUESTION: So where will the resistance come from and what -- what are the arguments against the lifting of sanctions?

UNDER SECRETARY GROSSMAN: I don't know whether there will be resistance in the end, but people are arguing that maybe there should be a larger role for the United Nations, maybe the Oil-for-Food program shouldn't be wound down in just four months, maybe it should be longer.

Other people think that perhaps there should be a role for weapons inspectors, but we think we have dealt with all of those issues in the resolution. And, as you say, I hope when we -- it's also the United Kingdom and Spain -- put it down in final, people will recognize that it's an important resolution to vote for and they will do so.

QUESTION: And if that was to happen, if the sanctions would be lifted, what role would then be left for the United Nations to play, as you go forward?

UNDER SECRETARY GROSSMAN: There is a huge role for the United Nations. I think that the term of art we have all been using is a vital role for the United Nations. And, again, if you look at the resolution, it spells out the many, many places where the United Nations would have a role: coordinating in humanitarian areas, working on reconstruction, participating in setting up an Iraqi government. Our President said there should be a vital role with the United Nations, and that's what we mean. And I believe our resolution shows that that is true.

QUESTION: And just, finally, as Iraq's economy is rebuilt, to what extent with United States allies get favorable consideration, in terms of the companies that will be involved and have opportunities in that country?

UNDER SECRETARY GROSSMAN: First of all, I think that what Australia and the United States have done together, not just in the conflict, but in post-conflict -- for example, a very prominent Australian, Trevor Flugge, is working in a very high level in the Agricultural Ministry in Iraq -- is a very good thing. Australians are also part of the ORHA Agency in Iraq to redevelop Iraq.

But we think that Iraqis will make choices about the best companies to do business, and we think that that ought to open a transparent system. We'll do the very best we can. And I hope that Australian companies, American companies, other companies, who are a part of the coalition, will compete for these contracts and win them.

QUESTION: Good. Thanks very much for your time.

UNDER SECRETARY GROSSMAN: My pleasure. Thanks a lot.

QUESTION: Thank you.