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CASI News, 21-27/1/01

NEWS 21-27/1/01

Owing to lack of time this is a modest mailing compared to previous efforts.
Main items are probably the oil ones, and the possibility that Iraq is
succeeding in imposing its surcharge; the likelihood of a visit by the Pope;
the WHO inspection of the effects of DU on civilians (potentially a much
more important development than the enquiries into the effects on soldiers
in the Balkans); and the excuse that factories capable of producing chlorine
may provide for new bombing raids.

*  U.S. nationals seek Iraqi financial aid, Iraq says
*  U.N. council kills Iraqi plan to aid Palestinians

*  6 Iraqis die in Western air attack
*  Iraq: Allied Warplane Confrontations

*  Britain Shows Flexibility on Iraq Arms Inspections
*  Calmer tone on Iraq from MoD

*  ŒSanctions on Iraq only benefited Baghdad's ruling elite'
*  Kuwaiti FM backs call to lift sanctions on Iraq
*  Iraq demands 'action' from Kuwait to lift sanctions
*  Ankara Supports Lifting U.N. Sanctions Against Iraq
*  UN panel head Norway wants review of Iraq sanctions
*  Powell asks staff to look at Iraq, other sanctions

*  An End to the Impasse? U.N. Seems Ready to Appoint Weapons Inspector for
*  WHO plans Iraqi uranium study
*  Nuclear Inspectors Praise Iraq
*  Iraq: UN technical team to visit next month
*  UN, Iraq ready aid distribution plan

*  Iraq sells to obscure companies as exports remain patchy
*  UN not pursuing illegal oil surcharges paid to Iraq
*  U.S. firms play key role in Iraq export revival
*  Poor refining margins obstacle to Iraq crude sales

*  Pressure on Iraq over 'new weapons'
*  Iraq dismisses N.Y.Times report on arms as groundless
*  London and Washington fear revival of Saddam
[See also, in Iraqi supplement: *  West Must Answer Saddam's Threat]

*  Iraq to sign free trade agreement with Syria
*  Pope defies West with Iraq visit
*  Iraq, Syria to invite Turkey to water-sharing meeting in Baghdad
*  Iraqi asylum seekers treble in a year
*  Baghdad settles war scores on celluloid
*  Iraq Protests over World Cup Qualifier Venue Change
*  Reno Lifted Restrictions on Iraqis
*  Chantal Kreviazuk Offers Peace And Hope In Iraq
*  Egypt cautious over Iraqi flight request
*  Turkey and Iraq for developing trade and economic relations

IRAQ SUPPLEMENT, 21-27/1/01 (sent separately)

*  Ten Years after the Gulf War [Naive and apparently innocent article ­
Œthe 'Arab solution for an Arab problem' advocated by Egypt failed because
of the differences of opinion among Arab countries on Iraq's invasion to
Kuwait¹ ­ which ends up naively invoking SC resolution 687 which calls for
the removal of ALL weapons of mass destruction from the Middle East, not
just Iraqi ones]
*  Baghdad booms as Saddam turns sanctions into gold [ΠThe road from the
Jordanian capital of Amman may be crowded, bumpy and narrow, but once across
the border, and past a recent statue of a sword-wielding Saddam on a rearing
horse flanked by four flaring Scuds, you hurtle along a new six-lane
motorway complete with laybys and picnic spots.¹]
*  Baghdad wolf woos Arab fold [Surprisingly moderate article from Ha¹aretz
in which an ŒAmerican diplomat¹ argues convincingly that Israel has nothing
to fear from Iraq. Is he going to keep his job?]
*  West Must Answer Saddam's Threat [and, by way of contrast, a hysterical
piece from the New York Daily News which suiggests that the US has
everything to fear from Iraqi factories capable of manufacturing chlorine]

Baghdad, Reuters, 21st january

Several U.S. nationals have contacted Iraq to see how they can benefit from
a gift of $94 million Baghdad had offered as humanitarian aid to poor
Americans, a senior Iraqi official said.  "Several Americans wrote messages
to us through the Internet asking how they can get the aid Iraq has
offered," Iraq's Foreign Minister Mohammed Saeed Al Sahaf said in an Iraqi
television interview late on Friday night.

Iraq sought UN clearance on Friday for the gift, telling Secretary-General
Kofi Annan in a letter that the money was an expression of "deep sympathy
for the human suffering and wretchedness of some 30 million U.S. citizens
who live below the poverty line". "The vast majority of those people are
black citizens who continue to suffer from persecution and discrimination
and live on refuse, deprived of the most basic means of subsistence," Sahaf
said. "Their continued suffering must not be met with silence," said the
letter, which did not spell out how Baghdad planned to distribute the money
if it were approved.

The offer of assistance is Baghdad's second in recent weeks, made in an
apparent effort to embarrass champions of the UN sanctions regime including
the United States and Britain. Iraqi leader Saddam Hussein last December
pledged one billion euros to Palestinians to aid their uprising against
Israeli occupation.

by Irwin Arieff

UNITED NATIONS (Reuters, January 24) - An Iraqi plan to give more than $900
million to aid the Palestinian uprising against Israeli occupation has died
a quiet death in the U.N. Security Council, diplomats said Wednesday.

"At this stage it is going nowhere," said Palestinian U.N. delegate Nasser
al-Kidwa. "It doesn't seem the atmosphere in the Security Council is very
conducive to this right now."

Iraqi President Saddam Hussein last month promised 300 million euros ($276
million) to help the families of Palestinians killed or wounded in their
uprising and another 700 million euros ($644 million) to buy food and
medicine for the Palestinians.

At least 310 Palestinians have been killed in the violence since the
uprising began in September. Forty-seven Israelis and 13 Israeli Arabs have
also died.

The gift required the approval of the 15-nation Security Council because the
money would come from Iraqi oil sales made under the U.N. food for peace
program, intended to cushion the people of Iraq from the effects of economic
sanctions imposed on Baghdad over its 1990 invasion of Kuwait.

The program allows Baghdad to sell oil and use the proceeds to buy food,
medicine and other essential goods.

But the sanctions regime is closely monitored by a special Security Council
committee, with representatives of all 15 council member nations. The panel
is required to approve every Iraqi expenditure under the program.

If it cannot agree on a spending request, it kicks the matter up to the
Security Council, which is what happened in the case of the Palestinian gift
proposal, the panel's chairman Ole Peter Kolby of Norway told Reuters.

When Kolby informed the council of the impasse in his committee Monday,
delegates greeted the announcement with utter silence. Two days later, no
council member had asked for a discussion at the council level, diplomats

And without council approval, the proposal dies, though theoretically it
could be revived at a later date, they said.

"We have consulted with members of the council but we are also aware that
things like that need the consensus of the council," Palestine's al-Kidwa
said in a telephone interview.

During closed-door committee meetings, France, Russia and China expressed
support for the Iraqi request but the United States and Britain blocked any
action, arguing the United Nations had other means to help Palestinians
without diverting funds from needy Iraqis.

The Palestinian aid is not the only gift request put forward by Baghdad.
Iraq last week sought U.N. clearance for a gift of 100 million euros ($94
million) to "homeless and wretched" Americans living in poverty.

Washington called that plan "ridiculous and nonsensical," accusing Baghdad
of "playing political games with the world."

Baghdad wants the sanctions lifted, arguing it has fulfilled its obligation
under council resolutions to eliminate its weapons of mass destruction. The
council says Iraq must first let weapons inspectors return to verify its


SAMAWA (Iraq, Reuters), Jan 21: Citizens of the southern province of
Muthanna lashed out at the United States and Britain on Sunday during a
funeral procession of six people who were killed in a Western air attack in
southern Iraq on Saturday.

Iraqi newspapers said on Sunday that the death toll from Western air attack
on southern Iraq on Saturday had risen to six.

The mourners also denounced regimes of Kuwait and Saudi Arabia for housing
the planes that patrol the southern no-fly zone.

Reporters working for Western news agencies and television networks were
taken on Sunday by the Iraqi ministry of culture and information to the area
where Iraq said it was raided by US and British planes.

"This crime was carried out by US and British planes in direct support from
the Kuwaiti and Saudi regimes," Governor of Muthanna province Ayad Khaleel
Zaki, who attended the funeral, told reporters.

A Reuters photographer said the raid struck a fodder warehouse of irrigation
ministry, 120 km south of Samawa near the Iraqi-Saudi border.

He said part of the warehouse was destroyed but nearby houses were not
damaged. There were no Iraqi military units in the area.

The photographer said six of the employees at the warehouse were killed in
the attack and three others were slightly injured.


BAGHDAD, Iraq (Associated Press, Mon 22 Jan 2001) ‹ Iraq reported Monday
that U.S. and British warplanes had bombed civilian buildings in the
northern and southern parts of the country.

No casualties were reported in the airstrikes, the second since the Saturday
inauguration of President Bush.

In a statement carried by the official Iraqi News Agency, Iraq's military
said ``enemy ravens, with direct support from the rulers of Kuwait and Saudi
Arabia, violated our national airspace ... and bombed some of our civil and
service installations.''

The statement said there were bombings in both the northern and southern
no-fly zones but did not specify exactly where. ``Civil and service
installations'' usually refer to government offices offering public

On Saturday, Iraq said six people were killed and three injured in
airstrikes by U.S. and British warplanes over southern Iraq. It said its air
defense units hit one of the aircraft.

The U.S. military denied that any aircraft was hit, saying all planes
returned safely following a raid in response to Iraqi anti-aircraft fire.


by Duncan Shiels

LONDON (Reuters, 22nd January) - In a renewed sign of flexibility, Britain
said on Monday that Iraq did not have to accept ``hook, line and sinker'' a
U.N. resolution on arms inspections in order to discuss how such inspections
might resume.

The December 1999 resolution promises a suspension of U.N. sanctions six
months after the resumption of inspections of suspected Iraqi weapons sites.
The inspections were broken off in 1998. U.S. and British forces bombed Iraq
in retaliation for Baghdad's alleged non cooperation.

``Iraq doesn't have to accept Resolution 1284 hook line and sinker without
clarifying both the style and the practice of... the weapons inspection team
on the one hand and without seeking the necessary clarification of the
modalities of inspection that they have genuine anxieties over,'' junior
Foreign Office Minister Peter Hain told Reuters.

``The key is getting weapons inspectors back in and getting sanctions
suspended, and that could happen within 180 days of letting the weapons
inspectors back in.''

But Hain, speaking after addressing the Royal Institute of International
Affairs, insisted that Resolution 1284 was still the bedrock of any movement
on the issue of the lifting of U.N. sanctions, imposed after Iraq invaded
Kuwait in 1990.

``In the end Iraq does have to accept Resolution 1284 to move the situation
forward,'' he said.

Hain first indicated a desire to see the current stalemate broken week when
he said last week that Iraqi President Saddam Hussein would find
``reasonable people ready to do business'' if he signaled a readiness to

``I think everybody would want to show goodwill, and everybody would want to
show flexibility,'' Hain told Reuters in an interview.


The apparent diplomatic shift by Britain -- Washington's most steadfast ally
against Saddam -- comes in the face of growing demands from the Arab world,
Russia and France for an end to the suffering of Iraqi civilians.

Hain has been one of Saddam's most outspoken critics, highlighting
allegations of human rights abuses, corruption and reports of continued work
on illicit Iraqi weapons of mass destruction in an effort to maintain
pressure on Baghdad.

But British diplomats have privately signaled unease at the continued
impasse over sanctions and said Britain would try to persuade the United
States to end patrols over the no-fly zone in southern Iraq, which they said
were risky and costly and a source of resentment in neighboring Saudi

Hain said Iraq had been biding its time while awaiting the incoming
administration of U.S. President George W. Bush (news - web sites), and,
despite talk by Bush and some of his appointees of more robust U.S. action
against Baghdad, he said Iraq saw a new opportunity.

``Everyone wants to move the situation in Iraq on...And the advent of the
new U.S. administration, which Baghdad has said privately it was waiting for
before it considered where it stood, is an opportunity to take things
forward,'' he said.

In his speech to the Royal Institute entitled ``The End of Foreign Policy?''
Hain pleaded for governments to refrain from the pursuit of narrow national
interest in a world where the biggest problems -- global warming, AIDS (news
- web sites) and drug abuse and trafficking -- needed cross-border

``We live in a world where there is no longer such a place as 'abroad','' he

by Richard Norton-Taylor
Guardian, January 25, 2001

Britain seemed to change its tone towards Iraq yesterday, playing down
reports in the US that Saddam Hussein had rebuilt three chemical weapons
factories and saying that threats posed to British and US aircraft
patrolling the no-fly zones had diminished.

There is "no threat yet" from Iraqi nuclear, chemical or biological weapons,
said a senior Ministry of Defence official, who added that the past year had
seen fewer threats to the patrolling jets.

His remarks were in contrast to recent rhetoric from ministers directed at
the Iraqi dictator. They also stood in contrast to a US intelligence report
stating there was "no let-up" in Iraq's drive "to reconstitute its [pre-Gulf
war] weapons and missile capabilities".

The MoD's shift in tone coincided with praise for Iraq by experts from the
International Atomic Energy Agency. Ahmed Abu Zahra, head of the agency's
team, refused to comment on whether the group had found evidence that Iraq
was reviving its nuclear weapons facilities, but he told Reuters in Baghdad:
"Everything went well, we found good cooperation from our counterparts in
Iraq and from the Iraqi Atomic Energy Organisation."

However, the senior MoD official did say that if there were evidence of Iraq
rebuilding its arsenals or working on weapons of mass destruction, Britain
and the US would have no hesitation in bombing relevant sites.

Although the official said that Britain's "overall strategic objectives"
remained the same, the change in tone may reflect a realisation in Whitehall
that US and British tactics have not swayed President Saddam.

MoD figures released yesterday said that US and British jets had dropped 500
bombs on Iraq last year compared to 1,500 in 1999. British pilots dropped 36
bombs last year.

Although the official said that "we do not want to up the temperature", he
said there were other reasons for the relative decline in the number of
times British pilots had reacted to Iraqi artillery fire or missiles. The
pilots, who have flexible rules of engagement, did not want to respond in a
predictable way, he said.

Figures given yesterday to Menzies Campbell, the Liberal Democrats' foreign
affairs spokesman, suggest that the bombing rate has risen slightly in the
past few weeks.

Geoff Hoon, the defence secretary, revealed that patrolling the no-fly zones
had cost Britain £911m since 1982.

Times of India, 22nd January

KUWAIT CITY: A Kuwaiti newspaper called on Sunday for the lifting of
"sanctions on the Iraqi people", saying the UN embargo in force since Iraq's
1990 invasion of Kuwait had only served the leadership in Baghdad.

"We say, motivated by Kuwait's conscience, lift the siege on the Iraqi
people, and target sanctions directly at the ruling elite," said the
liberal-leaning Al-Rai Al-Aam in a rare Kuwaiti call for an end to the

It said in a front-page editorial that Iraqi President Saddam Hussein's
government had "greatly benefited from the international sanctions."

"The regime won't fall if it is not targeted directly," the paper said,
adding that the decade old sanctions had provided Baghdad with "a fortress
in which to use Iraqis as human shields."

Al-Rai Al-Aam said that "the Iraqi regime must be punished, and the Iraqi
people must be liberated," taking up the theme of "smart sanctions" to
target the leadership in Baghdad.

"There is no point in allowing the (Baghdad) regime to plant hatred in
generation after generation" of Iraqis, who blame the West as well Kuwait
for the continued sanctions, it said.

"We, in Kuwait, are the first to realise this fact", the paper added.

The call for a lifting of sanctions was expected to stir a heated debate in
Kuwait, where people have little trust in Iraq, following its seven-month
occupation which was rolled back by the US-led coalition 1991 Gulf War
against Saddam Hussein's regime.

It came a week after the 10th anniversary of the start of the conflict and
followed Saturday's swearing in of US President George W. Bush, whose
country imposed the sanctions and has been fiercely opposed to lifting them.

Times of India, 23rd January

KUWAIT CITY: Foreign Minister Sheikh Sabah al-Ahmad al-Sabah on Monday
backed a call in a Kuwaiti newspaper to lift the decade-old UN sanctions on
the emirate's former occupier Iraq but accused Baghdad of a new

"I was the first to call Jassem Bodai (the paper's editor) to congratulate
him for his brave editorial," Sheikh Sabah told reporters in parliament.

Al-Rai Al-Aam newspaper called Sunday for the lifting of "sanctions on the
Iraqi people," saying the UN embargo in force since Iraq's 1990 invasion of
Kuwait had only served to strengthen the leadership in Baghdad.

"We say, motivated by Kuwait's conscience, lift the siege on the Iraqi
people, and target sanctions directly at the ruling elite," said the paper,
in a rare Kuwaiti call for an end to the embargo.

But Sheikh Sabah charged that the Iraqi leadership itself opposed lifting
sanctions. "The issue is that the Iraqi regime does not want (to see) the
sanctions lifted," he said.

The foreign minister also regretted a threat from Baghdad that it could
withdraw recognition of the emirate's territorial integrity over its support
for US and British air strikes.

The warning came a day after Baghdad said six civilians were killed in a
raid on southern Iraq, which western planes patrol from bases in Kuwait and
Saudi Arabia as well as aircraft carriers in the Gulf.

"We hope that reason should guide whatever is said in the Iraqi press or by
officials. But it is regrettable that they have decided to escalate the
issue," Sheikh Sabah said.

"This escalation is not against Kuwait only, but also against the UN and its
resolutions. I don't think this would serve the Iraqi interests," he added.

A US-led coalition evicted Iraqi occupation forces from Kuwait in the 1991
Gulf War. Three years later, Iraq officially recognised the state of Kuwait
and its UN-demarcated borders.

But MP Uday Saddam Hussein, elder son of the Iraqi president, called last
week for parliament "to prepare a map of the whole of Iraq, including Kuwait
City, as an integral part of Greater Iraq."

Iraqi officials have since played down Uday's call in the face of
international protests. (AFP)

Times of India, 25th January

BAGHDAD: An official Iraqi newspaper reacted with scepticism on Wednesday to
a Kuwaiti call for a lifting of the decade-old UN sanctions against its
former occupier.

"There is no concrete proof that they have changed their policies ...
because change must come through action, not words whose aims can be
deceiving," said Ath-Thawra, mouthpiece of the ruling Baath party.

On Monday, Kuwait's Foreign Minister Sheikh Sabah al-Ahmad al-Sabah backed a
call in a Kuwaiti newspaper to lift the sanctions, which it said had only
served to harm the Iraqi people while boosting the leadership in Baghdad.

"We say, motivated by Kuwait's conscience, lift the siege on the Iraqi
people, and target sanctions directly at the ruling elite," said the

Ath-Thawra laid down a list of conditions for an improvement in ties between
Baghdad and Kuwait City.

The emirate would have to change its stand in international and regional
forums, halt its support for US and British overflights of Iraqi territory,
and "stop playing the card of the missing whom it says are prisoners," the
paper said.

Iraq has been under sanctions linked to disarmament ever since its August
1990-February 1991 occupation of Kuwait. (AFP)

by John Ward Anderson

ANKARA, Turkey (Washington Post foreign service, January 26, 2001) --
Turkey, a key NATO ally that provides a military base for fighter jets
enforcing a "no-fly" zone over northern Iraq, favors lifting sanctions
against Iraq if effective checks on its military can be enforced.

"Iraq was one of our main trade partners before the Gulf War," Prime
Minister Bulent Ecevit said in an interview this week, noting that his
country has lost about $35 billion in trade since U.N. sanctions were
enacted after Iraq's invasion of Kuwait in August 1990. Turkey would favor
lifting the embargo, he said, "provided that controls on, checks on,
military preparedness are continued . . . but it should not deprive us of
our economic interests."

Ecevit's comments come as there is broader international apprehension about
what the new Bush administration's policy will be regarding sanctions
against Iraq, which many countries are ignoring. Analysts and politicians
here have expressed concern that Bush and his aides  - many of whom were top
U.S. policymakers during the 1991 Persian Gulf War -- might take an even
tougher stance against Iraq than did the Clinton administration.

Ecevit seemed to signal that while his government will continue to allow the
use of Incirlik Air Base for flights that enforce the no-fly zone, it has
become increasingly difficult to support sanctions that strike so hard at
Turkey and which so many other countries are violating.

Though Turkey has recently appointed an ambassador to Iraq and sent
humanitarian aid flights to its southern neighbor, Ecevit said "it would be
unfair to put the blame on Turkey" for eroding international support for the
embargo. "Turkey has been the major sufferer of the embargo on Iraq" while
loyally adhering to it.

The United States supports the sanctions as a way to isolate Iraqi President
Saddam Hussein and contribute to what it hopes will be the collapse of his
government. Many analysts say that Turkey does not necessarily support that
goal because of its concern that without a strong leader in Baghdad, Iraq
could splinter and cause the creation of a Kurdish nation in the north that
would entice Kurdish areas in southern Turkey to break away and join in a
new state.

"It's not our concern who continues the leadership of this or that or any
other country," Ecevit said. "Saddam is there in the position of leadership,
and that's a fact we cannot change. The United States has tried to change it
for several years, but to no avail. But whoever is in power, I hope the
country will take steps for its development in a democratic and peaceful

The Kurdish issue in the southeast, where more than 30,000 people have
disappeared or been killed in 16 years of conflict between Turkish forces
and separatist rebels, remains one of Turkey's thorniest problems. Many
analysts say that following the February 1999 arrest of Abdullah Ocalan, the
leader of the separatist Kurdish Workers' Party, the Turkish government is
still relying on military options even after effectively winning the

"It is true the separatist Kurdish terrorism has diminished in the last year
or two, but it has not ended," Ecevit said. "The armed terrorists are still
existing on our borders, in northern Iraq. They can always resume their

Ecevit outlined an expansive vision of Turkey's role in the region and the
world, noting its strategic location as a bridge between Europe and Asia and
its network of alliances with the United States, Europe and NATO, as well as
with Israel and other Middle Eastern countries.

"The United States realized before any other Western country that Turkey's
importance has increased since the ending of the bipolar world," Ecevit
said. "I'm sure that relations with the United States will continue in a
strategic way under President Bush's administration as well."

Oslo, Reuters, 26th January

Norway, heading a key UN Security Council committee on Iraq, said yesterday
it wanted to target UN sanctions more directly against President Saddam
Hussein and ease the suffering of ordinary Iraqis. "I think we should try to
target them (sanctions) in a better way if that is possible," Foreign
Minister Thorbjoern Jagland told reporters during talks with visiting
Egyptian Foreign Minister Amr Moussa. "We have to take into account the
humanitarian situation in the country."

Norway took over this month from the Netherlands as head of the 15-member,
UN Security Council committee monitoring sanctions imposed on Iraq after its
1990 invasion of Kuwait. Egypt has led calls for Iraq to be reintegrated
into the Arab world 10 years after a U.S.-led coalition ousted Saddam's
forces from Kuwait in the Gulf War. Cairo says sanctions punish Iraq's
people more than its leaders.

"The best thing would be to implement (UN Security Council) Resolution
1284," Jagland said. "But what is needed then is that Iraq comply with
demands from the United Nations." Resolution 1284, passed in December 1999,
promises a suspension of UN sanctions six months after the resumption of
inspections of suspected Iraqi weapons sites.

The inspections were broken off in 1998 and Iraq says it will not accept a
new UN arms inspection team, saying that it has already destroyed its arms
of mass destruction. U.S. and British forces bombed Iraq in retaliation for
Baghdad's alleged non-cooperation. Jagland declined to spell out how
sanctions might be targeted against Iraqi leaders, saying he had first to
consult other Security Council members. "If it is possible to get more smart
sanctions I would appreciate it very much. But the situation is very, very
complicated," he said.

U.S. Secretary of State Colin Powell has asked his assistants to come up
with ideas on how to reinvigorate the sanctions, in line with the new Bush
administration's campaign promises, a State Department spokesman said on
Wednesday. The United States has expressed dismay at a recent erosion of the
sanctions regime, through flights to Baghdad without UN approval and through
the unauthorised export of Iraqi oil via Turkey, Iran and Syria.Moussa, who
arrived in Norway for a one-day visit after a trip to Sweden, the current
president of the European Union, declined to outline his views on Iraq. He
said he and Jagland would discuss the sanctions late yesterday.

Iraqi Vice President Taha Yassin Ramadan visited Cairo last week for the
highest level visit since Iraq invaded Kuwait. In Rome earlier yesterday,
Iraqi Health Minister Umeed Madhat Mubarak said his country had adhered to
terms of its UN-supervised oil-for-food agreement but that the United
Nations was holding up important contracts.

CNN, January 24, 2001

WASHINGTON, Jan 24 (Reuters) -- U.S. Secretary of State Colin Powell has
asked his assistants to come up with ideas on how to reinvigorate sanctions
against Iraq, in line with the new Bush administration's campaign promises,
State Department spokesman Richard Boucher said on Wednesday.

Separately, Powell has asked State Department officials to look at the range
of sanctions which the United States imposes on foreign countries, possibly
to reconsider them, he added.

The Bureau of Near Eastern Affairs, led by the assistant secretary Edward
Walker, is the main department looking at the Iraqi sanctions, imposed by
the United Nations in 1990 after Iraqi forces invaded neighboring Kuwait.

The United States has watched in dismay as the sanctions against Iraq
gradually erode, through flights to Baghdad without U.N. approval and
through the unauthorized export of Iraqi oil through Turkey, Iran and Syria.

President George W. Bush said in his election campaign that he would like to
tighten up the sanctions system through coordination with Washington's

But analysts say they doubt the United States can make much headway toward
persuading Russia and France, fellow members of the U.N. Security Council,
to take a firm stand.

Boucher said: "He (Secretary Powell) has asked various people in this
building to look at the issue of sanctions in Iraq and come up with ideas
about how he might achieve his goals of re-energizing them."

"There's no question in his mind about the need for the international
sanctions on Iraq to be maintained and re-energized so that Iraq can't
reconstitute its threat to the region," the spokesman added.

"He has separately asked other people in this building to look at the
panoply of U.S. sanctions, so that we can get a handle on that and look at
how we conduct those," he said.

Boucher did not say whether the reviews were formal or whether Powell had
set up any committees. He also mentioned no deadlines for Powell's
assistants to report back.

In his testimony to the Senate Foreign Relations Committee last week, Powell
said he wanted to review all the sanctions in place, with a view to removing
some of them.

He said State Department officials were spending too much time on tasks such
as certifying the behavior of foreign countries to check if they are liable
to sanctions.

One of the most controversial examples is the annual certification of
countries which are cooperating with the United States in the war against
illegal drugs.

Powell said: "I've got battalions of lawyers and experts and analysts who
want to be worrying about a regional strategy for the Andes, who are instead
writing long reports about who should be certified or not certified."

"That's not the best use of our talent," he added.

Many of the sanctions are mandated by Congress, so the administration can
remove them only by asking for a repeal of the legislation which put them in

Powell said he wanted members of Congress to "count to 10" before they pass
sanctions, especially in response to a particular constituent interest.

"They (sanctions) just keep coming. I think I've seen about half a dozen new
ones even before I took office in the last couple of weeks," he added.

But in some cases sanctions could be useful, he added. "It should be one of
the tools available to the administration, the president and the secretary
of state in discussing a full range of issues with another nation," he said.


UNITED NATIONS, Jan. 26 ‹ The U.N. Security Council¹s weeks-long deadlock
over the selection of an executive chairman for a new U.N. Iraq disarmament
commission may end soon.

Hans Blix of Sweden, a former director-general of the International Atomic
Energy Agency (IAEA), appeared likely to be appointed hed the [SIC head of?]
the new U.N. Monitoring, Verification and Inspection Commission, or UNMOVIC,
diplomats said late on Tuesday.

His name had been proposed informally by France and a Western diplomat said
he was acceptable to the United States. Russia was also said to be agreeable
to his appointment.


Last week, Secretary-General Kofi Annan attempted to break the impasse by
nominating Rolf Ekeus, also a Swede, for the post.

But Russia, China and France, three permanent members of the Security
Council most sympathetic to Iraq, opposed him. Ekeus had headed UNMOVIC¹s
predecessor, the U.N. Special Commission, or UNSCOM, from 1991 to 1997, and
they said the new agency needed to make a fresh start.

³You know we like the Swedes,² French Ambassador Alain Dejammet quipped, in
confirming his support for the 71-year-old Blix, who headed the Vienna-based
IAEA, the U.N. nuclear watchdog, for 16 years until January 1998.

During those years Blix sent IAEA specialists to Iraq to work with Ekeus¹s
teams, but many specialists did not consider the nuclear agency as tough as
UNSCOM¹s inspectors in its dealings with Iraq.

As recently as this week, U.S. Secretary of State Madeleine Albright
reaffirmed Washington¹s support for Ekeus, currently Sweden¹s ambassador in

Speaking to reporters at the United Nations on Monday after presiding over a
Security Council session on the Democratic Republic of the Congo, she said
she found it ³mighty ironic² that some nations had opposed Ekeus.

She noted that the same countries had ³longed for Ambassador Ekeus² when
UNSCOM was headed by his successor, controversial Australian diplomat
Richard Butler. Butler resigned last June after two years as UNSCOM¹s
executive chairman.


UNMOVIC is supposed to complete the scrapping of Iraq¹s biological, chemical
and ballistic missile programs, as called for in Security Council
resolutions adopted after a U.S.-led coalition expelled invading Iraqi
troops from Kuwait in 1991. The IAEA is responsible for ensuring Baghdad
does not rebuild its clandestine nuclear weapons program.

The new arms agency was created under a Dec. 17 council resolution that
paves the way for a suspension of U.N. trade sanctions against Iraq if
Baghdad complies with arms demands.

Eliminating Iraq¹s weapons of mass destruction is a key requirement for
lifting the sanctions, in force since Baghdad invaded Kuwait in August 1990.

The arms inspectors have been barred from returning to Iraq since leaving in
mid-December 1998, shortly before the United States and Britain launched a
four-day air campaign called Desert Fox in retaliation for Baghdad¹s failure
to cooperate with the U.N. weapons teams.


A team of IAEA inspectors has just completed the agency¹s first visit to
Iraq since 1998. But it was sent to monitor Baghdad¹s compliance with the
1968 Nuclear Non-Proliferation Treaty, which permits the peaceful use of
nuclear energy. The IAEA team was not part of the regime established with
UNSCOM to hunt down and destroy Iraq¹s weapons of mass destruction.

The IAEA experts arrived in Iraq last Friday and their leader, Ahmed Abu
Zahra, said on Tuesday they had completed their work and that ³the
cooperation was good.

by Frances Williams in Geneva
Financial Times, 23rd January

The World Health Organisation plans to study the health effects of depleted
uranium in Iraq following the first formal request by the Iraqi government
earlier this month.

It has also agreed to an Iraqi request to put concerns over the health
effects of DU on the agenda of the WHO's annual assembly next May, a move
that seems certain to stoke criticism of the international handling of the
DU weapons issue.

Iraq and other Arab states have been angered by the contrast between the
failure of the United Nations and others to investigate the impact of DU
weapons used by the US against Iraq during the Gulf War in 1991, and the
rush of activity to investigate their use in Kosovo and Bosnia following
fears raised by European governments that this may be linked to the deaths
of some Balkan peacekeepers from leukaemia and other cancers.

Iraq has blamed armour-piercing DU weapons for an apparent increase in
cancers and birth defects in affected areas, especially in the south, and
similar problems have been reported by US Gulf War veterans.

More than 300 tons of DU were dropped by the allied forces in Iraq, compared
with about 12 tons in Kosovo in 1999 and rather less in Bosnia in 1994-95.
Samir Ben Yahmed, head of the WHO's Iraq programme, said that deficiencies
in the collection and analysis of data on health in Iraq meant it was
impossible to say for sure whether there had in reality been an increase in
possible DU-linked diseases. Strengthening the reporting and analysis system
was thus a WHO priority, but he could not say when the first results would
be in.

The WHO has already said it doubts that DU weapons could be the cause of
leukaemia, a blood cancer, in Balkan peacekeepers.

The main risk comes through inhalation or ingestion of radioactive toxic
dust following an explosion, which could potentially cause other forms of
cancer and damage kidney function.

Recent revelations that DU weapons may contain traces of plutonium, which is
deadly even in tiny quantities, have sparked yet more anxiety.

The UN environment programme is analysing samples of DU weapons taken from
sites in Kosovo, the results of which are due for publication in March.

However, no such tests have been conducted in Iraq.

Las Vegas Sun, 24th January

BAGHDAD, Iraq (AP) -- U.N. nuclear experts praised Iraq for cooperating with
an inspection completed Wednesday, but refused to say whether they had found
any evidence Iraq was restarting banned weapons programs.

The visit came as Iraq prepared to sit down with the United Nations to
determine whether broader monitoring of its nuclear and other weapons
programs could resume, and as the new U.S. administration made clear it will
take a hard line on Iraq.

Iraq also said Wednesday that it would welcome a U.N. team to work out how
to spend $530 million authorized by the United Nations for use in rebuilding
the country's ailing oil industry.

Under the U.N. oil-for-food program, Iraq can sell its oil but its proceeds,
monitored by the United Nations, must go for humanitarian needs and other
specific uses. Iraq is under sanctions that can only be lifted once U.N.
inspectors confirm it has ended its programs to develop chemical, biological
and nuclear weapons.

Almost all of those inspections have been halted since 1998, when the U.N.
inspection team pulled out of Iraq ahead of U.S.-British bombings. It has
not been allowed back since.

The Vienna-based International Atomic Energy Agency, however, has continued
its inspections focusing on Iraq's nuclear capabilities. Last year it said
in a report that it couldn't be sure that Iraq wasn't rearming.

Ahmed Abu Zahra, head of the four-man IAEA team, said that in its latest
visit, "everything went well, we found good cooperation from our
counterparts in Iraq and from the Iraqi Atomic Energy Organization."

But he refused to comment when asked whether the group had found evidence
Iraq was rehabilitating its nuclear weapons facilities.

Abu Zahra said the team had inspected and measured nuclear material
containing low enriched, natural and depleted uranium. He said the data
collected would be further analyzed and the results made public later.

In talks with the United Nations scheduled to begin Feb. 26, Iraq is hoping
to move toward ending the sanctions, while the United Nations will push for
the return of weapons inspectors. Iraq has demanded that sanctions be lifted
immediately, saying it has rid itself of its weapons of mass destruction.

U.S. intelligence reports suggest that Iraq has been rebuilding plants
capable of producing chemical or biological weapons -- a claim Iraq denied
Tuesday, calling it the "first lie" of the newly-inaugurated administration
of President Bush.

Iraqi Oil Minister Amer Mohammed Rashid said U.N. experts would arrive in
mid-February to discuss plans on boosting Iraq's oil exports with the $530
million authorized by the U.N. Security Council in December.

Rashid said Baghdad wants rebuild a pipeline though Syria and build a new
one through Jordan.

Iraq exports its oil from two terminals approved by the United Nations: the
southern terminal of Mina al-Bakr on the Persian Gulf and Turkey's Ceyhan
terminal on the Mediterranean.

Iraq has begun work on its side of a pipeline to Jordan's Red Sea port of
Aqaba, but the Jordanians have yet to start building their side of the
pipeline. A pipeline through Syria to a Lebanese port on the Mediterranean
lays idle.

Times of India, 25th January

BAGHDAD, Iraq: Iraq has indicated it will work with UN experts on improving
its ailing oil industry, using money earned from the oil-for-food programme.

"We are expecting a UN team of technical experts to arrive in mid-February
to negotiate with Iraq on how it plans to spend 600 million euros ($ 530
million) approved by the United Nations on local expenses," Oil Minister
Amer Mohammed Rashid said in remarks published by the government daily
al-Jumhuriya on Tuesday.

"Plans are set up to boost Iraqi oil exports by opening new means to export
it," he said. "That includes the rehabilitation of the Iraqi-Syrian oil
pipeline and the establishment of an Iraqi-Jordanian pipeline."

The United Nations has told Iraq in a letter that a seven-member team was
ready to travel to Baghdad to discuss how to spend the $ 530 million on
upgrading oil facilities. Speaking at UN headquarters in New York on
Tuesday, spokesman Fred Eckhard said the Office of the Iraq Programme, which
sent the letter in January, had not yet received word from Iraq that the
team would be welcome.

Under the four-year-old UN oil-for-food programme, Iraq is allowed to sell
oil, provided the money goes for food, medicine and other humanitarian
supplies and equipment to rebuild its oil infrastructure. The programme was
launched in 1996 to help Iraqis cope with sweeping UN sanctions imposed to
punish the country for its 1990 invasion of Kuwait.

In December, the UN Security Council extended the programme for six months
and asked Secretary-General Kofi Annan to make arrangements to let Iraq use
up to $530 million in oil for-food money to pay for maintaining and
improving the country's oil industry. The council also increased funds for
humanitarian programmes.

Meanwhile, a report by the Office of the Iraq Program distributed in Baghdad
on Wednesday said the UN sanctions Committee has approved oil prices
proposed by Iraq, ending a dispute over the issue and charges that Iraq was
selling its crude at a discount in order to collect a surcharge from buyers
to be deposited in an Iraqi account outside UN supervision.

Iraq says it needs the money to meet overhead expenses.

The report did not say when the Sanctions Committee approved the prices or
specify the prices.

Iraq exports its oil from two terminals approved by the United Nations: the
southern terminal of Mina al-Bakr on the Gulf and Turkey's Ceyhan terminal
on the Mediterranean. Iraq has two other idle pipelines, one to Lebanon's
northern port city of Tripoli and one through Saudi Arabian territory to the
Red Sea port of Yanbu. Iraq has begun work on its side of a pipeline to
Jordan's Red Sea port of Aqaba, but the Jordanians have yet to start
building their side of the pipeline.

Oil will be one of the main issues to be discussed when Iraqi Vice President
Taha Yassin Ramadan begins a visit to neighbouring Syria in the next few
days. His visit will follow an offer made on Tuesday by the Bush
administration to permit Syria to help Iraq export its oil provided the
revenue was used under the provisions of the oil-for-food programme.

Syria would have to make the request to the UN sanctions committee to
designate the 893 km pipeline as an authorised export route under the
programme, State Department spokesman Richard Boucher said.

The pipeline runs from Iraq's northern Kirkuk oil fields to the
Mediterranean port of Baniyas. According to an account in The Los Angeles
Times, the pipeline was opened in mid November and is generating at least $2
million a day in illicit funds for Iraq.

Iraq has denied similar accusations in the past, saying the pipeline, closed
nearly 20 years ago, has not been fully rehabilitated.

While in Syria, Ramadan is due to sign a free-zone agreement similar to one
he concluded with Egypt during his visit to Cairo last week. (AP)

Times of India, 25th January

BAGHDAD: The United Nations and Iraq are preparing a new aid distribution
plan for the latest phase of the oil-for-food programme, the UN aid
coordinator Tun Myat said on Wednesday.

The joint coordination committee, which is co-chaired by the United Nations
and the government of Iraq, met Sunday "as part of the ongoing preparations
to conclude the distribution plan for phase nine of the humanitarian
programme," Tun Myat said.

The Iraqi cabinet called the same day on the United Nations to give the
green light to Iraqi financial assistance to the Palestinians and to
impoverished Americans.

Baghdad says it has set aside aid of one billion euros (940 million dollars)
for the Palestinians and their uprising against Israel and has also offered
100 million euros ($94 million) to poor US citizens.

The United Nations has so far failed to approve the Palestinian aid, but
noted that the oil for-food programme was designed to benefit Iraqis only.

"So far, there has not been any notification of approval by the Security
Council," Tun Myat said on Tuesday.

"My understanding is that there has been no agreement because some Security
Council members said the original oil-for-food resolution was primarily
meant for the benefit of Iraq," he said.

The matter had been discussed by the UN sanctions committee and passed on to
the Security Council.

Iraq, which has been under an embargo since it invaded Kuwait in 1990, is
allowed under the oil-for-food programme to export a limited amount of oil
in exchange for food and other basic necessities.(AFP)

Dubai, Reuters, 23rd January

Iraq appears to be enlisting some little-known companies to boost United
Nations supervised oil sales towards its two million barrels per day (bpd)
export target, industry sources said yesterday. Still absent from the Iraqi
contract roster are major European oil companies which have lifted oil
directly from Baghdad since the UN oil-for-food deal began in late 1996.

Baghdad's export flows have been patchy since December after Iraq asked
customers to make a cash payment outside the United Nations escrow account,
industry sources said. Iraqi oil sales had been running at about 2.3 million
bpd in late November. While some customers claim Baghdad has eased its
payment condition, others insist Iraq is still sticking to demand for an
unauthorised surcharge demand of about 40 cents a barrel.

Iraqi oil officals said last week that Baghdad had lined up enough customers
to push loadings considerably beyond recent levels of about one million bpd
by the end of this month. Industry sources said Iraq may meet its target,
but some market players - pointing to still-sketchy liftings of Kirkuk grade
- regarded the two million bpd level as wishful thinking.

Iraqi Kirkuk exports finally have started rolling for the first time this
year from the Turkish Mediterranean port of Ceyhan, with the Super Lady due
to sail yesterday. Two other tankers - the Amazon Falcon and the Sea Dancer
- were sighted in the area, industry sources said. The Basrah Light
programme at the Iraqi Gulf port of Mina Al Bakr was more fleshed out, with
flows there expected to be steady at roughly one milion bpd, market sources

Meanwhile, Vietnam is holding talks with Iraq's Oil Ministry to buy Iraqi
crude oil under an oil-for-food deal with United Nations, an Iraqi oil
industry source said yesterday. "A team of Vietnamese oil experts from
(state oil company) Petrovietnam are negotiating with the Iraqi oil ministry
to lift more Iraqi oil under the MOU (memorandum of understanding) with the
United Nations," the source told Reuters. The source did not say how much
oil Vietnam wanted to lift under the current phase nine of the oil deal.

He said Vietnam had lifted a total of 15 million barrels of Basrah Light
during the previous phase eight of the oil pact which allows Iraq to sell
unlimited quantities of oil over six months to buy food and medicine for the
Iraqi people. The Vietnamese experts are part of a big trade delegation
headed by Deputy Prime Minister Nguyen Cong Tan which arrived in Baghdad on

Nguyen delivered a letter from President Tran Duc Luong to Iraqi President
Saddam Hussein during a meeting on Saturday. Vietnam's oil company
Petrovietnam is also tipped to sign a deal with Iraq to develop the Ammara
oilfield with a projected capacity of 80,000 barrels per day (bpd) and at a
total cost of $300 million. Iraq maintains good commercial links with
Vietnam and trading between the two states is being done under the
oil-for-food deal with United Nations.

CNN, January 24, 2001

NEW YORK, Jan 24 (Reuters) -- The United Nations has found itself unable to
pursue oil firms paying illegal surcharges for Iraqi crude, saying
investigations of alleged sanctions violators are up to individual

"Compliance is expected from the buyers," a U.N. official said on Wednesday,
speaking on condition of anonymity. "If there is a violation -- if it's
among the oil buyers -- it's up to their governments to take action."

This leaves open the possibility that any oil firm paying Iraq's
under-the-table oil surcharge could get away with it, according to industry

"Paying a surcharge is hard to prove, particularly when Iraq is dealing with
sort of smaller, lesser known traders who come from countries that don't see
eye-to-eye with the United States on sanctions," said Raad Alkadiri said of
the Petroleum Finance Co. in Washington.

Iraq's U.N.-sponsored oil sales are now picking up again after disruptions
since December 1, when customers balked at buying oil after Baghdad asked
for a 50-cent-per-barrel surcharge payment outside U.N. control.

Iraq has enlisted a number of little-known companies to boost oil sales
toward its two million barrels per day export target, fueling debate in
international oil markets whether any are paying the surcharge.

Companies buying Iraqi crude have denied paying up, but even if there were
under-the-table payments, the lifters could easily escape punishment.

And if a violation does surface, it is debatable whether a divided U.N.
Security Council would act.

While the United States, along with Britain, is the staunchest supporter of
Iraqi sanctions, France, Russia and China favor a softer line.

"It depends on the violation," Alkadiri said. "There are clearly differences
among the (Security Council members) on what constitutes violations and how
serious those violations are. That makes it difficult to envisage concerted
action against sanctions busters, including Iraq."

The most likely penalty, suggested a European diplomat, for any company
punished for breaking sanctions was revoking or suspending its right to buy
Iraqi crude. International oil majors BP Amoco Plc and Exxon Mobil Corp.,
which have recently purchased Iraqi crude using trading houses as middlemen,
say that third-party suppliers have not paid Iraq's surcharge.

Authorities in their own countries have been kept fully informed, the oil
companies add. Iraq's resumption late last year of oil exports to Syria, in
violation of U.N. sanctions, has highlighted the problem to control oil

The United States says it is still investigating reports that Syria has been
selling crude on behalf of Iraq via the pipeline between the two countries
since November, despite reports from oil analysts on increased Syrian oil
exports. Both Britain and the United States have tried to raise the issue in
the council's committee monitoring Iraqi sanctions.

But France and others have said the controversy needed to be discussed in
light of smuggling in general, including lines of Iraqi tankers traveling to
Jordan and Turkey. Iraq, under a December 1999 council resolution, is
permitted to open a pipeline to Syria, providing it or Damascus applies
officially and does so under U.N. oversight. Washington has said it would
support a request by Syria.

Under the U.N.'s oil-for-food humanitarian program, Baghdad is allowed to
sell unlimited quantities of oil under U.N. supervision in exchange for
food, medicine and many other supplies, including oil equipment.

Dubai, Reuters, 24th January

U.S. oil companies are playing a leading role in Iraq's oil export revival
despite Washington's entrenched hardline stance towards Baghdad, industry
sources said yesterday.

"It's astounding. Washington is making the loudest noise over Iraq and yet
the U.S. remains the principal destination for Iraqi barrels," said an oil

"And most European oil majors whose governments have the most liberal
attitude towards Iraq are refusing to touch the stuff." Iraq's United
Nations-sponsored oil sales have been patchy since December, when customers
balked at lifting oil after Baghdad asked for a 50 cent per barrel surcharge
payment outside UN control.

But Baghdad has now secured enough lifters to double exports to about two
million barrels per day (bpd) by the end of this month, with most of that
oil destined for the United States, market sources said.

Iraq barred U.S. firms from lifting its barrels directly in 1997, but
American companies at the end of last year were importing some 750,000 bpd,
using oil trading houses as intermediaries, a practice that is legal.

U.S. imports are climbing towards that mark again as major oil companies -
including super majors ExxonMobil and BP - insist that their third party
suppliers have escaped Iraq's surcharge payment, industry sources said.

"We have got assurances from the seller that there were no surcharges paid,"
a BP spokesman told Reuters on Tuesday. "We've kept both the UN and the DTI
(Britain's Department of Trade and Industry) here informed exactly of what
we've been doing."

Market sources say BP has purchased two cargoes of Basrah Light crude
destined for the United States. A recently sold shipment of Kirkuk crude,
typically sold in the Mediterranean market, is also rumoured to be heading

Another buyer said his company had examined the supplier's original contract
and was dealing with companies with proven track records.

"Anyone lifting Iraqi oil has carried out thorough checks to ensure that the
supplier has not paid any cash into an Iraqi account," said an oil
executive. "And it is our belief that some oil is being made available with
no surcharge attached."

The decision by Exxon Mobil, renowned for its conservative approach to
business, to lift Iraqi barrels starting in late December may have
encouraged other majors to make the leap, industry sources said.

"Maybe they (Exxon Mobil) feel it is a pretty low risk move," said a market
source. "I'm sure they've put their top lawyers onto it." At least three
other U.S. companies are also said to have purchased Iraqi Basrah Light
barrels indirectly through suppliers, industry sources said.

Exxon Mobil declined comment, saying only that its purchases of Iraqi crude
have always been transparent and fully documented. Other U.S. firms had no
initial comment. But some other oil majors remain loath to buy Iraqi crude.

"We still are not comfortable taking Iraqi barrels, no matter what evidence
is provided that a fee is not being paid," said an end-user that has been a
regular buyer of Iraqi crude. "The word from Baghdad is that they are
sticking with the surcharge demand."

The going rate for Basrah Light had been a 50-60 cent premium over the
official selling price (OSP) - which had given some purchasers a pause as it
was theoretically wide enough to allow the lifter to pay a surcharge and
still show a profit.

"That leads us to believe that a surcharge was still involved," said an
industry source. Others counter that the premium being charged in the market
for Iraqi oil has primarily ranged between 15-60 cents over the OSP since
the start of the U.N. oil-for-food deal in late 1996.

And purchasers' attitudes could soften if the asking price is lowered, as it
was for Kirkuk crude into Europe. Earlier this month, offers on Kirkuk at
50-60 cents over the OSP were shunned by potential buyers. But once those
offers slid to OSP +25/30 cents, buyers stepped up.

For their part, many European oil majors say Baghdad has not dropped its
demand for a surcharge payment, but some said that the request has been
softened to 25-cents per barrel for Kirkuk grade, which heads primarily into

"Regardless of how much the surcharge is reduced, there is still a small
matter called principle," said a European industry executive.

London, Reuters, 26th January

Iraq may be able to manoeuvre around United Nations restrictions to boost
oil revenues but faces an even tougher hurdle to the market - dismal
refining margins. Loss-making profit margins are denting demand for Iraq's
key Kirkuk crude in the Mediterranean market just as it moves to revive
exports, patchy since December when customers refused to pay Baghdad a
surcharge in violation of UN sanctions.

Some European oil majors now seem prepared to buy Iraqi crude from oil
trading houses as long as they are assured that no illegal surcharge
payments have been made. But the crude has proved tough to sell on the spot
market, industry sources said.

Mediterranean refining margins have swung into a loss of 83 cents a barrel,
compared to an average $3.58 profit over the last year, Reuters data shows.
Russian Urals, currently selling at $1.20-$1.25 a barrel under dated Brent
cif Augusta, is posing a strong challenge to Kirkuk which has an official
selling price of Dated Brent -$3.00 a barrel. Traders assess spot Kirkuk at
around 15 to 30 cents over the OSP.

"Margins are going to be quite depressed. At the end of day, with Urals
where it is, I can't see Kirkuk competing at these current levels," said one
refinery buyer. "If Urals falls further, nobody will even touch Kirkuk. I
expect Urals to fall in value over the next few days due to poor refining
margins." But market players are well aware that market maverick Iraq has a
number of options up its sleeve to lure in more buyers.

Baghdad could ask the United Nations to lower the official price of Kirkuk
price as it has done before. "If the Kirkuk price is cut, then the whole
market equilibrium changes," said a trader from European major. Iraq also is
eyeing a fuel-hungry U.S. market to ship oil it cannot flog in the
Mediterranean. Traders said at least one very-large-crude-carrier (VLCC) was
sold into the U.S. market while a Mediterranean trading firm was seeking
offers for another VLCC of Kirkuk.

Kirkuk, which does not regularly appear in the U.S. market, failed to secure
buyers in the Mediterranean, traders said. Iraq, which has been looking to
little-known trading companies from countries like Malaysia and Namibia to
boost its exports, hopes European firms will become customers despite the
sensitive surcharge issue.

But some companies remain nervous as Iraq moves to boost oil sales back up
to two million barrels per day (bpd) by the end of January after they
slumped below one million bpd. "We don't want it to appear in the papers
that we are helping the regime of Saddam Hussein do what it wants to do. It
all depends on whether my lawyer is comfortable," a trader said. "The Iraqis
are selling to unknown companies. It gets to the end users eventually but
they are not securing any big customers right now.",3604,426691,00.html

by Ewen MacAskill and Brian Whitaker
Guardian, January 23, 2001

The Iraqi leader, Saddam Hussein, has rebuilt three factories which are now
capable of producing chemical weapons, the US and Britain claimed yesterday.

The disclosure is intended to step up pressure on Baghdad and signals a new
hard line as George Bush begins his presidency. The US and Britain are
trying to shore up efforts to contain President Saddam after the steady
demolition of their trade embargo by Arab and European states.

Similar intelligence reports formed the basis for the Desert Fox bombing
raid by the US and Britain two years ago.

Foreign Office diplomats have been in Washington in the last week discussing
Iraq and other foreign policy issues with the new administration. An FO
spokesman said: "The general assessment that Iraq may be reconstituting
biological and chemical weapons is one we share."

But the Foreign Office and US state department were careful to avoid saying
they had proof, as this would automatically trigger new air raids.

The claim comes just 10 days after the Pentagon made public an intelligence
assessment of the threat posed by the proliferation of weapons worldwide.
Its report said Iraq "shows no let-up in its pursuit to reconstitute its
pre-war weapons and missile capabilities".

According to the new reports, one rebuilt factory is using a mash made from
castor beans that contains a deadly biological toxin called ricin. The
Iraqis claim the castor oil is used for brake fluid. Another produces
chlorine, which is used for nuclear production and for cleaning water.

George Galloway, the Labour MP who has been leading the British campaign to
have sanctions against Iraq lifted, said yesterday: "There is a long
campaign of misinformation about the purpose of factories as a prelude for
US attacks."

He described the latest reports as propaganda "to justify the increasingly
unjustified siege of Iraq".

The US and the Foreign Office stressed that the reports were from officials
in the old administration and should not necessarily be taken as an insight
into Mr Bush's approach.

The UN secretary general, Kofi Annan, is planning to meet Iraqi ministers
next month to discuss lifting sanctions in return for allowing in UN weapons

Although the UN weapons team, Unscom, has not been allowed into Iraq since
December 1998, the International Atomic Energy Agency, a nuclear
proliferation watchdog, has been allowed to continue with less intrusive

The IAEA is this week carrying out its annual inspection of nuclear material
in Iraq. Four inspectors - from Egypt, Poland, Russia and South Africa - are
visiting the Tuwaitha nuclear centre, 12 miles south of Baghdad, to check
that low-grade material, sealed in 1998, has not been touched.

The centre was the main site for Iraq's nuclear programme before the Gulf
war and is the location of the Osiraq reactor, bombed by Israel in 1981.

David Kidd, the IAEA's spokesman in Vienna, said the inspectors were
carrying out tests to determine the quantity and quality of material stored.

"It's a thorough check, but no replacement for what the [UN] security
council would like to have us do," he said.

Several Iraqi defectors have claimed that President Saddam is continuing to
develop a bomb. Salman Yassin Zweir, an engineer who was said to have spent
13 years working for the Iraqi atomic energy commission, said recently that
work resumed in secret in August 1998.

The American estimate is that it would take Baghdad at least five years to
build nuclear weapons.

CNN, January 24, 2001

BAGHDAD, Iraq (Reuters) -- Iraq Wednesday dismissed as groundless a New York
Times report that the country was still capable of manufacturing weapons of
mass destruction.

"Iraq does not possess any weapons of mass destruction or have any
capability to manufacture them," the official news agency INA quoted Husam
Muhammed Ameen, the director-general of the National Monitoring Department,
as saying.

"The defunct (U.N) special commission knows this fact very well because it
supervised the destruction of the equipment and buildings which had escaped
destruction during the 30 state aggression," Ameen said, referring to the
1991 U.S.-led Gulf War to oust Iraqi forces from Kuwait.

"The commission also knows that Iraq has met all the requirements of
destruction including unjust ones and sacrificed many of the buildings and
equipment for which there was no scientific or technical justification for
destroying them," he said.

Iraq was responding to a New York Times report Sunday that Iraq had rebuilt
three factories in an industrial complex west of Baghdad that had been
closely monitored by U.N. weapons inspectors on suspicion of producing
chemical and biological agents.

The newspaper said the factories were plants manufacturing products for
civilian use, but also capable of producing vital compounds and toxins for

Ameen said the installations that the Times referred to were of a civilian
nature without the capacity to carry out chemical and biological activities.

"It has become clear that installations which they are trying to portray as
factories of weapons of mass destruction are in fact civilian installations
that produce chloride for water treatment and agricultural pesticides," he

Ameen added that the "allegations and claims they are trying to circulate
lack hard evidence and are no more than a fabricated suspicion based on
flimsy probabilities."

"The allegations ... reflect frustration and bankruptcy suffered by some
American departments," he said.

by Anton La Guardia in Baghdad and Ben Fenton in Washington
Daily Telegraph, 24th January

THE Foreign Office said yesterday that it shared American fears that Saddam
Hussein has rebuilt factories capable of producing chemical weapons.

The claim came amid signs that the new US administration is considering a
tougher policy towards Baghdad. With Baghdad scoring almost daily successes
against its international isolation, President Bush is coming under pressure
to deal with Saddam's weapons of mass destruction and fulfil his campaign
promise to "take 'em out".

Mr Bush has been presented with intelligence evidence that Saddam has
rebuilt factories which could already be producing chemical and biological
weapons. Richard Perle, a senior fellow at the American Enterprise Institute
and assistant secretary of state for defence under Ronald Reagan, said
yesterday that he believed the Bush administration would seek to support
Iraqi opposition groups.

He said: "We are simply losing this now. If you saw the parade marking the
anniversary of the end of the Gulf war, Saddam had a thousand tanks going
through Baghdad. When the war ended, he had 300. Sanctions have collapsed
and are a failed policy. We need to get the Iraqi opposition back into
northern Iraq, where they can be effective in providing an alternative to

A diplomatic source in Washington agreed that the Bush administration, which
in Vice President Dick Cheney and Colin Powell, the Secretary of State, has
two of the men who defeated Saddam in 1991, would look for a radical
approach in dealing with Iraq.

American intelligence reports, confirmed by Britain, say Iraq has repaired
"dual-use" factories bombed by the US air force and the RAF in 1998 after
United Nations inspectors pulled out of Iraq. But they stopped short of
saying that Saddam has acquired new weapons of mass destruction.

Baghdad has so far ignored the American claims, preferring to rebuild its
political and economic ties in the region and erode the 10-year-old
international sanctions. Vice-President Taha Yassin Ramadan is expected to
visit Damascus this week to conclude a free-trade agreement similar to one
reached with Egypt recently.

Egypt and Syria were key members of the US-led alliance against Iraq,
providing vital Arab political cover to the American-led campaign to evict
Iraqi forces from Kuwait. But Arab countries are drawing closer to Baghdad,
pushed by a popular feeling that sanctions have gone on long enough and
attracted by Iraq's growing economic power as a result of high oil prices.

Iraq has become one of Egypt's biggest export markets, while Syria stands to
make good profits by importing cheap Iraqi oil through a 552-mile pipeline
that is being refurbished.

Last week Turkey, a close American ally long involved in smuggling goods to
Iraq, upgraded its relations with Baghdad by appointing an ambassador
despite protests from Washington. Several Western countries, especially
France, have re-appointed diplomats to head high powered "interests
sections" in Baghdad.

CNN, January 21, 2001

BAGHDAD, Iraq (Reuters) -- Iraq will soon sign a free trade agreement with
Syria similar to that signed with Egypt last week, Iraq's Deputy Prime
Minister Tareq Aziz said on Sunday.

"We are going to sign a similar agreement with the Syrian leadership," Aziz
told reporters.

Iraq, still under U.N. sanctions for its 1990 invasion of Kuwait, signed a
free trade agreement with Egypt on Thursday during a rare visit to Cairo by
Iraqi Vice-President Taha Yassin Ramadan.

The agreement, which needs to be ratified by Egypt's parliament, was
expected to boost Egyptian exports to Iraq to $1 billion a year.

Aziz did not say whether he or other Iraqi official would travel to Syria to
sign the agreement or if Syrian officials would come to Baghdad.

Ties between Syria and Iraq, ruled by rival factions of the Baath Party,
were broken because of differences over Iraq's 1980-1988 war against Iran
and invasion of Kuwait in 1990.

Syria sided with Tehran during the Iraq-Iran war and joined a U.S.-led
multinational force that drove Iraqi troops out Kuwait in 1991.

But the two countries reopened their borders and started economic
cooperation nearly three years ago within the framework of Iraq's
oil-for-food program with the United Nations.

Earlier this month Syria removed restrictions on its citizens travelling to
Iraq, the latest sign that ties between the two neighbours are improving
after nearly two decades of animosity.

Baghdad and Damascus also want to reopen an oil pipeline between them,
disused since 1982.

The office of Iraqi Airways in Damascus, closed since the beginning of the
1980s, was reopened nearly two months ago while several Syrian planes have
landed in Baghdad in defiance of the U.N. sanctions.

Sunday Times, 21st January

THE Pope plans to visit Iraq by the summer despite opposition from Britain
and the United States, which fear he will hand a propaganda coup to Saddam
Hussein, writes John Follain.

Last week Vatican sources said a team would soon begin preparing Pope John
Paul II's pilgrimage to the birthplace of the prophet Abraham in the ancient
town of Ur, near the southern city of Basra.

The visit was called off a year ago, when Baghdad said "abnormal conditions"
made it impossible. Iraq blamed the United Nations embargo and British and
American air attacks, but there was also resistance within Saddam's regime
to the visit.

That resistance has weakened in recent months as Iraq has attracted some
international support for an end to sanctions.

Officials in Baghdad are thought to accept that the Pope's presence could
help their case against the embargo.

A British diplomatic source said airstrikes in southern Iraq's no-fly zone
would be suspended for a papal visit to Ur, but warned that any meeting with
Saddam would be manipulated by the dictator. "The visit is completely
inappropriate because Saddam is sure to exploit it politically," said the

Last week the 80-year-old Pope, who condemned the 1991 Gulf war and has
criticised subsequent UN sanctions, named a new nuncio, or papal envoy, to
Baghdad. In a sign of warming relations with Iraq, he also approved the
election of four bishops of the Chaldean Catholic community in the capital.

He is expected to fly to Baghdad and travel from there by helicopter to Ur.

The Pope originally meant to visit Iraq, where 1m in a population of 17m are
Christians, as part of "an exclusively religious" millennium pilgrimage to
the Bible lands.

Although Vatican officials insist there is no guarantee that the Pope would
meet Saddam in Iraq, protocol dictates that he should do so - and he has
rarely visited a country without meeting its head of state.

Times of India, 22nd January

BAGHDAD: Iraq and Syria are to hold a meeting in Baghdad next week on an
arrangement to share the waters of the Euphrates River, to which Turkey is
also invited, an official newspaper reported on Sunday.

Irrigation Minister Mahmud Diab al-Ahmad, quoted by Al-Ittihad newspaper,
said the meeting would take place during a visit by his Syrian counterpart
Taha al-Atrash, who is expected in Baghdad on January 27.

"Turkey will also be invited to take part," Ahmad said, while noting however
that Ankara had in the past boycotted such meetings.

The Iraqi minister already said last month that Baghdad and Damascus had
reached an agreement that he was to finalise with Atrash.

But efforts to reach a three-way deal with Turkey, where the Euphrates
originates, were not making headway because of Ankara's "intransigence," the
Iraqi minister said.

Ankara rejects charges from Baghdad and Damascus that it is monopolising the
Euphrates and Tigris by building more than 20 dams. Both rivers rise in
Turkish mountains and join together in southern Iraq before flowing into the
Gulf. (AFP)

Avanova, 23rd January

The number of asylum-seekers from Iraq more than trebled last year, Amnesty
International says.

Amnesty figures - based on Home Office statistics - show there are more
asylum applications from Iraq than from any other country.

But people fleeing Saddam Hussein's regime are not always given a
sympathetic welcome by the Government, the human rights group says.

The number has increased from 1,800 in 1999 to 6,410 from January to
November 2000.

The Home Office has declined to comment ahead of the publication of official
figures on asylum-seekers for 2000, due on Thursday.

Amnesty suggests that the Government's tough stance might be partly
responsible for the surge in asylum applications.

"Although the majority of Iraqi asylum-seekers in 2000 were given permission
to stay in the UK, the Home Office has been turning down many recent
applications without even considering them as they fail to meet bureaucratic
criteria," a spokesman for Amnesty says.

The spokesman says Britain has made "great play" of the persecution of Iraqi
civilians, adding: "You have to wonder if the very strong position the
Government has taken has contributed to these statistics.",3604,426697,00.html

by Jason Burke in Baghdad
Guadrian [SIC. Good to see old traditions are being maintained on the Net ­
PB], 23rd January

It is winter in the Iraqi capital and the film halls are packed. With
President Saddam Hussein's regime in its 22nd year, and more than a decade
since the start of the trade embargo, there is a need for escapist

The latest film to capture the public imagination is a movie by Abdul Salam
al-Adhami, one of Iraq's most famous directors and actors, which is due for
release this week.

It is an epic about the Gulf war, one of a series of full-length feature
films that the government has prepared for the 10th anniversary of the "Um
al-Mar'rik" (Mother of All Battles), as the war to expel Iraq from Kuwait is

Mr al-Adhami's film, which was shot in the desert using Iraqi soldiers as
extras, tells the story of a unit of conscripts from Baghdad who are buried
alive by allied troops during an attack by the US-led forces.

"This is one of the most horrible war crimes of our time and it was carried
out by American troops," he said. He added that he was inspired by a CNN
documentary in which American soldiers admitted bulldozing trenches full of
surrendering soldiers during the rapid advance into Kuwait.

The film, called Hafr al-Batm after the area of desert where the massacre is
alleged to have occurred, starts with a local bedouin who, after noticing
how vultures gather over a certain patch of sand, investigates and unearths

The movie also shows British soldiers shooting dead Iraqi prisoners of war.

Mr al-Adhami said his film is aimed at a global audience. "The Americans
always say that they are defending human rights and international law and
norms. In my film we see that they are the first people to break those

Such rhetoric is commonplace in Iraq. Another government-sponsored film
under production gives Baghdad's version of the story of the Bravo Two Zero
SAS patrol. The writers of the screenplay have seen a pirated copy of the
British film of Andy McNab's book and have interviewed Iraqi soldiers who
were captured by the British special forces. The hero is an NCO called Adnan
who is taken prisoner. He is shown being mistreated by British soldiers.

A third film is based on the "turkey shoot" on the road to Basra at the end
of the conflict, when thousands of Iraqis fleeing Kuwait were bombed and
killed by allied warplanes.

Baghdad is undergoing a cultural renaissance. At the al-Rasheed national
theatre last week an avant-garde psychological thriller - again based on the
war and funded by the government - premiered.

A year ago President Saddam decided that the mostly light-hearted farce that
had comprised new Iraqi theatre since sanctions were imposed in 1990
undermined the nation's dignity, and ordered weightier productions to be

Drama is not the only thing changing in Baghdad. There has been a surge of
economic development. Trade fairs in the city are packed by foreign firms.
Overseas diplomats and businessmen throng the lobbies of five-star hotels,
and the newly reopened Saddam airport is busy with flights from throughout
the Middle East - all banned by UN sanctions.

Meanwhile, Mr al-Adhami's Gulf war film seems set to be a hit. Like many
Iraqis, he seems convinced that the Mother of All Battles resulted in
victory for Baghdad.

"My film will set the record straight," he said. "I am proud to have been
born here in the heart of the Arab homeland. Now it is time to tell the
story of how we won the struggle."


BAGHDAD, January 24 (Xinhuanet) -- Iraq sent a letter of protest 
to FIFA after being told they must play all their World Cup soccer
preliminary matches in Kazakhstan.

Worrying that the venue change will give Kazakhstan home 
advantage, the Iraqi Football Association has called on FIFA to 
overturn the decision.

The group six which includes Nepal, Macau, Kazakhstan and Iraq 
was initially due to be held over five days in Kathmandu between 
March 25 and 29.

But Iraq said they had been informed by the Asian Football 
Confederation on January 19 that the ties would now take place in 
Kazakhstan between April 21 and 25.

Iraq and Kazakhstan will be the top two favorites in the group.

Iraqi official Hussein Mohammed said in a letter to FIFA 
general-secretary Michael Zen Ruffinen that AFC had informed them 
FIFA was responsible for the venue switch, but neither body was 
immediately available for comment.

Iraqi officials asked for the matches to be played on a home- and
away basis or for the games to be played in a neutral venue,  Jordan.

Las Vegas Sun, 24th January

LINCOLN, Neb. (AP) -- In one of her final acts in office, Attorney General
Janet Reno lifted restrictions on travel and employment against five former
Iraqi military officers who were thought to be a threat to U.S. security.

The men took part in a CIA effort to overthrow Saddam Hussein and were among
6,500 Iraqi dissidents brought to the United States after the Persian Gulf

But after arriving in California in 1997, the five were jailed for 2 1/2
years by the Immigration and Naturalization Service on suspicion of being
double agents for Saddam.

They were eventually released and allowed to settle in Lincoln with their
families. But they were not allowed to travel outside their county and had
to stay home at night and maintain daily contact with the INS. They also had
to get approval for employment and could be deported to a third country with
two weeks' notice.

In Washington, INS spokesman Russ Bergeron said Reno decided last Friday to
relax the restrictions.

The men's lawyer, Niels Frenzen, said that the former officers can now
travel anywhere in the United States and do not need INS approval for
employment. The deportation provision is still in effect, he said.

A sixth Iraqi man who also worked to overthrow Hussein remains under the
previous restrictions in Lincoln, Frenzen said. Reno did not indicate why,
he said.

Chart Attack, Tuesday January 23, 2001

If anyone is trying to get in touch with Chart Magazine's current Stylin'
model you may have to leave a message.

Chantal Kreviazuk is currently in Iraq working on a documentary entitled
War2Music. She's in the Middle East with her tag-along husband Raine Maida,
who is taking time out from his little dispute with Matthew Good to join her
in making the documentary. The movie is being made to support kids living in
war torn areas such as the Middle East, Thailand and Africa.

The War2Music project connects artists such Kreviazuk along with fellow
Canadians the Rascalz and Moist frontman David Usher, with youth in a
peace-building effort to help people who are affected by war around the

You can catch Chantal on the tube and on the Net. The War2Child flick is
being aired on MuchMusic some time in the near future. You can also catch a
simultaneous webcast of the program on the website.

The newly weds recently returned to Baghdad after visiting the supposed site
of the Garden of Eden. "I am amazed by the ability of humans to connect
deeply on the most basic of levels," Chantal said in her diary entry for
today on the website. "After spending some time in the alleged Garden of
Eden, the Tree of Life ain't looking so good! The only verbal exchange I had
was with four beautiful little girls, we shared our names. They called me
Shanshoa. It's overwhelming to me."

You can get regular updates through Kreviazuk's journal on the website or
through the official Chantal Kreviazuk website. [URL not given but a search
might do the trick ­ PB]


Athens, Jan 24, IRNA -- Egypt is still not planning to make a positive
response to a long standing Iraqi request to re-operate commercial flights
between Cairo and Baghdad.

"It is still early to decide on this matter," an Egyptian diplomatic source
told Egyptian English-language newspaper Al-Ahram Weekly.

Egypt, which has just signed a free trade agreement with Iraq earlier this
week, appears to be apprehensive.

The political implications of such move in and out of the Arab world are
still being carefully weighed.

"What Egypt is mostly interested in is to restore Iraq to the Arab fold
where it rightly belongs. Any moves are weighed against this objective," a
senior diplomatic source in Cairo told the Weekly.

With this objective in mind, Egypt has expressed concern over provocative
statements that were made in Baghdad against Kuwait earlier this month by
senior Iraqi political figures.

Egyptian Foreign Minister Amr Moussa has pleaded with Iraq to avoid
antagonising its Arab neighbours.

"We think it is in the interest of Arabs to look ahead and turn a new page.
Therefore, nobody needs to rub old wounds at this time when there are
intensive efforts to restore Arab unity, '' said Moussa.

Arabic News, 26th January

The executive committee of the foreign relations in Turkey has appointed
Muhammad Ali Neizi as the chairman of the Turkish side at the Turkish -
Iraqi joint labor council with the aim of developing economic and trade
relations between the two countries.

Meantime, Turkish sources said that the Turkish third products exhibition
will be held in Baghdad in May and includes textile and food products and
building materials and machinery.

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