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Whereas, under Regulations (EEC) No 2340/90 and (EEC) No 3155/90, the Community has taken measures to prevent trade between the Community and Iraq; Whereas the United Nations Security Council has adopted Resolution 687 (1991) of 3 April 1991 which, in its paragraph 29, deals with claims by Iraq in relation to contracts and transactions the performance of which was affected by measures taken by the Security Council pursuant to Resolution 661 (1990) and related resolutions; Whereas the Community and its Member States meeting in Political Cooperation have agreed that Iraq must comply in full with the provisions of paragraph 29 of United Nations Security Council Resolution 687 (1991) and consider that, in deciding whether to reduce or lift measures taken against Iraq, pursuant to paragraph 21 of Security Council Resolution 687, particular account must be taken of any failure by Iraq to comply with paragraph 29 of the same Resolution; Whereas, as a consequence of the embargo against Iraq, economic operators in the Community and third countries are exposed to the risk of claims by the Iraqi side;

Whereas it is necessary to protect operators permanently against such claims and to prevent Iraq from obtaining compensation for the negative effects of the embargo; Whereas the Community and its Member States meeting in Political Cooperation have agreed to resort to a Community instrument in order to ensure uniform implementation, throughout the Community, of paragraph 29 of United Nations Security Council Resolution 687 (1991); Whereas such uniform implementation is essential for achieving the aims of the Treaty establishing the European Economic Community and in particular for avoiding distortion of competition; Whereas the Treaty does not provide, for the adoption of this Regulation, powers other than those of Article 235, Having regard to the Treaty establishing the European Economic Community, and in particular Article 235 thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Parliament, HAS ADOPTED THIS REGULATION: