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News, 4/3-10/3/01 (1)

News, 4/3-10/3/01 (1)

The only news that seems to stand out this week is the ongoing question as
to whether China has broken sanctions by helping the Iraqi forces shoot down
pilots who are violating Iraqi air space. The question seems to show a
surprising ignorance of the first principle of international law: which is
that international law cannot possibly be broken by any permanent member of
the Security Council. China has the same rights in this respect as the US,
Britain, France and Russia. It is no more, or less, in violation of any
principle of international law than the US (and Britain, insofar as Britain
can be counted as having its own mind on this or any other matter) when it
unilaterally imposed the no-fly zones in the first place.


*  Cheney softens demand for Iraqi inspections
*  Powell Says Arabs Will Favor U.S. Plans for Iraq
*  Powell expands list of facilities in Iraq that may be bombed
*  U.S. rethinks patrols of Iraq no-fly zones


*  U.S. blockages of Iraqi supplies rapped at UN
*  UN seeks Iraq co-op in northern region
*  UN again delays oil experts' trip to Baghdad
*  Iraq's oil surcharge gambit a quiet success
*  Iraqi Kirkuk exports halt again
*  US, France clash over curbs on child vaccines for Iraq


*  Iraq hands out checks to injured Palestinians
*  Damascus accuses US of exaggerating Iraqi threat to stay in Gulf
*  Iraq, Syria ink transportation, communications accord, textile deal
*  Learning to live with a nuclear Iraq [This, I think, is probably the most
interesting article of the week. It comes from the Israeli journal,
Haıaretz. It concludes on the basis of the recent German BND report that
Iraq wil probably have nuclear weapons in the near future. It reckons
thereıs nothing anyone can or should do about it. It concludes with a
passage I have put in capital letters because it seems to me about the most
sensible thing I have ever read on the subject of relations with Iraq. Had
that been said and acted upon ten years ago a lot of people would be alive
today who are not alive today]
*  Kuwait Impounds Oil Tanker [after the last article, its back to porridge]

In News 4/3-10/3/01 (2):


*  Chua [Malaysian health minister] to visit Jordan and Iraq
*  Russian Parliament Speaker to visit Iraq in March


*  China Talks Tough to U.S. Over Taiwan, Iraq
*  Three companies violated sanctions in Iraq: China
*  China Is Testing Bush With Denial on Iraq
*  U.S. says China promising action on workers in Iraq


*  Algerian pedals to Baghdad in solidarity with Iraq
*  Blair protester: Iıll ignore fine [it appears it was a mandarin, not a
*  Greens Leader Attacks Missile Plan [still some signs of life in the
German Green Party, despite the wretched Joschka Fischer]


*  The Iraqi opposition forces document
*  Interview of the week: Aras Kareem [INCıs Œchief of operationsı. Quite
interesting on the INCıs last days in Iraqi Kurdistan, but discreet on the
really interesting question of the INCıs relations with the main Kurdish
parties, especially the KDP, which invited the Iraqi army in]


*  Deadly wind from Gulf battlefields [depleted uranium]
*  Iraqi Airways back in the skies - just [mainly an account of Baghdad


*  Major left fuming after Thatcher reopens old wounds



WASHINGTON, March 5 (UPI) -- The United States has softened its long-held
demand for Iraqi weapons inspections in order to restore the U.S.-led
coalition against Baghdad, Vice President Richard Cheney said in an
interview published in Monday's edition of The Washington Times.

Mr. Cheney told the newspaper that the United States eventually wants to
resume inspections for weapons of mass destruction, which were halted
following the U.S. bombing of Iraq on the eve of the House vote to impeach
President Clinton.

"I think we'd like to see the inspectors back in there," the vice president
said. "I don't think we want to hinge our policy just to the question of
whether or not the inspectors go back in there."

Asked whether the inspections program is now considered less crucial than in
the past, Cheney said: "It may not be as crucial if you've got other
measures in place and you've got a [sanctions] regime that people are
willing to support. So we'll have to see."

Cheney, the newspaper said, also expressed frustration on several occasions
during the interview with the policies of the Clinton White House, including
the former president's handling of the Middle East crisis.

"I think you've got to look at the situation we inherited in the Middle East
and, frankly, it's a mess." On Clinton's policies toward China, Cheney was
equally brusque.

"I always felt, for example, that Bill Clinton's nine-day sojourn in China a
couple years ago was a mistake. It's one thing to go and visit China. . . .
It's a mistake to let them dictate to the president of the United States how
many days he has to stay or that he can't stop and see Japan on the way
coming and going."

On another topic, the vice president said a missile defense shield will be
aggressively pursued. "We'd like to make it clear that the ABM Treaty should
not stand in the way of doing an effective job of research and ultimate
deployment of limited defenses, and that we're prepared to move as
aggressively as we can to develop a ballistic missile defense," Cheney said.

"We also are concerned that the system do more than just cover the
continental United States, that we be able to offer our allies and friends
around the world some protection as well."

Asked by The Times whether that includes Taiwan, Cheney said: "I'll leave it
right where I've left it."

by Jonathan Wright

WASHINGTON (Reuters, 6th March) - Secretary of State Colin Powell (news -
web sites) said on Tuesday he expected Arab leaders to speak out in favor of
his ideas for changes in sanctions against Iraq once he puts some proposals
to the United Nations (news - web sites).

Powell toured the Middle East in late February to muster Arab support for a
new package of U.N. sanctions that would lift restrictions on Iraqi imports
of civilian goods while tightening controls on equipment with military uses.

He told reporters traveling with him that Arab leaders thought he was on the
right track, but in public statements in the past week the Arabs have not
been so supportive.

Powell said on Tuesday he was still optimistic about the backing he

``I think that support will become public in the days and weeks ahead as
they consider how to support the initiatives we will be taking with the
United Nations,'' he said at a news conference with Swedish Foreign Minister
Anna Lindh.

One of the aims of the changes would be to rebuild an international
consensus on an effective form of sanctions while ensuring that the Iraqi
government cannot blame the sanctions for the hardships of the Iraqi people.

The U.S. ideas include measures that the United Nations can take without
Iraqi cooperation, such as tightening up on controls over cargo entering
Iraq to prevent Iraq from acquiring weapons of mass destruction.

Powell said that without change the sanctions system would gradually have
fallen apart. Smuggling is rife across most of Iraq's borders, and the
government now sells about 10 percent of the country's oil exports outside
U.N. controls.

``The alternative was just to keep on a downward path crashing into a
hillside. The sanctions policy was collapsing before our eyes,'' said

``This is an effort, and I think it will be a successful effort, to
stabilize and get it to a new altitude that will serve our purpose, where we
know we will keep them from moving toward weapons of mass destruction,'' he

The Swedish foreign minister said she and her European Union (news - web
sites) (EU) colleagues had listened with ``great positive interest'' to
Powell's ideas on sanctions against Iraq.

The news conference followed several hours of talks between Powell, Lindh,
EU foreign and security policy chief Javier Solana and EU Commissioner Chris

by John Diamond
Chicago Tribune, 8th March

WASHINGTON: The Bush administration is broadening the rules of engagement
against Iraq to include air raids against weapons production facilities or,
possibly, troop movements, Secretary of State Colin Powell told lawmakers

Outlining an evolving policy toward the Iraqi regime of Saddam Hussein,
Powell told the House International Relations Committee that it would not be
only in cases of provocation that U.S. forces could strike at Iraqi targets.
In the past, strikes were in response to Iraqi air defenses' challenges of
U.S. or British planes patrolling no-fly zones over Iraq.

The new rules would allow attacks on targets that could be involved in
activities banned under United Nations resolutions stemming from the 1991
Persian Gulf war, such as production of nuclear, chemical or biological
weapons, or troop movements threatening to Iraq's neighbors.

"If and when we find facilities or other activities going on in Iraq that we
believe are inconsistent with our [UN] obligations, we reserve the right to
take military action against such facilities and will do so," Powell said.

Although the United States has struck at suspected Iraqi weapons sites in
the past, those attacks stemmed from specific provocations.

In 1998, then President Bill Clinton ordered strikes on Iraqi military
targets, including suspected biological weapons and missile production
facilities, after Iraq expelled UN weapons inspectors.

In 1993, the United States sent cruise missiles into Iraq's intelligence
service headquarters after U.S. intelligence learned Iraq was plotting the
assassination of former President George Bush, the man who led the coalition
in the gulf war.

During the past three years, there have been repeated small-scale strikes on
Iraqi air defense assets in northern and southern Iraq in response to Iraqi
attempts to shoot down the patrolling war planes. Then, last month,
President Bush ordered strikes on Iraqi air defense targets, including
several close to Baghdad.

Powell was staking out new ground, indicating that U.S. planes would strike
at Iraq virtually anywhere and aim at virtually any type of target linked to
Hussein's regime and his military machine.

"The plain meaning of those words is that they're basically going to
substitute air strikes for weapons inspections," said John Pike, director of, an online national security think tank. Under the Bush
policy, Pike said, "strikes against Iraqi weapons facilities would become as
routine and as much a part of the standing policy as against air
defense--anytime, anywhere."

The administration wants weapons inspectors to return, Powell said, but "we
should not plead with the Iraqi regime to let them in."

Powell also said he had approved additional release of U.S. funds to the
Iraqi National Congress, a group opposed to Hussein and one that the Bush
administration hopes could form the nucleus of a credible opposition to the
Iraqi regime.

Powell also defended his support for a shift in sanctions policy that would
lift some sanctions on Iraq but strengthen the enforcement of others.

Republican lawmakers have raised questions about Powell's views on Iraq
after the secretary, on a trip last month to the Mideast, appeared to soften
the U.S. stance toward UN sanctions.

Initially, Powell spoke of the sanctions shift as new administration policy.
As criticism mounted in Washington, other administration officials,
including Vice President Dick Cheney, made clear that Powell had gone to the
region to listen and help develop a Bush administration position.

In Wednesday's hearing, Rep. Henry Hyde (R-Ill.), chairman of the
International Relations Committee, opened the questioning of Powell.

"Regarding Iraq, what is our policy, to contain him or to remove him?" Hyde

"There are several policies, really," Powell replied. He went on to describe
"three baskets." The first is the U.S. support for UN-imposed sanctions and
resolutions passed after the gulf war requiring Iraq to give up its
chemical, biological and nuclear weapons technology. The second is the
enforcement of the no-fly zones, a policy under review by Defense Secretary
Donald Rumsfeld. The third is the U.S. support for Iraqi opposition groups.

Powell defended his position on the Iraqi sanctions, saying that the array
of economic embargoes against Iraq was rapidly losing support in the
international community, from friendly Arab states such as Jordan and Saudi
Arabia, close allies such as France and major powers such as Russia and

by John Diamond
Chicago Tribune, March 10, 2001

WASHINGTON -- The Bush administration is considering a plan to scale back
enforcement of the no-fly zones over Iraq, with the internal debate
centering on how, and how far, to pull back, knowledgeable defense officials

Military and political concerns brought about the reassessment of U.S.
strategy, these officials said.

U.S. commanders are concerned about the growing risk to U.S. and British
pilots flying against improving Iraqi air defenses. They are getting
frustrated over the daily cat-and mouse game that has done little to
diminish Iraqi military power. Amid these risks, allied support for the U.S.
and British patrols has almost vanished, and Iraqi leader Saddam Hussein is
using the patrols to portray the United States as a bully.

"How can we do this with less?" said one senior Pentagon official,
describing the question top Bush administration officials put to the experts
at the Pentagon.

Military advisers--led by Army Gen. Tommy Franks, head of the U.S. Central
Command, the military headquarters responsible for the Persian Gulf
region--are preparing papers for presentation to top Pentagon officials on
how to reduce the commitment to the no-fly zones, the official said.

Franks testified this week in a closed hearing of the House Appropriations
defense subcommittee.

The goal would be to continue to place military pressure on Iraq but not
lock U.S. and British forces into daily patrols that often lead to missiles
being fired at the aircraft and the planes returning fire. This cycle of
conflict has been going on almost continuously since late 1998.

Under the proposed strategy, Hussein "doesn't get to jerk us around," the
senior Pentagon official said.

Another defense official, who spoke on condition of anonymity, said that
under the existing system of patrols, Hussein "was the fiddler and we were
dancing to his tune. When we break out of the tit-for-tat cycle, we break
out of his cycle. It allows us, diplomatically, not to appear impotent and
to be merely reacting."

The United States, along with a diminishing group of allies, has been
patrolling the skies over northern and southern Iraq since shortly after the
end of the 1991 Persian Gulf war.

In the north, the patrols protect the Kurdish population from attack and
oppression at the hands of Iraqi forces. In the south, they protect Shiite
Muslim Arabs and also give the United States early warning of threatening
Iraqi troop movements in the direction of Kuwait or Saudi Arabia.

In recent years, Pentagon officials say, Iraq has taken the initiative by
engaging in "shoot and scoot" skirmishes that put U.S. pilots at risk
without inflicting serious damage on Iraq's military. Also, Bush
administration officials argue that the no-fly patrols impose a burden on
U.S. forces not matched by significant benefit.

A reduction in the air patrols would spark criticism on Capitol Hill, where
some lawmakers already are concerned about what they view as an easing of
economic sanctions on Iraq. And Pentagon officials predict that Hussein
would portray any scaling back in air patrols as a propaganda victory and
present himself as having faced down a superpower.

As a result, a reduction in air patrols is being tied to a broadening of the
options for launching air strikes at suspected weapons research and
production facilities in Iraq. The point of the shift would be to retake the
initiative, to strike at Iraq "at a time and place of our choosing," as one
defense official put it, and not be locked into forcing pilots to shoot only
in self-defense.

Secretary of State Colin Powell told the Senate Foreign Relations Committee
this week that a review of the air patrols and easing of sanctions would not
occur in a vacuum.

"As part of this approach to the problem, we would also make sure that the
Iraqi regime understood that we reserve the right to strike militarily any
activity out there, any facility we find that is inconsistent with their
obligations to get rid of such weapons of mass destruction," Powell said.

Options being weighed at the Pentagon include reducing the number of sorties
over northern and southern Iraq to a bare minimum, and cutting back on the
number of days a month that the patrols are flown. Other possibilities
include leaving the northern zone to the British and having U.S. aircraft
concentrate on the south, where the threat of Iraqi offensive military
action into neighboring countries is greater.

Another option is to develop an "over the horizon" strategy, in which U.S.
and British warplanes would remain in the Persian Gulf region poised to
strike at Iraq but would not patrol daily.

The options under consideration were described by two defense officials who
spoke on condition of anonymity.

Secretary of Defense Donald Rumsfeld is leading the policy review but has
not spoken publicly about the options.

Powell describes the review of the air patrols as one of three major
"baskets" that make up the Bush administration strategy toward Iraq. The
other two are increasing support for Iraqi opposition groups and reducing
the sanctions on Iraq to concentrate on preventing weapons related materials
from getting into the country.

A reduction in the enforcement of the no-fly zones would seem to run counter
to President Bush's avowed desire to increase pressure on Iraq and Hussein's
regime. But it would fit into a broader Bush administration priority of
reducing U.S. military commitments overseas and easing the tempo of
operations for U.S. field units.

Bush's Iraq policy appears headed away from direct military involvement and
toward expanded U.S. support for opposition groups that eventually may pose
a challenge to Hussein's regime.

Paul Wolfowitz, chosen by Bush to be the Pentagon's No. 2 official, publicly
criticized Clinton administration policy on Iraq, including the "pinprick"
air strikes that resulted from the no-fly zone enforcement.

At his confirmation hearing, Wolfowitz spoke of "not simply limiting
ourselves to air power," and said "every time there's a military strike,
Arab governments suffer criticism from their own people."

A key goal of the Bush administration is to reverse what officials see as
Hussein's propaganda edge. The Iraqi leader has used casualties from air
strikes and purported victims of the economic sanctions to whip up
anti-American sentiment among Arabs.

By trimming back sanctions and eliminating the almost daily air strikes that
have been largely ineffective, the Bush administration hopes to put Hussein
on the defensive. The military pressure on Iraq would continue with less
frequent, but more powerful, strikes aimed at Hussein's suspected weapons

The Bush administration hopes that focusing attacks on weapons facilities
would blunt the propaganda edge Hussein seizes when rural Iraqi civilians
are injured in strikes on remote air defense batteries.

Despite repeated small-scale strikes in the northern and southern no-fly
zones, Iraq has managed to improve its air defense system to the point that
U.S. pilots and commanders are increasingly worried about the possibility
that a U.S. or British pilot will be shot down.

A key purpose of last month's strike on a series of targets, several of them
around Baghdad, was to damage Iraqi air defense command centers being
modernized with the help of Chinese contractors.


by Evelyn Leopold

UNITED NATIONS (Reuters, 6th March) - The United Nations criticized
Washington Tuesday for blocking about $3 billion worth of supplies to Iraq
but rapped Baghdad for rebuffing U.N. efforts for alternate oil export
routes, such as to Syria.

The report by Secretary-General Kofi Annan on the U.N-Iraq "oil-for-food
program" also said Baghdad could do more in preventing malnutrition among
children and had ordered too few supplies for health, education, water and
sanitation as well as spare parts to upgrade its dilapidated oil industry.

Without mentioning the United States by name, Annan again said the number of
"holds" mainly on infrastructure repairs were "unacceptably high." Most of
the $3.117 billion worth of contracts in question were blocked by the
Washington, although a review had been promised a year ago.

The holds were placed mainly on key electricity repair items. Others were on
equipment, spare parts and generators for dredgers and tugboats in the port
of Umm Qasr used for transporting food and other supplies, the report said.

But Annan noted there were "positive indications" that some applications
blocked were being reviewed and assured council members the United Nations
had increased monitoring to see that goods were used for the right purpose.

U.S. Secretary of State Colin Powell is reviewing the blocked contracts with
a view to releasing a large number of them along with streamlining some of
the procedures for supplies reaching Iraq under the oil-for-food program,
which now covers a wide variety of goods.

Powell, in considering "smart sanctions" that would target the Iraqi
leadership rather than its 23 million people, wants to tighten up smuggling
of Iraqi oil and other goods over the Jordanian, Turkish and Syrian borders
that do not run through the U.N. program and believed to enrich government

Washington had argued that some of the items it placed "on hold" could be
used for military purposes. But diplomats noted that once the United States
had delayed a contract because of lack of detailed information, it rarely
released it.

On the Syrian pipeline, Annan said Iraq had informed the United Nations that
seeking alternative oil export routes was not "among Iraq's current
priorities" and that Baghdad saw no need to a U.N. team to study the issue.

Under the oil-for-food program, Iraq is allowed to export unlimited
quantities of oil through its Gulf port of Mina al-Bakr and its pipeline to
Ceyhan in Turkey. Oil revenues go into a U.N.-controlled escrow account, out
of which the United Nations pays suppliers for approved goods Iraq has

Industry sources said Syrian exports have increased to more than 100,000
barrels a day since November when Iraq and Syria admit testing the pipeline
but denying any oil sales.

Powell, during a recent visit to the Middle East, broached the subject with
Syrian President Bashar al-Assad and said Syria agreed to put the pipeline
under the oil-for-food program. Discussions are continuing.

Annan's report also warned Iraq about widely reported surcharges it was
imposing on buyers of its crude oil so it could gain revenue directly. He
said buyers had been informed that the Security Council had not approved "a
surcharge of any kind on Iraqi oil" and they should not pay it.

Turning to the needs of infants and toddlers, Annan said malnutrition in
children under five years of age had increased in the central and southern
part of the country, particularly in rural areas. But he said Iraq now had
the funds available to "address urgently the nutritional and health status
of the children of Iraq."

However, the report acknowledged that the complicated U.N. program, with
supplies arriving at various times and delayed in various committees, could
not alleviate fully the impact of sanctions, imposed in August 1990 when
Iraq invaded Kuwait.

Most people depend on government rations in a food basket they receive free
of charge and have no money to buy vegetables, fruits and other goods sold
in Iraq. Some even barter their food rations for shoes and other

Annan urged Iraq to boost lagging oil exports to levels of several months
ago, particularly to help children.

Iraq's official oil exports in the program have fallen to 1.35 million
barrels per day (bpd) in the past month from around 2.2 million bpd in the
last sales phase.

The program's fund has lost about $2.2 billion due to lower oil sales since
early December. U.N. officials say that total oil sales in the current
six-month phase of the program that ends in June will be about half of the
$9,6 billion in the previous six months unless Baghdad increases crude

by William M. Reilly

 UNITED NATIONS, March 8 (UPI) -- The head of the U.N. Iraq oil-for-food
program called on Baghdad Wednesday to cooperate with aid efforts in the
three northern governorates, instead of erecting obstacles because of
increasing resentment against Kurdish authorities in the region.

 At a closed-door meeting of the Security Council, Benon Sevan, the
executive director of the Office of the Iraq Program, said there was
"serious concern" about the obstacles being put in the way in the
governorates of Dahuk, Sulaymaniyah and Erbil.

 "We have been placed in a bind," said Sevan in his prepared statement,
which was released to the media. "On the one hand, we are to implement the
program on behalf of the government of Iraq and, on the other, we have no
alternative but to deal with the local authorities in the three northern
governorates, which is being increasingly resented by the government of

 He cited delays in giving visas to international workers.  Baghdad has been
questioning the number of expatriates employed by the United Nations in the
northern governorates, claiming that Iraqis could do the job as well or

 "In as much as we have done our best to employ Iraqi nationals as experts,
we have pointed out to the government that the local authorities in the
north have refused to accept experts coming from the center/south of Iraq,
even when they were of Kurdish origin," Sevan said. "We even experience
difficulties in convincing the local authorities in Dahuk and Erbil to
accept staff from Sulaymaniyah which also rejects staff coming from Dahuk or

 Sevan said the lack of visas was hampering implementation of electricity
and de-mining projects. He was particularly concerned about differences
between Baghdad and local authorities over an emergency electricity supply

 "It is regrettable that both sides have been moving the goal posts on a
regular basis, with the United Nations caught in between like a yo-yo
without a string," he said.

 Echoing Secretary-General Kofi Annan in his latest Iraq report earlier in
the week, Sevan urged all parties, including the Baghdad government, to
depoliticize the program and facilitate its implementation in order to
alleviate the "continued suffering" of the affected population.

 "The Iraqi people must receive all the assistance which they direly need
and deserve," Sevan told the panel of 15 The United Nations is mandated to
implement relief activities in the northern governorates on behalf of the
Baghdad Government.


UNITED NATIONS (Reuters, 9th March) - A visit to Iraq by a team of U.N.
experts to discuss the rehabilitation of Baghdad's oil industry has been
postponed for a week, marking the second time the trip has been delayed,
U.N. officials said Friday.

The six-member team had been scheduled to go to Iraq March 12 to set
procedures for Baghdad to spend 600 million euros ($560 million) locally to
upgrade its oil industry.

The trip will now begin March 18 because Iraqi Oil Minister Amir Muhammed
Rasheed will be attending a March 16 meeting of the OPEC oil cartel in

Previously the visit was postponed because of a Muslim holiday in February.

The trip arose from a December U.N. Security Council resolution that allowed
Iraq to spend 600 million euros in cash over six months to pay salaries for
oil workers and other costs.

The funds come from Iraqi oil sales revenues under a U.N. humanitarian
program. Baghdad is allowed to sell crude on the open market with revenues
deposited in a U.N. escrow account.

Iraq has agreed to such a "cash component" for its oil industry, but has
eschewed U.N. attempts to accept cash from supervised oil sales to help
restart the local economy. Some diplomats believe this is because it would
put some monies in the hands of citizens.

The United Nations then authorizes Iraq's purchases of food, medicine and a
wide range of other goods to ease the impact of sanctions imposed when
Baghdad invaded Kuwait in August 1990.

by Jonathan Leff

LONDON, March 9 (Reuters) - Three months on, Iraqi efforts to recapture
direct control over oil export revenues through an illegal surcharge appear
to have met some success, oil dealers and Iraqi experts say.

The victory may be as much political as fiscal.

Despite the loss of many of its best customers as direct clients, and
condemnation by the United Nations that controls oil sales under 10-year-old
sanctions, Baghdad has persevered.

A host of little-known companies have emerged to facilitate the sale of the
oil at a time when the rest of the Organisation of the Petroleum Exporting
Countries is turning down its taps.

With persistence and patience, Baghdad has managed to turn a
sanctions-busting surcharge into a quietly accepted -- if not welcome --
aspect of buying Iraqi oil.

Nearly all major oil companies are now buying the oil, provided that the
middlemen give them written guarantees that no surcharge has been paid.

Export volumes have risen to 1.3 million barrels daily after drying up in
early December but remain below November's 2.2 million.

"If the point was to maximise revenues for their own purposes, they've
succeeded," said an industry official.

It remains impossible to prove who, if anyone, is paying the 25-30 cents a
barrel surcharge. But the very fact that it is still being demanded --
preventing refiners from taking new contracts -- is enough to lead most
market insiders to believe it remains in place.

Iraq has categorically denied the surcharge, one in a series of manoeuvres
meant to chip away at sanctions, which allow Baghdad to sell as much oil as
it wants provided the revenues are managed by the United Nations.

U.N. diplomats say the reduced sale of crude due to smuggling and the
surcharge could cut $6 billion of oil-for-food programme revenues out of the
current six-month phase.


But the funds controlled by Iraq are on the upswing.

Assuming an average flow of one million barrels per day over the last 100
days, and a 25 cent surcharge on each barrel, Baghdad may have pocketed
around $25 million.

That's relatively small beer compared to the sums made by selling smuggled
oil to Turkey and Syria, the latter of which has been importing as much as
100,000-150,000 barrels per day through a pipeline reopened last November,
industry sources say.

But the fact that Baghdad has institutionalised the fee -- further eroding
the sanctions -- may be compensation enough.

"It won't make a lot of difference on the regime's finances, the real money
is coming from different sources," said Mustafa Alani, a consultant at the
Royal United Services Institute.

"But I think the principle has practically been accepted... and once you
accept the principle, then there is the possibility that the amount could be
increased gradually."

When the surcharge was first handed down last November, conservative oil
companies shunned Iraqi oil for fear the crude could tarnish their
reputations and put them in hot water withthe United Nations.

Cargo liftings became irregular and volumes slumped.

But sales have recovered in the past few weeks to about 1.3 million bpd,
still under the average 2.2 million bpd Iraq was producing under
oil-for-food last year.

Despite political condemnation from Western powers, the potential economic
fallout from a shortage in world oil supply forced some pro-sanctions
countries to take a quieter approach -- especially after OPEC cut output
once in January and looks prepared to do so again next week.

"The timing was a major factor in these policies, on both sides," said


Although the first round may have gone to Baghdad, Western governments are
not ready to throw in the towel.

The United States and Britain are spearheading efforts to limit the small,
little-known companies now dominating the list of Iraq contract-holders,
putting a stop to any kickbacks that are being paid to Baghdad.

"We want to eliminate the middlemen and others who feed off the surcharge,"
said one envoy involved in the process. "Some just have a fax machine, a
company director and a phone."

Ideas mooted include requiring companies to renew registrations or setting a
minimum $100 million in liquid assets. Some have suggested barring companies
with less than five years business in the oil industry.

French diplomats have pushed for holding the oil majors accountable for
ensuring that no surcharges have been paid along the trading chain, which
could potentially deter buying if it met with widescale approval.

Oil traders also remain miffed at the irregularity of Iraqi exports, which
causes wide fluctuations in prices on rival grades and makes purchasing
planning difficult for refineries.

"We'd be better served it the exports were either all on or all off," said
one traders with a major company.

Dawn, 9th March

LONDON, Reuters, March 8: Iraqi oil exports from Turkey's Mediterranean port
of Ceyhan were halted again after a tanker loaded with Kirkuk crude sailed
late on Wednesday, shipping sources said on Thursday.

They said the Evelyn Maersk, a very large crude carrier (VLCC) had loaded
and sailed on Wednesday, five days after the last Kirkuk lifting from

While the Crude Ena, a one-million-barrel vessel is set to load on March 11,
officials said Kirkuk shipments were likely to remain irregular as no
nominations had been recieved from Iraq's oil marketer SOMO.

Disruptions in Kirkuk supplies have become commonplace since December when
Baghdad started demanding an illegal surcharge from lifters.

OIL DEAL: The list of little-known firms lifting Iraqi oil is mushrooming
even as the United States and Britain seek to curtail the involvement of
middlemen in UN oil-for-food programme sales, industry sources said on

Iraq has now granted crude oil contracts to about 70 companies during the
current six-month phase of the UN oil-for-food deal which started on
December 5, 2000, they said.

But Baghdad so far has only allocated half a dozen firms with double-digit
volume while granting the bulk of the companies fewer than five million
barrels, market sources said.

Topping the list are Italian Italtech, Malaysian Mastek, Russian
Zarubezhneftegas, Lichtenstein-based Fenar and Alcon and Emir Oil from the
UAE, the sources added.

Still absent from the Iraqi contract sheet are major European oil companies.

They have refused to sign direct deals because of Iraq's
now-institutionalised surcharge fees of 25 cents per barrel for sales to
Europe and 30 cents per barrel for the United States and Far East, market
sources said.

Dawn, 10th March

UNITED NATIONS, March 9: France clashed with the United States in the UN
security council on Thursday over holds placed on applications to import
child vaccines under the UN's oil-for-food programme in Iraq.

The executive director of the programme, Benon Sevan, told the council that
vaccines for measles, mumps, rubella, pneumonia, tetanus and hepatitis were
in short supply in Iraq.

"These shortages are exposing the Iraqi population to normally preventable
infections," he said, quoting from a report by UN Secretary General Kofi
Annan which was published earlier this week.

"The lack of vaccines would mean that the 4.7 million children under the age
of five countrywide are at risk," he went on.

The report said the shortages were due to "delays in placing orders for
replenishment of health items, irregular deliveries of orders, holds placed
on applications, and failure of some items to pass quality-control tests."

But, speaking to reporters later, the acting US representative to the United
Nations, James Cunningham, denied that holds on contracts were to blame.

Noting that only two contracts for vaccines were currently on hold, he said:
"If there is a problem with the vaccine flowing through the system, it is
not something that has been created by the holds."

Asked why such contracts were blocked at all, he replied: "The process for
creating and working with vaccines, as I understand it - and I'm not an
expert - is very similar to the processes involved in producing biological

Members of the UN's Iraqi sanctions committee - notably the United States
and Britain - have blocked large numbers of contracts, often on the grounds
that the requested supplies had a potential military dual use.

The deputy French ambassador, Yves Doutriaux, told the council that "holds
on vaccines are not simply very serious from a moral point of view, they are
also incomprehensible."

None of the vaccines mentioned in Annan's report were on the list of
dual-use items drawn up by the UN arms inspection commission, he said.

Doutriaux pointed out that children needed to be vaccinated against certain
diseases when they reached a certain age.

"If that period is allowed to slip by, for instance by placing contracts on
hold, children of that age will never be able to be vaccinated," he said.

In remarks prepared for his briefing and distributed to reporters, Sevan
quoted Annan's "grave concern over the unacceptably high level of holds
placed on applications," which exceeded 3.3 billion dollars at the end of
last month.

Sevan noted that holds placed on contracts in the electricity and transport
sectors had a direct impact on the distribution of food and other basic
supplies in Iraq.

But Sevan noted that some items "such as the kind of computers which are
utilised in our offices in New York, are readily available in the markets of
Baghdad, or elsewhere in Iraq."

The committee began fast-tracking applications in March last year on
instructions from the Security Council, concerned about the large number of
contracts placed on hold, usually by Britain and the United States.

Originally applied to food and educational items, medical goods, and
agricultural equipment, the fast-track procedures were later extended to
encompass water and sanitation supplies and electrical goods.

Sevan appealed to members of the committee "to review further their criteria
in placing applications on hold."

But Cunningham said "the holds are not a core part of the difficulty in the

The real problem was "Iraq's under-funding, and foot-dragging," he said.


Times of India, 4th March

HEBRON: More than 100 Palestinians wounded in the five months of fighting
with the Israeli army received financial aid on Saturday from Iraq here in a
public ceremony.

In a room featuring portraits of Iraqi President Saddam Hussein and
Palestinian leader Yasser Arafat, officials from the Arab Liberation Front,
a pro-Baghdad Palestinian group, and representatives of Iraq's ruling Baath
party handed injured Palestinians or members of their families checks for
$500 or 1,000. Speaking on behalf of the Palestinian Authority,
parliamentarian Abbas Zaki thanked Saddam for the aid and promised that the
uprising against Israel would continue.

Thousands of Palestinians burned US flags at rallies last month in support
of Saddam after US and British war planes bombed the Baghdad region. In the
1991 Gulf War, Iraq fired 39 Scud missiles on Israel, killing two Israelis
and winning the hearts of hardline Palestinians, angered by Washington's
alliance with Israel.

Iraq has pledged one billion euros ($930 million) to support the Palestinian
uprising, which broke out after right-wing leader Ariel Sharon made a
high-profile visit to the Jerusalem mosque compound, a site holy to both
Muslims and Jews.

Following Sharon's election as prime minister, Iraq announced the formation
of a "Jerusalem Liberation Army." (AFP)

Times of India, 4th March

DAMASCUS: The United States has exaggerated the extent of Iraqi military
might as a way to justify its own presence in the Gulf region, a Syrian
government newspaper said on Saturday.

Washington makes a "bogeyman" out of Iraq "to reinforce and justify its
military presence following the reduction of its reputation on the subject
of the Middle East peace process" because of a "flagrant bias towards
Israel," Ath-Thawra wrote.

The newspaper said Iraq "no longer constitutes a menace after the
destruction of its arms" and the controls imposed by the United Nations.
This is all a "pretext put foward by the Americans to maintain sanctions on
the country," it said.

Iraq has endured a decade of international sanctions since a global
coalition, led by the United States, forced Baghdad's retreat from Kuwait in
the 1991 Gulf War. But Iraq has not undergone arms inspections since 1998,
when the US and Britain launched air raids on military sites in Baghdad.
Ath-Thawra derided new US President George W. Bush's efforts to topple Iraqi
leader Saddam Hussein as a front against "calls more and more pressing by
the countries of the region" for US forces to withdraw from the Gulf.

The US has military bases in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and
the United Arab Emirates. The newspaper also appealed for "a joint Arab
action to save Iraq." Syria, which was part of the US-led coalition in the
Gulf War, launched a rapprochement in 1997 with Iraq. The two countries are
ruled by rival branches of the Baath party. (AFP)

Times of India. 4th March

BAGHDAD: Iraq and Syria signed a transportation and communications accord in
Baghdad during a visit by two ministers from Damascus, the official news
agency INA announced on Friday.

While in Damascus, the two countries also sealed a deal allowing Syria to
sell its surplus textile products on the Iraqi market, Al-Baath, Syria's
ruling party newspaper, reported on Friday. The accord reached in Baghdad
covers cooperation in air, sea and land transportion as well as
communications and data sharing. Iraqi transport and communications minister
Ahmad Murtada Ahmad signed the accord with Syria's transport and
communications ministers, Makram Obeid and Radwan Martini, late Thursday at
the end of their visit.

The Syrian officials flew in to Baghdad on Monday. The textile agreement
will allow Syria to export 30 million dollars worth of textiles to Iraq over
an unspecified duration. The deal was worked out in Damascus by Syrian Ghazi
Khadra and Iraqi Ali Ali, the heads of their countries' state-owned textile
industries. The deal also falls under the domain of the free trade agreement
signed by the Arab neighbors on January 31.

Iraqi Vice President Taha Yassin Ramadan said at the time of that signing
that the agreement had to wait "for the administrative formalities to be
defined" for it to be put into practice. The countries' bilateral trade is
currently worth 500 million dollars, and is nearly all one-way -- from Syria
to Iraq.

The official Syrian SANA news agency reported Friday that the chambers of
commerce for Mosul, in northern Iraq, and Aleppo, in northern Syria, agreed
during a meeting Thursday in Aleppo to host a joint business convention.
Damascus, which was part of a US-led coalition that drove Iraqi troops out
of Kuwait in the 1991 Gulf War, launched a rapprochement in 1997 with
Baghdad, which is ruled by a rival branch of the Baath party. (AFP)
2301Monday, March 5, 2001

by Reuven Pedatzur
Ha'aretz, 5th March

Germany's Federal Intelligence Service (BND) published an assessment over a
week ago on Iraq's continuing development of weapons of mass destruction. It
emphasizes how important it is for Israel to prepare itself for a vastly
different Middle East.There is nothing substantially new in the German view
that within three years, Iraqi ruler Saddam Hussein will have nuclear
weapons - and by 2005, he will also have ballistic missiles with a range of
3,000 kilometers that will be able to hit targets in Europe. Similar
assessments of the Iraqi nuclear timetable have been published before.

What is new about the German intelligence agency's evaluation is the
inclusion of technical details, such as Iraq's success in manufacturing
ammonium percholorate, one of the three components needed to produce solid
fuel for ballistic missiles, and the revelation that forbidden materials
have been smuggled into Iraq (through Dubai and Malaysia).

Iraq's stockpiling of weapons of mass destruction has once again begun to
concern the international community following the entry of George W. Bush
into the White House. One of Bush's first decisions led to an aerial attack
on Iraqi military installations near Baghdad. Furthermore, the new American
president's declarations and those of the senior members of his cabinet are
cogent evidence of Washington's fears of Iraq becoming a nuclear power
capable of threatening, within a relatively short period of time, America's
European allies.

On the surface of things, a substantive change seems to have taken place in
American policy. It appears the recently installed Bush administration is
determined to put an end to Iraq's plans for developing weapons of mass
destruction. However, it seems more likely the Americans will soon realize
they have really missed the boat as far as stopping Iraq from arming itself
with ultra-lethal weapons is concerned.

Since December 1998, when the last United Nations inspectors left Iraqi
soil, no one in the West knows for certain what has been going on in Iraq
regarding weapons of mass destruction. But it seems obvious to all those who
monitor Iraq's activities that, the moment the last inspector departed from
that country, Baghdad renewed and stepped up its programs for developing
such weapons.

For example, the BND assessment has called attention to the extensive
activities observed at Al-Kaim, which, according to Western experts, is the
hub of the research and development work connected with Iraq's nuclear

The assessment in the West is that the key factor that will enable Iraq to
complete its development of a nuclear bomb would be the acquisition of
fissionable weapons-grade materials. Apparently, the known quantities of
uranium in Iraqi hands would be enough for the production of four to five
nuclear bombs. According to nuclear experts, the quantity of low-grade
uranium that Iraq currently possesses (1,700 kg) is enough for the creation
of 45 kg. of uranium that would be of sufficiently high quality to enable
the production of a bomb.

In addition to these materials, Iraq has 13 tons of natural uranium, which
the International Atomic Energy Commission allowed to remain in Iraqi hands
for peaceful applications in the future. This amount of natural uranium
would be sufficient for the production of 70 kg. of weapons-grade uranium.
If one factors in the fear that additional fissionable materials have been
smuggled into Iraqi over the past two years or will be smuggled in within
the near future, it seems clear that Saddam's determination to manufacture
nuclear arms will lead to the production of an Iraqi atom bomb.

When the various options available to the Bush administration are weighed,
the only conclusion is that, without Saddam's cooperation, there is no
rational way of putting an end to Iraq's nuclear program. It is difficult to
imagine the American administration being able to once more forge a
coalition of countries supporting genuine international monitoring of
Saddam. The Iraqi leader himself has already made it crystal clear that he
has no intention of letting arms inspectors roam freely in his country. The
reaction of France, Russia and China to this statement indicates that these
three nations have learned how to live with the fact that arms monitoring of
Iraq can never be renewed.

The only other military option the United States could adopt would be the
launching of a unilateral American operation. However, it seems highly
unlikely an American president would order that sections of Iraq be captured
in order to permit the destruction of that country's nuclear installations.
Even aerial bombing, in the absence of precise intelligence reports, is out
of the question.

The sad but inevitable conclusion is that Iraq will have nuclear weapons
within a few short years. Israel's policy-makers must base their decisions
on the acceptance of this fact of life. The question, of course, is how
should Israel prepare itself to meet this threat.

The same reasons that discourage America from any use of military action to
terminate the Iraqi nuclear program will also prevent those who once managed
to destroy the Iraqi nuclear reactor from repeating such a move. Thus, the
only realistic option left for Israel is to formulate policies that will
effectively cope with this new nuclear threat.

Those policies will have to be based on the formation of a credible
deterrent capability that could provide an effective response to a surprise


If the German intelligence agency's assessments concerning Iraq are correct,
Israel's policy makers do not have much time left in order to formulate a
policy that can effectively meet this challenge.

Las Vegas Sun, 10th March

KUWAIT (AP) - Kuwait's coast guard has impounded a Honduras-flagged oil
tanker suspected of violating the U.N. embargo on Iraq, an Interior Ministry
official said Saturday.

The vessel, intercepted Friday in Kuwaiti waters, was carrying 1,450 tons of
crude oil from Iraq, the official said on condition of anonymity.

The tanker "Al-Sabah" was registered in the United Arab Emirates and flew
the Honduran flag, he said. It was manned by 21 sailors from Iraq, Iran,
Bangladesh, Pakistan and the Philippines. The crew members were detained for


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