One major milestone in Iraq’s efforts to shed the yoke of the UN sanctions imposed after former Iraqi dictator Saddam Hussein’s invasion of Kuwait in 1990 comes next month, when Iraq should pay the last dollar of war reparations to its southern neighbour.

Under UN Security Council Resolution 1958 of 2010, Iraq is required to pay five per cent of its oil income to Kuwait in reparations stemming from the invasion. The money is deposited in a US Federal Reserve account and automatically transmitted to a compensation fund run by the UN.

Iraq’s Central Bank announced on 9 December that it has reached an agreement with the Federal Reserve to terminate the account, opened to channel deductions from its revenues from oil exports to the neighbouring emirate.

When the account is closed, Iraq should be declared in full compliance with the UN Security Council Resolutions related to the invasion, and the world body should clear the country from the burdens of the punitive measures that have outlasted Saddam.

Abdul-Bassit Turki, the senior Iraqi official in charge of a government committee coordinating with the UN, said Iraq’s Central Bank would pay the full amount of the remaining compensation before the end of 2021 to end the matter.

“Once everything has been paid, the UN should act immediately to terminate the sanctions,” Turki told the London-based Asharq Al-Awsat newspaper on Thursday. He said Iraq’s Foreign Ministry should call for a UN Security Council meeting to draft a new resolution removing the punitive measures against Iraq under Article VII of the UN Charter.

Baghdad has paid around $52 billion in reparations to Kuwait over the last three decades. The amount was decided to pay claims against Iraq submitted on behalf of Kuwaiti individuals, corporations and government for damage arising directly from Iraq’s invasion and occupation of the oil-rich emirate.

In theory, the final payment of the reparations to Kuwait will turn an important page in Iraq’s troubled history. The measure closes a painful chapter that rather than punishing Saddam in fact penalised the Iraqi people.

After the US-led invasion on Iraq in 2003, the UN lifted most of the crippling sanctions against the country. In 2015, the UN Security Council eased the embargo against Iraq, but left the Kuwait reparations and other measures related to stolen property and missing Kuwaiti persons under Article VII of the UN Charter to be resolved by diplomatic means.

After more than 31 years of punitive measures put in place under the UN Resolutions, Iraq should soon now clear the way to have full sovereignty over its oil revenues. But it is not yet clear how the Security Council will act to relieve Iraq from its other obligations towards Kuwait and eventually help the two nations to turn away from the invasion’s legacy.

Taking a broader view, the UN Resolutions relevant to Iraq’s invasion of Kuwait have had major regional implications as the world powers have continued to use the issue to shape a new regional system or force adjustments to the current one in order to advance various interests and preferences.

One of the mechanisms created by the Security Council is UNAMI, or the United Nations Assistance Mission in Iraq, which was given a broad mandate including ensuring Iraq’s compliance with resolutions related to Kuwait.

Subsequent resolutions since 2003 have given UNAMI the power to force Iraq’s compliance with punitive measures since 1990 regarding the repatriation or return of Kuwaiti and third-country nationals or their remains and the return of all Kuwaiti property, including archives, seized by Iraq.

In resolution after resolution, the council has called on the head of UNAMI to “promote, support and facilitate efforts” regarding compliance with these measures. One resolution even requested that the UN designate a deputy chief of UNAMI “with the responsibility for overseeing these issues”.

Over the last two decades, the mission, which has been receiving huge funds from Kuwait, has been part of the emirate’s playbook in regard to its relationship with Iraq and to a larger extent a foreign policy tool in Iraq for key council members.

Relieving Iraq from its obligations under Article VII of the UN Charter will not only be crucial to the future of UNAMI, but will also be a defining moment in Iraqi-Kuwaiti relations. While successive post-Saddam governments in Iraq have worked to comply with the obligations, many Iraqis have seen the reparations as a national humiliation.

But like Germans’ reactions to the punitive measures imposed on Germany after World War II, a broad Iraqi popular narrative about the Kuwait crisis could take decades to emerge, especially as Iraq has remained embroiled in its own existential problems.

As much as it provokes memories, this new milestone in Iraqi-Kuwaiti relations raises questions for many Iraqis about whether post-Saddam Iraq should pay for the former dictator’s wars and about the whole punitive approach to Iraq.

Historically, Iraq has always had issues with its southern neighbour, and successive Iraqi regimes since the modern state of Iraq came into being a century ago have been reluctant to accept Kuwait’s British-drawn borders that established it as a separate sheikhdom.

Some Iraqis also claim that Kuwait itself belongs to Iraq.

The Kuwaitis have always challenged this Iraqi version of history, saying that their country has never been part of Iraq. However, they have remained haunted by Iraq’s claims and fear that their powerful northern neighbour could move to annex their tiny nation.

When Saddam finally invaded Kuwait in 1990 after accusing it of encroachments on Iraq’s border and unlawfully drilling oil wells in its southern oil fields, he used a historic argument to justify his annexation of the emirate.

An international alliance led by the US succeeded in driving Iraqi troops out of Kuwait and helped the Kuwaitis to restore their independence, but the cost for Iraq was huge. Thirteen years of isolation and UN sanctions followed by bombings, two wars, occupation and a prolonged conflict have cost the country dearly in terms of human lives lost and material destruction.

The long shadow of the conflict has continued to haunt the two neighbours despite efforts to boost relations between Kuwait and the post-Saddam regime in Iraq. The demarcation of the Iraqi border with Kuwait under UN guidelines after Saddam’s ouster has also led to verbal echoes in Iraq.

In September 2019, relations between the two countries hit problems when the Iraqi envoy to the United Nations submitted an official letter of complaint to the organisation accusing Kuwait of attempts to change the maritime borders between the two countries.

The move sparked anger and defiance from Kuwait.

The escalation was followed by a storm of outrage by Iraqi lawmakers, militia leaders and commentators, who called on the government to revoke UN-sponsored peace deals, including one establishing the border between Iraq and Kuwait.

Iraqi anger also mounted over Kuwait’s construction of a major port on Boubyan Island in the Khor Abdullah Waterway, the only strategic access to the sea for Iraq. Many in Iraq’s political elite saw the move as part of Kuwaiti efforts to strangle Iraqi ports on the Arabian Gulf.

Iraq fears that Kuwait’s Mubarak Al-Kabeer Port could be turned into a financial and trade hub at the expense of Iraqi plans to develop a giant new port on the Al-Faw Peninsula, a little more than one km from the new Kuwaiti shipping centre.

Overall, many Iraqis feel that their country has been punished for what Saddam did to Kuwait and that they have paid dearly for his invasion of the emirate and for the crimes his regime perpetrated against them over three decades.

This is why there has been a strong sense of history present in the announcement that Iraq has finished paying more than $52 billion in compensation to Kuwait because it casts a shadow over prevailing mindsets and emotional considerations in the two countries, including whether it is possible to reach a lasting solution.

In such a dispute of historical and geopolitical magnitude, there is always the risk that leaving wounds unhealed may raise tensions and may even amplify xenophobia in the two countries, leaving deep scars on their long-term relations.

*A version of this article appears in print in the 16 December, 2021 edition of Al-Ahram Weekly.