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News, 22-28/4/01 (1)

News, 22-28/4/01 (1)

The most important developments are probably the depressing skirmishes
between Iraq and Iran. The articles *  Iraq sanctions create nightmare for
legitimate shipping (under ŒSmuggling¹) and *  Secret u-turn to send Kurds
back (under Miscellaneous) are particularly interesting. And I can¹t help
thinking that something could be made of the revelation that both Bush Sr
and Jr are members of what is quite is plainly a Satanist cult (also in the
Misc section).


*  Iraq says Iran attack means no attendance at Islamic conf.
*  Iran raid was signal to U.S., Saudi Arabia, says Iraq paper
*  Iran rebels say attack police station in capital
*  Iraq lays scores of cease-fire violations to Iran
*  Iraq Slams UN Silence Over Iran's Missile Attacks
*  Iran says eight rebels killed near Iraqi border


*  Iraq Invites US Companies to Hold Exhibitions in Baghdad
*  Bill would repay Gulf War claims [proposal to steal Iraqi money in US
banks in order to speed up the compensation scam]
*  Bush Iraq team considers reviving coup option [yawn]
*  Top Russian, U.S. Officials to Hold Talks on Iraq


*  Alfa Eko, Sputnik Eye Iraqi Telecoms Deal [possibility of Iraq getting
access to a satellite system.]
*  Russian firms jostle for Iraqi oil but problems ahead [for example,
competition should sanctions end. And understandable Iraqi impatience at the
Russians reluctance to simply break the sanctions]


*  Dubai-Iraq ferry slashes fares as traffic rises
*  Iraq demands UN to shrink size of demilitarised zone along border


*  Bombing Deaths in Kuwait Tied to Pilot Error
*  Iraq claims air raid death, UK says no


*  Emirates to punish oil smugglers [ŒThe U.S.-led force charged with
intercepting smugglers has impounded 24 ships found to be carrying illegal
Iraqi oil this year ...¹]
*  Canadian warships cannot board unco-operative vessels in Arabian Gulf:
*  US, Britain, threaten Swiss firm on Iraqi oil sale [The mystery of why US
bound oil should be cheaper than Europe bound oil is still not explained]
*  Iraq sanctions create nightmare for legitimate shipping



*  French 'weapons grade' exports to Iraq blocked [an accont of some of the
965 contracts being challenged by the sanctions Committee in the 18 month
period to February 2001, all but one of them by Washington and London]
*  Suppose They Gave a War and Nobody Knew [a former Iraqi weapons inspector
outlining nasty possibilities such as launching foot and mouth disease on
the innocent American public. Well, its his job, after all ...]
*  German intelligence chief warns of Iraqi, Iranian weapons threat
*  Iraq tested radioactive bomb [according to another weapons inspector
looking at a document which someone passed on to someone who passed it on
... ]


*  Iraq, Kazakstan to World Cup Finals
*  Iraqi MPs recommend Saddam's birthday a holiday
*  Jordanian Ambassador to Iraq Robbed


*  Czech Republic Ousts Iraqi Diplomat [no explanation why]
*  Spain urges easing of sanctions against Iraq
*  Pope calls for an end to Iraq's suffering


*  Secret u-turn to send Kurds back [Kurdish refugees being sent back
because Mr Straw thinks that Iraqi Kurdistan is safe. An interesting detail
I didn¹t know is that there is a third Kurdish body which controls territory
in the area - the Islamic Movement of Iraqi Kurdistan, and they apparently
control Halabja, where the chemical weapons attack took place]
*  France to Study 'Gulf War Syndrome'
*  Bizarre secrets of Bush club exposed [Further details of the ŒSkull &
Bones Club¹ may be had at]


*  British police probing war crimes allegations against Saddam [the crimes
incude taking hostages in the run-up to the war. Will this prompt anyone to
ask why Saddam Hussein RELEASED his hostages? All of them? Or will anyone
other than myself notice that it was only when the last one had been
released that the UN assault began?]
*  Tonight, the Babylonian tyrant will sleep less easy [in which we learn
that Œmost of the medical equipment and medicines taken into Iraq by the UN
is smuggled abroad to be sold for more cash on the black markets of Lebanon,
Syria, Turkey and Iran.¹ Gosh. The article continues: ŒI estimate that he
has caused the deaths of more people than did Genghis Khan and Tamberlane in
the 13th and 14th centuries put together¹. Presumably the author reaches
this conclusion by ascribing to Saddam all the deaths that have been caused
by Antony Blair, Robin Cook and their predecessors and allies]
*  Why is Yard chasing Saddam? [A historic article. The first time ever I
find myself in almost complete agreement with The Sun]



BAGHDAD April 22 Kyodo [Japan] - Iraqi National Assembly Speaker Sa'doun
Hummadi said Sunday Iraq will skip an Islamic parliamentary conference in
Tehran late this month to support Palestine because of an Iranian missile
attack on Iraqi border towns last week.

According to Iraqi statements, Iran fired 68 Scud surface-to-surface
missiles at four Iraqi border towns Wednesday, killing four civilians and
wounding an unspecified number of others.

Iran has admitted to firing 26 missiles, it but said the attack targeted
camps of the Iranian People's Mojahedin opposition organization inside Iraq,
not Iraqi targets.

A statement faxed by the Mojahedin to the Kyodo News office in Baghdad on
Sunday said rebel units inside Iran launched a series of attacks on Iranian
army positions near the border with Iraq earlier in the day.

The group claimed an unspecified number of Iranian soldiers were either
killed or wounded in the Sunday attacks, while it lost two commandos.

Baghdad, Reuters, 22nd April

An Iraqi newspaper said yesterday that Iran's Wednesday missile attack on
rebel bases inside Iraq was intended as a signal to the United States and
Saudi Arabia that it could play the role of "policeman of the Gulf".

"By its aggression, Tehran's regime was aiming to gain favour with other
parties and present a proof...that it could be the policeman of the Gulf
once again," said the official Al Iraq newspaper in a front-page editorial,
seen as referring to the U.S. and Saudi Arabia.

Iraq said on Wednesday that Iran had fired 56 Scud missiles at camps inside
Iraq belonging to Iran's armed opposition People's Mujahideen Organisation.
Tehran said the strike was "defensive" after the rebels launched attacks in

"Tehran's regime will find no one who believes it when it claims that it was
targeting Iranian rebels...because the number of the missiles it fired was
very big...more than those fired by Iraq or Iran during the 1980-88 war," Al
Iraq said. "Iranian claims are groundless as all the Iranian missiles landed
in populated cities, killing Iraqi citizens," it added.

Baghdad said on Friday that six people had been killed and several others
wounded in Wednesday's attack. The paper linked the timing of the attack to
U.S. Assistant Secretary of State Edward Walker's tour of Iraq's neighbours
Jordan, Syria and Turkey to discuss changes Washington wants to make to the
UN sanctions against Baghdad, and a recent visit by Saudi Interior Minister
Prince Nayef to Iran to sign a bilateral security pact.

Iran threatened on Thursday to launch more strikes against the Iraq-based
rebels unless they ceased cross-border raids. A Revolutionary Guards
commander said the missile attack was a warning to the heavily armed
Mujahideen to cease their attacks in Iran, Iranian state television
reported. Tehran regularly criticises the Iraqi government for its support
of the Mujahideen. Iraq in turn accuses Iran of sheltering Iraqi Shi'ite
Muslim dissidents.

Dubai, Reuters, 24th April

Iran's main rebel group said it had fired rocket-propelled grenades
yesterday at a police station in the capital Tehran, near a high-security
area where several Iranian leaders live. A spokesman for the Iraq-based
People's Mujahideen Organisation told Reuters in Dubai that the attack had
inflicted "heavy damage and casualties" on the police station in the
northern suburb of Shemiran.

Residents of the district, near Jamaran where residences of senior leaders
are located, said they had heard a loud blast. Journalists who visited the
area said there was no visible sign of damage at the police building. Police
denied any attack had taken place.

The Mujahideen said the raid was the 14th it had launched in retaliation to
Iran's missile attack on the group's bases in Iraq on Wednesday. Iraq has
said Iran fired 56 Scud missiles at Mujahideen camps, killing six people and
wounding several others. The group has said one of its members had been

Iran said the strike was in self-defence against Mujahideen attacks and
threatened to launch more strikes against rebel bases in Iraq unless they
ceased cross-border raids and attacks deep inside the Islamic republic.

Tehran regularly criticises the Iraqi government for backing the Mujahideen,
the main Iranian armed opposition group. Iraq in turn accuses Iran of
sheltering Iraqi Shi'ite dissidents.

United Nations, Reuters, 24th April

Iraq accused Iran yesterday of 61 violations in the first 10 weeks of the
year of the 1988 cease-fire accord that ended a ruinous eight-year war
between the two Gulf neighbours.

The accusation came in a list of alleged violations of the UN-brokered
cease-fire that was submitted by Iraq's UN Ambassador Mohammed Aldouri to UN
Secretary-General Kofi Annan. The violations included alleged exchanges of
fire between Iraqi and Iranian vessels, ship boardings, artillery attacks
and shelling of Iraqi military units with mortar rounds.

Others appeared less serious, such as work by Iranian construction crews and
helicopter flights that never strayed from Iranian territory. On January 8,
for example, "an Iranian excavator worked on improving the dirt road running
opposite the Iranian outposts at coordinates 5492," according to the Iraqi

Iraq regularly accuses Iran of sheltering Iraqi Shi'ite dissidents on its
territory. Tehran, in turn, regularly charges the Iraqi government with
backing the Mujahideen, the main Iranian armed opposition group.

The report to the United Nations focused solely on the period from Jan. 1 to
March 8 and did not deal with a series of cross-border raids that have taken
place in the last few days. The Mujahideen boasted yesterday that it had
launched its 14th raid against Iran in retaliation for an Iranian missile
attack on the group's bases in Iraq on Wednesday.

Iraq has accused Iran of firing 56 Scud missiles at Mujahideen camps,
killing six people and wounding several others. According to the Mujahideen,
only one person was killed. Iran said the missile strike was in self-defense
against Mujahideen attacks and threatened to launch more strikes against
rebel bases in Iraq unless they ceased cross-border raids and attacks deep
inside the Islamic republic.

People's Daily (China), 25th April

Iraq on Tuesday slammed the United Nations for silence over Iran's recent
missile attacks on Iraqi territory, the official Iraqi News Agency reported.

In a letter to UN Secretary General Kofi Annan, Iraqi Deputy Prime Minister
and Acting Foreign Minister Tareq Aziz urged the world organization to
shoulder its commitments toward Iraq's sovereignty, independence and
territorial integrity.

The UN Security Council has taken "coercive measures" to prevent Iraq from
rebuilding its defensive capabilities, while the region is engaged in an
arms race, Aziz said, adding that the " double-standard policy has
encouraged regional and non-regional forces to launch attacks against Iraq."

He said that the Iranian attacks and its financing of Iraqi opposition
groups were aimed at "destabilizing Iraq."

Iraq has said that six civilians died and 36 others were wounded when
Iranian forces launched 68 missiles against an Iranian opposition group
based in Iraq last Wednesday.

In a letter to the UN Security Council last Wednesday, Iran acknowledged
that its forces attacked Iraqi bases of the rebel Mujahedeen Khalq
Organization (MKO), and has threatened to launch more attacks against the
MKO unless it ceases cross-border raids.

Iraq has retaliated against the attacks by shooting down an unmanned Iranian
reconnaissance plane over Iraqi territory last Thursday.

Iraq and Iran, who fought a war in 1980-88, play host to each other's
opposition groups. The MKO has often engaged in attacks against Iran, while
the Tehran-based Supreme Council for the Islamic Revolution in Iraq has
vowed to continue attacks until the Iraqi government is toppled.

The issues of opposition groups and prisoners of war have impeded the two
neighbors from normalizing their relations more than a decade after their
bloody war ended.

Tehran, Reuters, 29th April

Iranian forces killed eight Mujahideen rebels in a clash near the border
with Iraq yesterday, Iran's official IRNA news agency reported. The agency
quoted Iran's army as saying that troops clashed with nine fighters from the
Iraq-based People's Mujahideen Organisation trying to cross into Iran in the
mountainous Qasr-e-Shirin area. The ninth member was captured, it said. IRNA
said no government troops had been hurt in the clash.

In a statement sent to Reuters in Dubai, the Mujahideen said its fighters
had killed or wounded dozens of Iranian government forces in several hours
of clashes which began north of the nearby town of Gilan-e Gharb.



People's Daily (China), 23rd April

Iraq has invited US companies to hold exhibitions in the Iraqi capital
Baghdad, the weekly newspaper Al-Ittehad reported Sunday.

"A number of US companies have been invited to hold a series of specialized
fairs in Iraq," the weekly quoted Fawzi Hussein al-Dhahir, general director
of Iraq's trade fair company, as saying.

Dhahir said that his company is ready to provide all the facilities for
companies that wish to hold fairs in Baghdad, adding that Saudi Arabia,
Egypt, Syria, Spain, Ukraine, Germany and Turkey will hold trade fairs in
Baghdad next month.

This is believed to be the first time for Iraq to openly invite American
firms to hold exhibitions in the sanctions-stricken country.

Ever since the 1991 Gulf War, during which the US-led multinational
coalition drove Iraqi troops out of Kuwait after a seven-month occupation,
U.S. companies have been absent from the Iraqi market.

The U.S. has been the major force behind the continuation of the decade-old
United Nations sanctions on Iraq, triggered by the invasion of its tiny
neighbor in August 1990.


WASHINGTON (AP, 26th April) ‹ Osama Shoufi and thousands of other Americans
who fled Kuwait during the 1990 Iraqi invasion lost nearly everything they
owned and still are waiting for the compensation they were promised a decade

Shoufi abandoned his construction business, drove to Jordan and borrowed
just enough money to buy a plane ticket to Dallas, where he now lives with
his family.

``We suffered enough. We really did,'' he said. ``A lot of things were taken
from us and it shouldn't have been done this way.''

Rep. John Shadegg, R-Ariz., introduced legislation Thursday to use $1.7
billion in Iraqi assets frozen by the U.S. government to help Shoufi and the
approximately 3,100 other Americans with $4.3 billion in claims against

``These people have been devastated and a process was put in place and that
process isn't working,'' Shadegg said. ``These monies certainly aren't going
to be returned to Saddam (Hussein), so they ought to be used because there
are people with real-life claims and real life injuries.''

After the Gulf War, the United Nations established a system to take 25
percent of the proceeds from Iraqi oil sales. Three-quarters of that went to
buy food for Iraqi civilians; the rest went into a fund to repay claims made
by people, corporations and governments that lost possessions or family
members in the invasion.

But the money has been slow in coming. Iraq did not start participating in
the program until 1996, and since then, the funds generated have not kept up
with the flood of claims, said Joe Sills, a spokesman for the U.N.
Compensation Commission.

``The processing has run far ahead of the money available ... but as the
money has come in it has been paid out almost immediately,'' he said.

The commission received nearly $300 billion in claims. Of those, about $4.3
billion came from the United States ‹ $256 million from individuals, $1.7
billion from businesses and $2.3 billion from the government.

Shadegg's bill, co-sponsored by House Majority Leader Dick Armey, R-Texas,
and others, stipulates that individuals and families who suffered losses
would get repaid first, followed by businesses, then any government claims.

Iraq's ambassador to the U.N., Mohammed Al-Douri, would not comment until he
had seen the legislation.

by Eli J. Lake

WASHINGTON, April 27 (UPI) -- The Bush administration is seriously
considering both supporting an Iraqi insurgency group and fomenting a
military coup to topple Saddam Hussein, United Press International learned
exclusively Friday.

These options are set out in a report written earlier this month by Richard
Haass, the head of the Bush administration's interagency working group on
Iraq policy. Haass recommended backing an uprising by a popular rebel group,
while simultaneously recruiting and supporting high-ranking Iraqi military
officers willing to oust Saddam's regime, according to administration
officials who have seen Haass' memo, and described its contents to UPI.

The ouster of Saddam Hussein is what the administration means by "regime
change," one of the three areas of Bush's emerging Iraq policy, along with
U.N. sanctions, and maintaining the no fly zone to protect Kurdish northern,
and Shi'ite Muslim southern Iraq.

One State Department official told UPI, "There is support for regime change,
but we want to work with a wide representation of Iraqis opposed to the
government of Saddam Hussein." This source added, "We know what hasn't
worked, but we don't know what's possible. We don't know what a likely
scenario is at this point."

Patrick Clawson, the Washington Institute for Near East Policy's research
director, said in an interview Friday: "If you are going to pursue a regime
change, you ought to pursue a whole variety of regime change options rather
than pick your favorite one and assume it will work."

The strategy is still in the development stage, according to administration
officials. On April 25, in a "deputies' meeting," which included
high-ranking CIA officials, Deputy Secretary of State Richard Armitage,
Deputy Defense Secretary Paul Wolfowitz and Vice President Richard Cheney's
national security adviser, I. Lewis Libby, the draft was sent down for
further revisions.

Haass' insurgency/coup proposal is a continuation of the Clinton strategy on
Iraq. The Clinton administration pursued numerous unsuccessful coup plots
against Saddam since 1992, while giving public symbolic support for the
Iraqi National Congress -- an umbrella group of Iraqi rebels.

The most embarrassing U.S.-backed coup attempt was in July 1996, when CIA
operatives provided support for a group of Sunni defectors associated with
the Iraqi military who promised to deliver Saddam through a military

Iraqi intelligence agents used the CIA's own communications equipment to
tell the agency that its insurrection had failed and that its plotters would
be executed. It is now believed that the entire organization -- the Iraqi
National Accord, or the Wifaq movement-- which received $6 million in 1995
from the United States, was infiltrated with double agents.

"This two-track approach is an old approach, this was used from the summer
of 1994 to the summer of 1996," former CIA Iraq desk officer, Warren Marik
told UPI in an interview Friday. Marik who now works on a volunteer basis
with the Iraqi National Congress, said the 1996 coup attempt was "totally

Haass' proposal however does not get specific about how to pursue a coup
option, other than to say that it should be pursued for now to see if such a
plan would eventually bare fruit. The memo also proposes that U.S. policy
refrain from explicitly stating that its goal is to remove Saddam from power
and makes the case that each day he remains in power is a failure for the
new administration.

Haass' report revealed a new fault line in the young Bush administration's
foreign policy team on Iraq. High-ranking Defense Department officials such
as Deputy Defense Secretary Paul Wolfowitz and Secretary of Defense Donald
Rumsfeld -- not to mention Vice President Richard Cheney's national security
team -- are strong supporters of the Iraqi National Congress and
particularly one of its leaders, Ahmad Chalabi.

But many State Department and CIA officials doubt the efficacy of Chalabi's
plan to create a military opposition inside Iraq capable of defeating an
attack by one of Saddam's armored brigades. Chalabi has argued that this
approach would give military defectors inside Iraq a safe haven and lead
Iraqi military commanders disloyal to Saddam to join the INC.

One problem for Chalabi, however, is the early resistance from Iraq's
neighbors to an insurgency plan. The Jordanians, Syrians and Turks are wary
of the INC. On April 11, Jordan's King Abdullah -- perhaps the Arab leader
most sympathetic to U.S. interests in the region -- said, "When it comes to
the opposition I don't see, I don't agree with the weight that has been put
to it. ... There is an attitude that they are a solution, I don't think they

But the Bush administration's supporters of Chalabi are undeterred. This
month, the Pentagon appointed as its Iraq transition coordinator Randy
Scheunemann, former national security adviser to Sens. Trent Lott, R-Miss.
and Bob Dole, R-Kan., and the author of the 1998 legislation authorizing $98
million in Pentagon aid for the Iraqi National Congress. In the Clinton
administration, the Iraq transition coordinator's post was filled by the
State Department.

Haass would not agree to an interview due to his pending confirmation

by Richard Waddington

GENEVA (Reuters, 27th April) - Senior diplomats from Russia and the U.S. are
to hold exploratory talks here on Saturday on ways to narrow their sharply
differing policies toward Iraq, diplomats said on Friday.

U.S. assistant secretary of State David Welch and assistant secretary for
non-proliferation Robert Einhorn will meet Russian Foreign Ministry
officials Uri Fidotov and Alexandre Saltanov, director for international
relations and head of Middle Eastern affairs, respectively, on Saturday

Both Russian and U.S. officials described the meeting as part of on-going
discussions and added that no statements were expected to be made at the end
of the talks.


``They (the U.S. officials) will consult with the Russians on how to rebuild
the international consensus to bring Iraq into compliance with United
Nations (news - web sites) Security Council resolutions,'' a U.S. spokesman
for the diplomatic mission in Geneva said.

He said the talks followed discussions Welch and Einhorn had with British
and French officials on April 17 and 18.



by Elizabeth Wolfe
Moscow Times, 23rd April

Alfa Eko and Intersputnik, the former Soviet-bloc satellite communications
organization, are nearing a deal with Iraq to upgrade the war-torn country's
ground- and space-based telecommunications network, both sides said Friday.

Negotiations with the Iraqi government began about six months ago, and the
first contract to provide telecoms services could be signed in about a
month, said Alexander Lysenko, head of the international department of Alfa
Eko, a subsidiary of the Alfa Group conglomerate. Alfa Eko and Intersputnik
representatives visited Baghdad in early April to hold talks with Iraq's
Transport and Communications Ministry and Information Ministry.

Intersputnik will oversee the technical side of any projects, while Alfa
Eko, which has been working with Iraq for nearly five years as part of the
UN oil-for-food program, will provide political connections and handle the

Both parties label potential work with Iraq as "humanitarian," insisting
that it does not violate the UN's economic sanctions against Iraq, imposed
after the invasion of Kuwait in 1990.

"The people need at least some access to information, to television, to
communication with the outer world, so that's why we believe that such
cooperation in no way contradicts the sanctions," said Viktor Veshchunov,
Intersputnik's head of international legal affairs.

"We have to explain, we have to show [the UN] that this is really a civil
project. There is no military involvement," Lysenko said. "There are some
discussions to make sanctions more flexible, so using this possibility we
think that this project can be realized."

Any contract struck between the parties would need approval from the UN.

The two Moscow-based partners said that phase one is to advance Iraq's
telecoms system by leasing out Intersputnik's existing satellite capacity
for broadcasting and communications, particularly voice traffic exchanges
between Iraq and CIS countries.

Outfitting facilities on the ground will prove trickier, though one
possibility is to rebuild a broadcast station near Baghdad that was built
with Intersputnik expertise in the 1980s and destroyed during the Gulf War.
If salvageable, the station could be used for telecommunications. Veshchunov
said it would not be difficult to find a Russian or European manufacturer
from which to purchase equipment, but said it was too early to single out
any companies or put a price tag on the groundwork.

Also on the table is a proposal to launch a small satellite, which could
cost anywhere from $55 million to more than $100 million, depending on the
manufacturer, launch vehicle and whether the satellite is injected into a
national Iraqi orbital slot or Intersputnik's. Intersputnik is already
speaking with both Western and Russian satellite producers, including the
Khrunichev space center.

Barring legal or financial snarls, the first part of the project to lease
satellite capacity could be realized in a few months, Veshchunov said.

Lysenko said a likely financing scenario would be via the UN's oil-for-food
program, whereas Alfa would receive crude oil as payment. Alfa hopes such a
financing scheme would meet the terms of Article 50 of the UN charter, which
grants third-party countries hurt by sanctions the right to cooperate with
the sanctioned country to limit economic losses.

Alfa Eko is also making headway circumventing UN sanctions in the oil
industry: The company's early-April trip to Baghdad resulted in the Iraqi
government announcing that Alfa would be given the right to develop several
major oil and gas deposits in the country, deals the parties hope also fall
within Article 50. Oil majors Slavneft and Tatneft have already struck
deals, approved by the UN, with Iraq to drill.

Both parties see sizeable potential in the telecoms project, which if
successful will be the first time Intersputnik has closed deals with Alfa
Eko and with Iraq. Veshchunov said that there is a huge volume of pending
traffic from other countries that can't be handled in absence of technical
facilities in Iraq.

"The Iraqis are very keen to do something about their telecommunications
sector because the shape and status of this sector today is very, very
poor," Veshchunov said.

Russia has been one of the most vocal nations in calling for an end to the

Intersputnik was created by 1971 as a joint satellite broadcasting tool for
Soviet bloc countries. It now has 24 member states, including India, Syria
and Yemen, Veshchunov said.

It has eight satellites in orbit and has commissioned two new ones.


MOSCOW, April 26 (Reuters) - Russian oil companies are jostling to grab
chunks of Iraq's huge oil reserves before the United Nations lifts sanctions
on the Arab country and Western firms move in.

Russian oil firms, bolstered by Moscow's close ties with Baghdad, are keen
to expand their supply base and tap into the second largest reserves in the

"Of course we are keen to expand our reserve base abroad and Iraq for us is
a good option, not only in itself but also as a platform for the region as a
whole," said Dmitry Dolgov, spokesman for LUKOIL, Russia's largest oil

LUKOIL was one of the first Russian firms to get involved in Iraq, agreeing
in 1997 to invest $4 billion over 23 years into the huge West Qurna oilfield
with total reserves of six billion tonnes. But work there has not progressed
because of sanctions.

While some Western firms such as TotalFinaElf, with exclusive negotiating
rights for the Majnoon and Bin Umar fields, are interested in Iraq, those
projects too are frozen.

But last December Russian firm Zarubezhneft became the first company to win
long-awaited U.N. approval to drill in Iraq to help Iraq maintain output
under the U.N. oil-for-food programme.

It got the go-ahead for an $8 million contract to drill 45 wells while
another firm Tatneft this year received a $4.8 million deal to drill 33

Slavneft said this week it would sign in May a deal to drill in the Suba
field with reserves of up to 110 million tonnes (800 million barrels).

"We plan to boost our output to 20 million tonnes (400,000 bpd) by 2005 from
12 million tonnes today. A considerable part of this growth will come from
our overseas fields including Iraq," said Slavneft spokeswoman Yekaterina

Media reports say Gazprom-affiliated Sibur and Stroitransgas are also
getting into the act, while a slew of companies supply oil industry

The U.N. approval to Zarubezhneft already opened the door for other foreign
firms to apply for similar ventures.

Russian companies are also the largest lifters of Iraqi crude under the
oil-for-food programme, accounting for about 40 million barrels so far this
year, half of that lifted by Zarubezhneft.

The oil companies are also keen to obtain a toehold in Iraq as part of the
quest to boost their presence abroad.

Slavneft earlier this week signed a deal to drill in Sudan and is eyeing two
other projects there while LUKOIL is active in Egypt's Melut field together
with Agip.

Alfa-Bank analyst Konstantin Reznikov said the Iraqi projects would allow
Russian firms to produce more at less cost.

"For one, Iraq is closer to markets, second, it is cheaper to produce oil
there than in Russia," Reznikov said.

"In Iraq, average production cost is about $2.5 per barrel while in Russia
it costs $3.5-$4.0, not including high taxes and shipping costs."

Russia has opposed U.N. sanctions against Iraq, saying they harm its
business interests and prevent it from recouping $8 billion of debts owed by
Baghdad. But analysts say the end of sanctions could bring problems for
Russian firms.

"Right now Russian companies are welcome in Iraq as no one else can go
there. They are not up against U.S., British and French competitors," said
Stephen O'Sullivan, energy analyst at United Financial Group. "But once
sanctions are over they will be one of 10 companies vying for a slice of the

But they say current easy access gives the Russians a chance to build
contacts which could stand Russia in good stead post-sanctions or when
"smart sanctions" which could promote other foreign oil work in Iraq, kick

"The sanctions are good for us," one Russian oil trader said. "We can
increase our influence and sign contracts for the most lucrative fields
before Western firms flock there."

But despite the head-start on Western rivals, the Russians could be spurned
once Iraq has a choice.

Baghdad, irritated about Russia's reluctance to violate U.N. sanctions, has
threatened to tear up LUKOIL's West Qurna deal saying there has been no sign
of the promised investments.

And in another possible sign of Baghdad's annoyance, LUKOIL has not received
contracts to lift Iraqi oil in recent phases.

But LUKOIL is treading carefully as it is keen not to jeopardise its chances
in the U.S., where it owns a filling station network and plans a New York

"However much Russia wants to develop its overseas oil business it still
wants international respectability," O'Sullivan said.


by Saifur Rahman, Dubai

Gulf News, 23rd April: A Dubai company which operates passenger ferry
services to Iraq has slashed fares by 40 per cent to encourage sea travel.
Naif Marine Services has reduced the cost of a return economy class fare
from Dh1,100 to Dh660, and has also reduced cargo rates.

General Manager Michael Nye said, "We have slashed the fare due to an
increase in passenger traffic. The new fare took effect last week and will
continue until the end of June. It will also encourage more Iraqi people to
come to Dubai, as well as inspire people to visit Iraq." Nye said the
reduction in cargo rates will also benefit the local economy.

"Most Iraqis come to Dubai to buy goods ranging from household electronic
items to clothes and accessories. The reduction will encourage them to buy
more." The reduced fares will encourage Shi'ite pilgrims to visit holy
shrines in Iraq by sea rather than by road, he said.

"We expect Iraq-bound traffic to grow as there are a lot of Shi'ite pilgrims
who want to visit their holy sites in Iraq," he said. Besides, Nye said, the
current fare from Dubai to Umm Qasr is much lower than the only other route
- Amman to Baghdad - which is Dh730 ($200). "A lot of people will consider
travelling by ship rather than by road as it is much safer as well as
cheaper." The one-way sea trip between Dubai and Umm Qasr takes 36 hours.

Naif Marine Service received permission to operate direct ferry services to
Iraq in November 1998 and carried 12,000 passengers in 2000. But after
adding a second ship to the service in February, passenger traffic has
increased steadily.

Nye said 2,000 passengers travel each month on the two ships - Jabal Ali 1
and Jabal Ali 2 - which make two trips per week to Umm Qasr. A third vessel,
Jabal Ali 3, is being refurbished and may join the fleet shortly if traffic
warrants. "We will review the passenger traffic in June to assess the
situation. Then we will decide whether to bring the fare back to the
previous level or not," Nye said.

Times of India, 26th April

BAGHDAD: The United Nations should shrink the demilitarized zone along the
Iraq Kuwait border, an official Iraqi newspaper said in an editorial on
Wednesday that also accused the U.N. mission monitoring the zone of leaving
key information out of reports on violations of the zone.

"It is time for Iraq to demand a decrease of the demilitarized zone on the
Iraqi side of the border with Kuwait, to five kilometers instead of 10," the
Ba'ath ruling party newspaper al Thawra said Wednesday. The zone is five
kilometers wide on the Kuwaiti side of the border.

The U.N. observer mission known as UNIKOM monitors the demilitarized zone
and reports back to the United Nations on air, land or sea violations of it.
The demilitarized zone, which Iraq accepted after the 1991 Gulf war, was
designed to ensure Iraq's troops stayed well away from Kuwait.

In February, U.N. Secretary-General Kofi Annan responded to Iraqi concerns
about the observers' failure to report U.S.-British warplanes that strike on
Iraqi targets from the zone. Annan said then that UNIKOM had recorded more
than 200 aerial violations of the zone since 1991, but that "it has not been
possible for UNIKOM to identify the aircraft involved or to determine their

Al-Ba'ath newspaper raised its concerns again Wednesday, saying "UNIKOM
ignores facts ... related to the daily aggression by American and British
warplanes on Iraqi cities and villages using Kuwaiti bases and skies."

The mission describes the planes as unidentified, the newspaper said, adding
that "we describe this attitude as bias and collaboration because, contrary
to its pretext, UNIKOM does not need high-tech equipment to detect those
hostile warplanes."

Al-Thawra also accused UNIKOM of employing locally far more Kuwaitis than
Iraqis and said the mission should no longer be allowed to keep an
observation post at the old Iraqi naval base at the port of Umm Qasr in the
demilitarized zone.

The newspaper claimed that the post, set up to keep watch for any sea
violations, facilitates spying activity against Iraq and Kuwaiti attacks on
Iraqi vessels.

The paper said Iraq should "deny UNIKOM the privilege to use the Iraqi port
at the naval base in order to curb suspicious and aggressive activities
carried out by Kuwaitis and other parties". (AP)


by James Dao New York Times Service
International Herald Tribune, April 27, 2001

WASHINGTON: A Pentagon investigation into a bombing that killed six people
in Kuwait last month has concluded that a navy pilot mistook an observation
post for a target and recommends that he be disciplined, military officials
said. But the report, which has not yet been made public, also assigns some
blame for the bombing to two air traffic controllers who helped guide the
F/A-18 pilot toward the observation post and then authorized him to release
three 500-pound (225-kilogram) bombs, the officials said Wednesday.

Five American servicemen and an army major from New Zealand died in the
incident at the Udairi Range near the Iraq border, while three other
Americans were seriously injured. The officials said that the report would
probably not include specific recommendations on how the three men should be
disciplined, leaving that decision to their commanders in the navy and air

For the pilot, Commander David Zimmerman, the head of an F/A-18 squadron,
punishment could mean being stripped of his command, being forced into
retirement, or being reprimanded, military officials said.

The report also said that at least three other incidents occurred in the
months before the March bombing in which pilots dropped bombs in the wrong
places at the Udairi Range, the Pentagon officials said. The investigators
concluded that the targets might be difficult to see from the air, and
recommended that the army improve its management of the range.

The report was prepared for General Tommy Franks, chief of the U.S. Central
Command, which oversees American military operations in the Gulf region.

The report recounts a rapid series of blunders on the evening of March 12
that began with Commander Zimmerman mistakenly identifying a staffed
observation post as his intended target, which was about a mile away. At the
time, Commander Zimmerman was flying at about 10,000 feet (3,000 meters).
After flying once over the target area, Commander Zimmerman banked and
prepared to begin his bombing dive. At the observation post, an air force
ground spotter was using an infrared beam visible through night-vision
goggles to point the pilot toward the intended target. But for reasons that
remain unclear, Commander Zimmerman focused on the source of the beam
instead of the target. As he finished his bank, the officials said,
Commander Zimmerman received what sounded like assurances that he was on
course from a navy air traffic controller who was flying in a nearby F-14.

In fact, his aircraft was pointed at the observation post.

Moments later, after Commander Zimmerman had programmed his aircraft to aim
at the wrong target, the air force controller at the observation base
authorized him to drop his bombs, using the code words "cleared hot." Almost
immediately, the controller realized the F/A-18 was aiming at him, and tried
to abort the mission. But it was too late.

The investigators found that the ground-based air controller was distracted
while Commander Zimmerman was preparing his run, causing him to take his
eyes off the jet for a brief time.

Baghdad, Reuters, 29th April

Iraq said U.S. and British planes raided the south of the country yesterday,
killing one person and injuring two, but Britain denied the report. A
military spokesman, quoted by the official Iraqi News Agency INA, said U.S.
and British jets attacked civilian targets in Najaf province, 160 kilometres
south of Baghdad.

A British Ministry of Defence spokesman in London gave a different version
of events. "We did have a coalition patrol flying over southern Iraq today
in the no-fly zone," he said, referring to the swathe of southern Iraq from
which Iraqi aircraft have been banned for the last decade. "They were
attacked by Iraqi ground forces, but there was no response ­ no weapons were
dropped," the British spokesman said.

The Iraqi spokesman said the planes also flew over the provinces of Basra,
Dhiqar, Muthanna and Qadissiya. Iraqi anti-aircraft defences forced them
back to their bases in Saudi Arabia and Kuwait, he added. An Iraqi official
said authorities would take Western journalists to the scene of  incident




DUBAI, United Arab Emirates (Associated Press, Sun 22 Apr 2001) ‹ The United
Arab Emirates has announced that it will punish the owners of ships caught
transporting smuggled Iraqi oil in its waters.

The foreign minister raised the issue at a meeting of a task force formed
after a ship sank off the Emirates coast and leaked smuggled Iraqi oil last
week, the official Emirates News Agency reported Saturday.

The minister, Sheik Hamdan bin Zayed Al Nahyan, did not elaborate on what
steps the Emirates would take. He said his government would act against
locally owned companies or those with branches in the country.

The Georgian-flagged Zainab sank about 17 miles off Dubai on April 14,
spilling oil that forced the closure of several water desalinization plants
in the Emirates.

During the past week, oil has washed up along coasts of the emirates of
Dubai, Sharjah and Ajman. Hundreds of municipal workers are involved in the
cleanup. Dead fish and oil coated birds littered the coast.

The ownership of the Zainab was unclear.

An exception to the U.N. trade sanctions imposed on Iraq after it invaded
Kuwait in 1990 allows Iraq to sell oil as long as it uses most of the
proceeds to meet the needs of the population.

Vessels caught by carrying oil from Iraq without U.N. approval are auctioned
off, as is the smuggled oil.

The U.S.-led force charged with intercepting smugglers has impounded 24
ships found to be carrying illegal Iraqi oil this year, said a spokesman,
Cmdr. Jeff Gradeck.


HALIFAX (CP) -- Canadian warships enforcing a UN embargo against Iraq have
been denied permission to board suspect vessels if the crews show any

Newly released documents show that Canada's heavily armed frigates
patrolling the Arabian Gulf are operating under a Canadian policy that
prevents them from acting against alleged smugglers if the vessels take
evasive action.

The restriction limited the operations of HMCS Calgary, which completed a
five-month deployment to the Arabian Gulf on Nov. 30.

Calgary was sent to join American and British warships under Defence
Department orders issued last May 1 that specifically included
"non-co-operative boardings."

But those orders changed sometime after the ship sailed from Esquimalt,
B.C., limiting the crew's ability to act.

"As a result, Calgary was not able to participate in any non-co-operative
take-downs of smuggling vessels during the entire operation," says an
internal report on the mission.

"This restriction was initially not well known to our allies."

The Nov. 28 report was obtained under the Access to Information Act.

The released document has several deletions containing information that the
Defence Department claims could harm international affairs or the defence of
Canada if made public. The deletions include details of Calgary's rules of

The captain of HMCS Calgary, Cmdr. Tim Howard, turned down a request for an
interview, referring all questions to Ottawa. Military spokesmen in Ottawa
declined to provide reasons for the boarding restriction, saying it's

A navy official in Halifax confirmed that the frigate that replaced HMCS
Calgary in the Arabian Gulf, HMCS Charlottetown, is operating under the same

Charlottetown, equipped with a Sea King helicopter and a wide array of
weaponry, sailed from Halifax in January with a crew of 235. It is to return
on July 11.

Canada's frigates may not act against "vessels that will not readily submit
to a boarding," Lieut. Yves Vanier, a public affairs spokesman in Ottawa,
confirmed in an interview.

Unco-operative vessels are those that ignore orders to slow down or to
change course, that head to shallow waters or that seek out the protection
of the 12-nautical-mile territorial limit of countries in the region, Vanier

He declined to provide further information about the policy.

HMCS Calgary carried out seven co-operative boardings and inspections during
its mission with the American destroyers USS Milius and USS Oldendorf.

"We've had an extremely good relationship with all of the vessels we've
boarded," the frigate's combat officer, Lt.-Cmdr. Art McDonald, said during
the mission.

Canadian navy spokesmen said the American crews were responsible for
carrying out any so-called non-compliant boardings.

Canada's frigates in the Arabian Gulf are operating under the command of the
American-led Fifth Fleet.


UNITED NATIONS (Reuters, 25th April) - The United States, France and Britain
joined forces this week in blocking a Swiss trading firm from purchasing
more oil from Iraq after it illegally diverted a shipment for the United
States to Europe.

The move against Glencore International AG, a commodity trading firm, was
unusual as it is rare that all three countries agree on controversial issues
concerning Iraq that come before the Security Council's sanctions committee.

Glencore, a trading company which does not own refineries, was founded in
the 1970s by U.S. commodity trader Marc Rich, who then sold the company. It
is a key purchaser of Iraqi crude.

The United States and France spoke against Glencore Monday and Britain

Glencore had bought 1 million barrels of Iraqi Kirkuk crude in February for
delivery to the United States under the U.N. humanitarian program for Iraq.
Instead the shipment was diverted to Croatia, where the oil was sold for an
additional $3 million in Europe that did not go to the United Nations.

Glencore last week agreed to pay $3 million into the United Nations account.
When the company then applied to raise by 2 million barrels the amount of
crude it wanted to buy from Iraq, to a total of 13 million barrels, the
Western nations balked.

In a letter to the United Nations, obtained on Wednesday, Glencore said the
crude was going to be stored in Croatia before being transferred to the
United States.

"We have always been, and will continue to be, totally committed to fully
respecting and observing all U.N. regulations," said the letter from
Glencore (UK) Ltd.

But U.N. oil experts earlier expressed skepticism over Glencore's contention
it was only storing the oil.

Iraq contends it is monitoring customers closely. If we see anything wrong,
we will ask them to rectify it," one official told Reuters in Dubai.

Under the U.N. humanitarian "oil-for-food" program, Iraq is allowed to sell
oil to purchase humanitarian goods and other supplies to ease the impact on
ordinary Iraqis of U.N. sanctions imposed after Iraq's 1990 invasion of
Kuwait. The monies have to be paid into a U.N. escrow account from which
suppliers of goods Iraq purchases are paid.

The United States and Britain want Glencore to explain the diversion of
crude to Croatia. They want the sanctions committee to ask Switzerland to
investigate the firm.

Britain, in its letter to the committee, also asked Glencore to divulge
aspects of its oil dealings with Iraq, including details of how and to whom
it resells any Iraqi crude.

France has not asked for an explanation from Glencore. But it wants the
committee to give a warning to the company that no further irregularities
would be tolerated.

The council's Iraqi sanctions committee is often deadlocked on major issues.
France, Russia and China, sympathetic to Iraq, usually oppose the United
States and Britain and vice versa.

Recently, the United States and Britain attempted unsuccessfully to pare
down the list of 600 international companies authorized by the United
Nations. This might eliminate shady traders allegedly paying Iraq oil
surcharges in violation of U.N. sanctions, they said.

Glencore is the second company whose applications will be reviewed by the
United Nations on a case-by-case basis. A South African-based firm, Montega
Trading PRY Ltd., in February diverted oil destined for the United States to

Most large international oil companies have been wary of doing business with
Iraq since last year when it reportedly attempted to impose an illegal
surcharge on oil purchases to get more cash that did not flow through the
U.N. programs.

by Tanya Goudsouzian

Dubai (Gulf News, 29th April): Iraq-bound cargo ships docking in Dubai are
reluctant to sail for Basra because they fear intensified naval inspections
after the ill-fated Zainab was caught smuggling oil.

Crewmen have denounced the actions of the UN's Multinational Interception
Force as "piracy", in which ships are halted in mid-journey and "ransacked"
by inspectors who descend upon them by helicopter.

Shipowners put off departure dates, dreading confiscation of their ships
"for arbitrary reasons". Traders lament the rotting of their merchandise due
to excessive delays in arrival.

Cargo ships bound for Iraq's Khor Al Zubair port are subject to rigorous
inspections in international waters. According to figures provided by the
British Embassy, smuggled Iraqi oil exports amounted to $600 million last

However, mariners say these inspections delay the three-day journey often by
up to 48 hours, depleting the crew's supplies of food and fresh water and
causing perishable cargo to spoil in the heat and humidity.

"The situation was always bad, but the Zainab incident has worsened the
matter," said Sabah Abbas, an Iraqi marine agent whose company, Sumar
Shipping, has been transporting "whatever the UN allows" to Iraq for eight

"The ships are not only delayed by inspections while loading, but also in
mid-journey. They delay them as they load, they delay them on the way. At
least three days' delay," he said.

Abbas usually works with an average of 10 ships a month, but claims none
have docked in Dubai or set sail for Basra this month.

"We have commodities here waiting to be transported to Iraq - sugar, oil,
tea, rice - but there are no ships ready to take them. Either they are under
surveillance in Iraq, or too scared to leave Dubai just yet," said Abbas,
adding that he has lost more than Dh15,000 in the past two weeks.

"The problem is mainly due to the sanctions. If the sanctions are lifted,
everything will go smoothly, everyone will be happy, everyone will be able
to do business, including the Americans and the British."

Bassam Jawad, an Iraqi owner of two cargo ships, said one ship is held up in
Iraq for inspection. The second was confiscated in February and retrieved at
an auction in Abu Dhabi last week. The Bassam I is now docked at Hamriya
Port in Dubai.

"Iraqi businessmen are not the only ones suffering. Some of the ships are
owned by foreigners and they face the same difficulties. We're all in the
same boat, he said." The Bassam I was confiscated along with $10,000-worth
of diesel because the MIF accused it of smuggling oil which was intended to
fuel the ship's return trip, Jawad said.

"The Americans are under the impression that all ships coming from Iraq are
smuggling oil. They turn the cargo upside down. It is a nightmare for us,"
said Abbas, citing one ship that was scheduled to sail yesterday. Its owners
finally resolved to send the ship after hesitating for two months.

The ship's captain was on site on Thursday as the loading operation was
underway. He said his concern was not the journey to Basra, but his trip
back to Dubai when he would be carrying nothing but his fuel bunker.

The captain, who asked not to be named, said, "When we go UAE-Iraq, we have
cargo, they check, and there's no problem. It's when we come back that I am
scared. Refueling our bunker is much cheaper in Iraq than in the UAE, so we
prefer to purchase diesel from there. Sometimes I have orders from Sri
Lanka, or India or Pakistan. I need the fuel. But mid-way, they stop us and
if we are carrying more fuel than they think we need, they confiscate the
ship, arrest the crew and we lose everything."

The ship's captain described a routine inspection: "They come by helicopter
and they stop the ship. My crew is relegated to the deck while over a dozen
inspectors go searching the ship. For over four hours, under the hot sun or
rain, my men must stand outside.

If they want to use the bathroom, it takes 40 telephone calls to get
clearance. And if permission is granted, my unarmed crew member is followed
by a security officer who points a gun to his back as if he were a criminal.

"Sometimes they stop the ship for two to three days. If we hit high seas,
where speed is reduced and the journey will take longer than it normally
would, we risk not having enough provisions and fresh water," he said.

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