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resolution news round-up



Here's a collection of recent pieces on the ongoing rangle, including all
the stuff from today's broadsheets. Note that the new Secretary-General's
report is just out (www,un.org/Depts/oip)

Best wishes,

Gabriel

****************************************************

* Baghdad threatens to suspend oil-for-food, Financial Times, May 24
(letters.editor@ft.com)
* Britain struggles over Iraq 'smart sanctions' plan, Daily Telegraph, 24
May (dtletters@telegraph.co.uk)
* Russia blocks smart sanctions against Iraq, Guardian, 24 May
(letters@independent.co.uk)
* Major Powers Split over Iraq, Associated Press, 23rd May
* Long and Short of Iraq Sanctions, Washington Post, 23rd May
* Main points of British-American proposals for Iraq. , 23rd May
* Plan for Lifting Iraqi Controls is delayed, New York Times, 23rd May
* China, Russian won't rush to help [sic] Iraq, Associated Press, 22nd May
* U.S. Seeks Funding For Iraqi Neighbors, Washington Post, May 22nd,
* UN Council Powers Discuss Easing Iraqi Sanctions, Reuters, May 21st
* U.S., Allies Considering Iraq Sanctions 'Refocus', Reuters, May 20th


**************************************************************

Baghdad threatens to suspend oil-for-food
Financial Times; May 24, 2001
By CAROLA HOYOS and ROULA KHALAF

Iraq is threatening to suspend the United Nations-monitored oil-for-food
programme if the Security Council agrees to US proposals aiming to ease UN
sanctions on civilians while tightening them on the regime.

The Iraqi threat, designed to derail the US proposals, is taken seriously by
oil analysts, who are warning of a possible disruption in the 1.8m barrels a
day of Iraqi oil supplies, sold mostly through the UN programme.

Tariq Aziz, deputy prime minister, has informed diplomats in Baghdad that
"if the Security Council adopts the resolution. . . with the proposed
American elements and ideas. . . then the government of Iraq will halt the
oil-for-food programme and not a single barrel of oil will be sold under
this programme," according to agency reports from the Iraqi capital.

Kofi Annan, UN secretary-general, said: "If Iraq were to turn off the taps,
then we'll be in a very serious situation," adding that the UN would be
unlikely to raise the funds necessary to continue the humanitarian programme
in Iraq.

The US proposals are contained in a UK-drafted resolution that was
distributed to Security Council members on Tuesday. The draft calls for
streamlining the oil-for-food deal under which Iraq sells unlimited amounts
of oil to buy civilian goods. It would allow civilian products to enter Iraq
more easily while prohibiting a list of goods that could be used for
military means. The UN would, however, continue to control Iraq's finances,
thereby angering Baghdad.

Russia, meanwhile, has put forward competing ideas that Baghdad prefers.
They include reducing to 20 per cent the share of Iraq's revenue that goes
to repaying Kuwaiti war debts (a suggestion supported by France), radically
loosening travel restrictions in and out of Iraq, and resolving within the
next two months the Dollars 3.7bn of contracts blocked by the US and UK.

But diplomats say Russia, Iraq's closest ally on the security council, is
simply trying to delay implementation of the US proposals. Though France
views the UK draft resolution as the basis for discussions, there are
differences about which items will appear on the list of prohibited imports
to Iraq under the UK/US plan. Most controversial are computers and
telecommunications equipment which the US defines as "dual-use" goods.


*************************************************

ISSUE 2190 Thursday 24 May 2001

Britain struggles over Iraq 'smart sanctions' plan
By Anton La Guardia, Diplomatic Editor

  A BRITISH initiative to introduce "smart sanctions" against Iraq has run
into trouble after Russia and China immediately raised objections and Iraq
threatened to cut off oil supplies to its neighbours.
One Russian diplomat said: "We will not accept this idea of smart sanctions.
This is not about easing the sanctions but about strengthening them. We
believe the sanctions should be lifted."

The British proposal, presented at the United Nations on Tuesday night, aims
to end many of the sanctions on civilian supplies to Iraq while maintaining
the UN's control of Iraq's finances and restricting the smuggling of goods
into the country. The new policy is an attempt to fend off criticism that
the decade-old embargo has caused a humanitarian tragedy in Iraq.

But it depends on the support of Russia and China - both permanent members
of the UN Security Council with veto powers - and the co-operation of Iraq's
neighbours, which have profited handsomely from the smuggling trade.

A key element would be for neighbours to tighten their borders with Iraq,
with what British officials describe as "assistance" from the UN. Britain,
supported by America, had hoped to have the resolution passed before the
June 4 deadline for the Security Council to approve the next phase of Iraq's
oil-for-food programme.

But Brian Wilson, the Foreign Office minister, conceded that the vote could
be delayed and the proposal would need "refining". He said: "It is more a
case of getting it right rather than working towards a particular deadline."

Russia said the proposals did not go far enough and tabled a rival
resolution calling for an extension of the current oil-for-food programme
and future discussions on how it should be changed. China does not accept
the proposals. Turkey, Iran, Jordan and Syria all draw profits by buying
Iraqi oil at heavily discounted prices or from cross-border smuggling.

Western diplomats said the UN could set up a mechanism to protect their
economies - for example by paying them compensation from Iraq's escrow
account if Baghdad retaliates by cutting off oil supplies. Iraq renewed its
threat to stop oil exports under the UN's oil-for-food programme if the
"smart sanctions" are approved, a move that could send world crude prices
soaring once more.

Iraq's deputy Prime Minister, Tariq Aziz, urging his country's neighbours to
oppose the changes, said: "Iraq will never allow the programme to serve as a
cover for the embargo."





****************************************************************************

Russia blocks smart sanctions against Iraq

Brian Whitaker and Amelia Gentleman
Thursday May 24, 2001
The Guardian

British and American plans for "smart" sanctions against Iraq ran into
trouble yesterday when Russia - which has a veto in the UN security
council - sought to block any changes for six months.

Britain and the US are hoping to have their plans approved by June 3, when
the current phase of the oil-for-food programme expires.

The smart sanctions would allow non-military goods to enter Iraq freely and
lift the ban on commercial flights.

But Iraq is angry because its oil revenue would still be channelled through
the UN and, with a planned clampdown on illicit sources of income such as
smuggling, UN control over the Baghdad regime's finances could become
tighter than ever.

Details of an alternative proposal from Russia were not made public in
Moscow, and a spokesman at the ministry of foreign affairs would say only
that it was an extension of the current oil-for-food programme with
modifications.

Russian media reported that the Iraqi deputy prime minister, Tariq Aziz, had
called on Russia privately to use its security council veto to stop the
US-British plan.

A western diplomat at the UN said yesterday: "The Russian behaviour is
absolutely absurd because the British draft moves forward, in a way that
others have been looking for, and would have a real, positive impact.

"They're doing this purely to please Iraq and serve their commercial
interests."

Russia is eager to recoup several billion dollars of debt that it is owed by
Iraq - unpaid bills for arms supplies and Soviet-era debts related to the
development of Iraqi industry - and officials in Moscow hope that if
sanctions are lifted, some of this money may be paid back.

Russia is also keen to unfreeze a series of lucrative energy contracts with
Iraq.

Moscow's official line on Iraq was set out yesterday by the deputy minister
of foreign affairs, Vladimir Sredin, who said that Russia favoured the
lifting of sanctions in exchange for the resurrection of international
monitoring of Iraq's weapons of mass destruction programme.

A UN source said France - another security council member sympathetic to
Iraq - was "being a lot more constructive" on the proposed changes in
sanctions than Russia.

Iraq, meanwhile, threatened to halt exports under the oil-for-food programme
if the British-US plans take effect.

Tariq Aziz told Baghdad newspapers: "If the security council adopts the
project which has been submitted, the Iraqi government will not sell a
single barrel of oil under the oil-for-food programme."

Iraq attempted to panic oil markets last winter by interrupting supplies,
but with little effect. It has also threatened to punish Jordan and Turkey,
which depend on Iraqi oil supplied outside the UN programme - if they
cooperate with smart sanctions.

The US state department has already contacted both countries to discuss ways
of fending off Iraqi reprisals.

"We have to make clear it's unacceptable for any UN member state to threaten
other states with retaliation for compliance with a UN resolution," its
spokesman, Richard Boucher, said.

The British-American plan would move away from a system where all imports to
Iraq must be scrutinised except for those on a fast-track list. Instead,
everything would be allowed in automatically - except items listed as having
military use or military potential.

A British diplomat at the UN said: "This should give us cleaner, more
transparent and consistent - and therefore more effectively enforced -
control of the goods under concern."




*******************************************************

Wednesday May 23 3:01 AM ET

Major Powers Split Over Iraq
By DAFNA LINZER, Associated Press Writer

UNITED NATIONS (AP) - Irked by a U.S.-British plan on Iraq that was forged
in secret and thrust at them with a demand for quick action, the other
permanent members on the U.N. Security Council seem set to rebel - splitting
the powerhouse nations once again over how to deal with Baghdad.

Dueling initiatives - one formally submitted by Britain, the other by
Russia - fractured the inner-core of the council along traditional lines
Tuesday. Washington and London called for an overhaul on sanctions by June
4. Moscow, Paris and Beijing said they need more time. Any one of the five
could use their veto power to torpedo a resolution.

French, Russian and Chinese diplomats complained, some privately, that the
British proposal went too far, too fast.

One French diplomat said the two English-speaking allies made a mistake by
trying to push through a complex and technical plan - that includes lists of
hundreds of so-called military items that would be banned from Iraq - in
just eight working days.

And a Russian official was angered that the lists - which were given to the
permanent members on Monday - were held back from the 10 rotating members on
the council.

The U.S.-British proposal seeks to reform what goes in and what is kept out
of Iraq by detailing prohibited items rather than goods that are allowed to
be imported. Diplomats from the two nations say the new plan is designed to
keep President Saddam Hussein from rearming 11 years after he invaded Kuwait
and lobbed missiles at Saudi Arabia and Israel.

Acting U.S. Ambassador James Cunningham said those lists were still being
worked on. ``It's a highly technical exercise,'' but, he said, they would be
circulated ``in the near future.''

In any case, China's deputy ambassador Shen Guofang said his government
needs time to study the U.S.-drafted lists and accompanying explanations,
which diplomats said were about 30 pages long.

``I doubt we can reach any consensus shortly,'' Shen said Tuesday, adding
that a routine extension of the existing oil-for-food program might be the
best way to go right now.

That's what Russia, a key Iraq supporter, is offering, along with a few
added incentives for Baghdad.

Iraq's Ambassador, Mohammed Aldouri, would not comment on the Russian
proposal - which would reduce Iraq's compensation payments to victims of its
1990 invasion - but rejected the other one outright. He said Iraq opposed
British attempts to change the nature of trade between his oil-rich nation
and neighboring Turkey, Jordan and Syria.

The British plan would allow the three, which have lost billions of dollars
in trade with Iraq over the last decade, to legally import up to 150,000
barrels a day and pay for it in cash or goods.

The five permanent members of the Security Council have been at odds over
how to deal with Iraq every since U.N. weapons inspectors left the country
in December 1998, complaining that Saddam was not cooperating with them.
Shortly afterward, Britain and the United States carried out air strikes
against Iraq. The two allies also maintain strict no-fly zones over Iraqi
air space - leftovers from the Gulf War.

Their tough line against Iraq has left them open to criticism. Some say that
was the impetus for the joint initiative, worked on behind closed-doors for
months, which aims to lift sanctions on civilian goods. U.S. and British
officials say they also wanted to rob Saddam of a way to blame the West for
the humanitarian crisis facing his people.

In a report to the Security Council Tuesday, U.N. Secretary-General Kofi
Annan said the oil-for-food program had contributed to improving the living
conditions of the average Iraqi over the past four years. But he noted that
Iraq has reduced its participation in recent months.


***************************************************************

Long and Short of Iraq Sanctions
U.S. Trying to Sell U.N. Simultaneous Easing and Tightening

By Alan Sipress
Washington Post Staff Writer
Wednesday, May 23, 2001; Page A29

In an age of sound bites, the Bush administration has been forced to speak
about its new Iraq policy in compound sentences. The American initiative to
recraft the global embargo on Baghdad represents an easing of sanctions and
a tightening of them: a simultaneous lifting of restrictions on most
civilian imports and a stiffening of controls over oil revenue and items
that can be turned to military uses.

Administration officials hope this will meet mounting international demands
to lighten up on the hard-pressed Iraqi people and mollify Capitol Hill
critics who worry that the United States is about to retreat from its
11-year standoff with Iraqi President Saddam Hussein.

"There is no question they have to sell this to very different audiences,"
said Henri J. Barkey, an Iraq expert and former State Department official.

At the United Nations, where a U.S.-backed resolution to overhaul Iraqi
sanctions was formally introduced yesterday by Britain, acting U.S.
Ambassador James B. Cunningham emphasized the relief that it would offer
Iraq's civilian economy. "We are trying to adopt a new approach that will
free up most of Iraq's legitimate trade in ways that members of the
international community and Iraq have been urging for some time," he said.

At the State Department, meantime, officials are reluctant to call it a
"sanctions" policy at all. They highlight the goal of limiting Iraq's
ability to develop weapons of mass destruction by calling it an "arms
control" initiative.

Yet in nearly every sentence they utter about the new Iraq policy, American
diplomats, from Secretary of State Colin L. Powell on down, painstakingly
mention both the civilian and military elements. This is the grammar of a
complex foreign policy.

With the approach of a June 4 deadline for the United Nations to renew the
sanctions program, American efforts have been directed primarily toward
winning the backing of the Security Council for a new set of restrictions.
"The Europeans are the linchpin of this," Barkey said.

Across Europe, governments and public opinion have long clamored for an
easing of civilian restrictions, refusing to accept the American argument
that Saddam Hussein alone is to blame for the suffering of ordinary Iraqis.
Winning broad European support for the new sanctions could help ensure the
critical backing of France, a permanent Security Council member that so far
has welcomed the proposal without signing off on the details.

U.S. diplomats expect a rough-and-tumble negotiation with the French over
the Iraqi imports that will remain subject to U.N. review. The French want
to allow a free flow of more types of items than do American officials, who
say they are concerned about imports that could be diverted to the
development of nuclear, chemical and biological weapons. Administration
officials also anticipate France will seek greater latitude for its
companies to invest in Iraq's oil industry.

If the French agree to the proposal, U.S. and European officials expect
Russia would come under pressure to agree too. China could then fall into
line, removing any opposition among the five permanent members.

European support would also help in gaining the assent of Iraq's neighbors,
whose cooperation with the new border controls is essential to end
widespread smuggling.

Front-line states, including Jordan, Syria and Turkey, want to ensure that
the new border restrictions do not hurt their struggling economies and are
looking for opportunities to revive civilian trade with Iraq. Citing the
hardships of the Iraqi people, Arab leaders have long called for the
economic embargo to be lifted.

"It's difficult for them to support any program seen as harmful to fellow
Arab civilians. They have their own public opinion to worry about," said
Robert H. Pelletreau, a former assistant secretary of state and ambassador
to Egypt. Even Kuwait, which was overrun by Hussein's army 11 years ago, has
told U.S. officials it is time to ease the civilian sanctions.

Though Turkey is not an Arab country, it has also asked that the civilian
sanctions be eased. "We are concerned that the social fabric of Iraq has
been seriously damaged. As our next-door neighbor, this is a serious concern
for us because we have to live with Iraq for the rest of our lives," a
Turkish official said.

On his first extended trip as secretary of state, Powell toured several Arab
capitals in late February, assuring leaders that the United States was
willing to eliminate most civilian restrictions. But when the proposal was
reported in the American press, State Department officials objected to
headlines characterizing the initiative as "lifting" sanctions. Officials
redoubled their efforts to describe the proposal for the domestic audience
as a tightening of the military sanctions.

"Early in its term, the Bush administration doesn't want to be seen as being
soft . . . on Iraq's potential weapons program," Pelletreau said. "It isn't
consistent with the message it was trying to send in the campaign and after.
It doesn't help the administration with its own congressional constituency."

The administration already faces skepticism from some lawmakers, including
fellow Republicans, who fear the new controls will fail to stem Hussein's
military ambitions.

"If they talk about it as being an arms control proposal, they are trying to
fool everybody, including themselves," said a Capitol Hill staffer. "This is
nothing other than a retreat."

But Sen. Sam Brownback (R-Kan.), who chairs a Middle East subcommittee, said
that easing civilian sanctions will help build international support for the
United States' broader Iraq policy, which will ultimately include support
for the overthrow of Hussein.

Special correspondent Colum Lynch, at the United Nations, contributed to
this report.




*******************************************************************

Main points of British-American proposals for Iraq.

UNITED NATIONS, May 23 (Reuters) - Following are highlights of a new
British-American U.N. Security Council resolution that eases
restrictions on civilian goods going to Iraq and seeks an end to
smuggling.

The draft was submitted on Tuesday to the 15-member council in hopes
it can be adopted by the end of the month but approval is far from
certain. The resolution would:

- CIVILIAN GOODS: authorize the "sale or supply" of goods to Iraq for
civilian use other than those on a banned list of military-related
items.

- "DUAL USE" LIST: calls for another list of "dual use" items that
can have both civilian and military applications. A council sanctions
committee would have to review these goods. Currently many supplies
are approved by the committee individually and can be blocked by any
one member.

- OIL ESCROW ACCOUNT: leaves intact a U.N. escrow account, which
receives proceeds from Iraq's oil sales. The United Nations uses the
money to pay suppliers of goods Iraq wants to import and sets aside
funds for reparations to Kuwait and other Gulf War victims.

- COMPENSATION FUND: The draft does not renew the lowering to 25
percent from 30 percent the level of Iraq's contributions from its
oil revenues to a reparations fund for Gulf War victims. But it is
expected France would insist Baghdad's rate stay at 25 percent or
lower and the United States and Britain would compromise.

- NEIGHBORING STATES: proposes each of Iraq's neighbors including
Syria, Turkey and Jordan, be allowed to purchase up to 150,000
barrels a day of Iraqi oil. Payment can go into new "national escrow
accounts" to be used by Iraq to buy civilian goods or for barter
purposes. Secretary-General Kofi Annan is to recommend ways to do
this after which council members will have to give their approval.

- BORDER MONITORING: Annan is to "review and revise" procedures for
monitoring Iraqi exports "by land and sea," particularly in nations
bordering Iraq. He can provide funds for this by drawing from the
U.N. escrow account and can review applications for new authorized
border crossings to Iraq.

- OIL TRADERS: Annan is to draw up, within a month of adoption of the
resolution, recommendations on selecting companies and trading
organizations to purchase Iraqi oil. The purpose of this provision is
to eliminate traders who are paying Iraq an illegal surcharge outside
of the U.N. system.

- U.N. DUES: allows Iraq to pay its dues to the United Nations from
its escrow account, as Baghdad had requested.

- FLIGHTS: allows civilian aircraft to fly to Iraq from designated
countries, yet to be named, as long as its cargo can be inspected by
national authorities "in the presence of U.N. observers."
Notification must be given five days in advance.

- SELLING IRAQI PLANES: nations currently holding Iraqi civilian
aircraft can sell them, subject to approval by the council's
sanctions committee, and submit proceeds to the U.N. escrow account.

************************************************************************
May 23, 2001
Plan for Lifting Iraqi Controls Is Delayed
By BARBARA CROSSETTE
NITED NATIONS, May 22  Russia threw an unexpected roadblock today in the
path of an American and British proposal to allow free trade in civilian
goods with Iraq while tightening controls on military imports.

On the first day of Security Council debate on the plan, Sergey Lavrov, the
Russian ambassador, produced a counterproposal that would put off a decision
for six months. China and France also cautioned against haste, threatening
to derail or stall Council action well beyond the June 3 deadline set by
Britain, the sponsor of the resolution, and the United States.

By that date, the Council must extend  or revamp  the program that allows
Iraq to sell unlimited quantities of oil to pay for the needs of its
civilian population, who are living under sanctions imposed after Iraq
invaded Kuwait in 1990.

The proposal to lift controls on the import of civilian goods, and to make
travel to Iraq easier, was intended to rob President Saddam Hussein of the
excuse that foreigners are to blame for the suffering of ordinary Iraqis. A
major objection to the proposal appears to be over a list of prohibited
imports, which the United States is compiling. Apart from arms, Washington
wants to restrict imports of certain technologies, communications equipment
and some other goods.

Western diplomats hope that the Russian move is just an opening bid in what
will be long and tough negotiations.

Mr. Lavrov said after the Council meeting that he was not rejecting the
British and American proposal. "On the contrary," he said. "We want a
serious  and I stress a serious  and constructive discussion of the U.K.
draft, but we feel even at this stage that this will involve more time than
is left before June 4," the date the next phase of the "oil for food"
program would begin.

"We've seen the proposal by the United Kingdom to have what the U.K.
representative himself called a new concept, a radically new regime, and we
have quite a number of questions, starting with a list, which we are invited
to endorse and which is not yet made available."

The French, who have apparently seen an early version of the list and
decided that it was too broad, say it would be foolish to push ahead without
consensus on the Security Council, or at least among the five permanent
members  Britain, Russia, China, France and the United States  because a
divided Council is weak in the face of Iraqi defiance. Also, any of those
members, if isolated, could veto a resolution.

Ambassador Shen Guofang, China's deputy representative, said he had sent the
American and British proposal, which he described as "quite complicated,"
back to Beijing for review. "We need more time to study the resolution," he
said, adding that it would be handed to technical experts while officials
consulted with other governments.

"But I doubt we can reach any consensus shortly," he said. He predicted that
the current oil sales program would be continued in its present form while
discussions go on, seeming to support the Russian stand.

James B. Cunningham, the acting American representative on the Security
Council, said after the meeting today that the United States was refining
the list of suspect items and that he saw little reason for delay. "The
concept and thrust is clear," he said. "It should be negotiable before the
end of this phase."

The next two weeks will be critical for the Iraq proposal, one of the Bush
administration's first initiatives here. But the administration is still
operating without a permanent representative at the United Nations and has
not explained why it has not sent its nomination of John Negroponte to the
Senate for confirmation. Other positions at the American Mission are also
waiting to be filled.

Many diplomats say that unless the White House and State Department are
willing to engage in high- level negotiating on behalf of this Iraq
resolution, the United States may face another setback here only a few weeks
after losing seats on the United Nations Human Rights Commission and
International Narcotics Control Board.

While the British-American plan for Iraq would remove any remaining
restrictions on trade in consumer goods and material for rebuilding public
services, it would retain control of Iraqi oil profits through United
Nations-administered escrow accounts. Iraq must draw on those for purchases.
Some of that money is set aside for war reparations, for the Kurds in the
north and for United Nations expenses.

In general, sanctions imposed after Iraq's 1990 invasion of Kuwait, and
reaffirmed in 1991 after the gulf war, cannot be suspended or fully lifted
until the Iraqis allow arms inspectors to return.

The last inspectors in Iraq were withdrawn by the United Nations Special
Commission in December 1998, ahead of American and British bombing. After a
year of stalemate, during which Iraq did not permit the return of
inspectors, a new system, the United Nations Monitoring, Verification and
Inspection Commission, was created by the Security Council. Iraq has barred
its inspectors also.

This week, Iraqi officials said they would not cooperate with a new "oil for
food" program either. Western diplomats say Iraq's acceptance or rejection
is irrelevant to the Council's action. But in Baghdad on Monday, Deputy
Prime Minister Tariq Aziz threatened to suspend the "oil for food" program
entirely and to stop pumping oil.

Secretary General Kofi Annan, who met with the Security Council today to
discuss the Middle East, said he hoped that would not happen. "If Iraq were
to stop the program or refuse to participate in the program, the Secretariat
will have no means of providing assistance to the Iraqi people," he said.
"We use the resources from the sale of the oil to do that."

Mr. Annan said he hoped that the program would continue, since the effort
was intended to help the Iraqi people. "But if Iraq were to turn off the
taps," he said, "then we'd be in a very serous situation." Iraq has exported
more than $40 billion in oil since the current program began in 1996. Yet it
continues to stall in ordering needed supplies, according to a report
covering the last six months and submitted to the Security Council by Mr.
Annan on May 18.

"Much to my regret," he wrote, as of May 14 "the office of the Iraq program
had not received a single application in the sectors of health, education,
water and sanitation and oil spare parts." Orders for housing, electricity,
transportation, communications, food handling and agriculture fell below
targets.

On the other hand, the report said that nearly 18 percent of the total value
of contracts sent to the sanctions committee for review had been blocked by
Council members.


*********************************************************
Tuesday May 22 12:12 PM ET

China, Russia Won't Rush To Help Iraq
By EDITH M. LEDERER, Associated Press Writer

UNITED NATIONS (AP) - Iraq has rejected a British proposal to lift U.N.
sanctions on civilian goods, and its two main Security Council supporters,
China and Russia, indicated they're in no hurry to approve the U.S.-backed
plan.

Britain gave the other four veto-wielding members of the Security Council a
draft of its proposals at a meeting Monday and said it would formally
introduce the resolution to the full 15-member council on Tuesday.

Iraq has repeatedly demanded that all sanctions be lifted immediately, and
President Saddam Hussein on Monday flatly rejected the British proposal. He
said on Iraqi TV that it represented a ``declaration that the embargo
imposed on Iraq has failed to achieve its basic goals.''

The draft resolution would lift restrictions on all goods entering Iraq
except for a list of restricted items, legalize passenger and cargo flights
in and out of the country, and allow Iraq to use some of its oil money to
pay its back U.N. dues.

At the same time, it would keep U.N. financial control of Iraq's oil money
and attempt to toughen enforcement of the decade-old arms embargo against
Saddam Hussein's government and crack down on illegal Iraqi oil smuggling.

The British and Americans are pushing to have the easing of sanctions
incorporated into the next extension of the U.N. oil-for-food program, which
was established in late 1996 to help ordinary Iraqis cope with sanctions
imposed after Iraq's 1990 invasion of Kuwait.

The oil-for-food program allows Iraq to sell oil under strict U.N. financial
controls, provided the money goes to buy food and other humanitarian
supplies, repair the country's oil infrastructure, and pay Gulf War
reparations to Kuwait and U.N. administrative and operational costs.

``Our hope is to be able to use the time between now and the end of this
phase to get an agreement on a resolution that deals with a range of issues,
not just an extension of the phase,'' acting U.S. Ambassador James
Cunningham said after Monday's meeting with British, French, Russian and
Chinese envoys.

But China's deputy ambassador Shen Guofang told reporters there may not be
enough time between now and June 3, the deadline for another six-month
extension of the existing oil-for-food program.

``I doubt we can reach any consensus shortly,'' Shen said Tuesday. ``If that
is not the case, we hope that we should have a technical rollover,'' which
would extend the existing program.

Shen said the list is highly technical and includes many restrictions. He
and Russia's U.N. Ambassador Sergey Lavrov, said they needed time to study
it. French diplomats called the British proposal a step in the right
direction, but also stressed the text needed careful study.

Under Security Council resolutions, sanctions imposed after Iraq's invasion
of Kuwait can be lifted only after U.N. weapons inspectors declare that
Iraq's weapons of mass destruction have been eliminated. Baghdad has barred
U.N. inspectors from returning to the country for nearly 21/2 years.

Hours after Saddam rejected the proposal, Deputy Prime Minister Tariq Aziz
said Iraq would suspend the U.N. oil-for-food program if the United States
interfered in its renewal.

``If the United States of America included in the extension of the
(oil-for-food) program the services of American citizens to serve its plots
and aggressive program against Iraq, we will stop dealing with the
program,'' Aziz was quoted by the official Iraqi News Agency as saying late
Monday. He did not elaborate.


**********************************************************

U.S. Seeks Funding For Iraqi Neighbors
U.N. Proposal Would Overhaul Sanctions

By Colum Lynch
Special to The Washington Post
Tuesday, May 22, 2001; Page A14


UNITED NATIONS, May 21 -- The United States is proposing that wealthy
governments and global funding institutions, such as the World Bank, provide
financial assistance to Iraq's neighbors if they suffer reprisals for
helping rein in Baghdad's illicit trade in oil and weapons, according to a
confidential U.S. paper presented to key Security Council members.

The proposal is part of a broader U.S. campaign to enlist the support of
Iraq's neighbors in cutting off Iraqi black market activity. It includes an
initiative to win the Security Council's support for a plan to divert a
portion of Iraq's oil revenue to an insurance fund for Turkey, Jordan and
other neighbors.

Britain, with the support of the United States, presented Russia, France and
China this afternoon with a draft Security Council resolution that would
overhaul the 11-year-old international sanctions on Iraq. It is aimed at
loosening restrictions on ordinary consumer goods while tightening controls
on military items and cracking down on smuggling.

In Baghdad, Iraqi President Saddam Hussein immediately dismissed the
U.S.-British proposal. "We will reject the so-called 'smart sanctions' which
are more stupid than the [current] sanctions," Hussein said in his first
public remarks on the resolution.

The U.S.-British proposal does not depend on Iraqi cooperation. But support
from the five permanent members of the Security Council, which have veto
power over the resolution, is essential. In addition to the United States
and Britain, the permanent members are Russia, China and France.

Russia's U.N. ambassador, Gennady Gatilov, said today that Moscow would
prefer renewing the current "oil-for-food" program but was prepared to
consider proposals from Washington and London to ease the sanctions. The
oil-for-food program allows Iraq to export oil and use the proceeds -- under
U.N. scrutiny and control -- to buy food, medicine, other humanitarian
supplies and spare parts to keep its oil industry running.

U.S., British, French, Russian and Chinese experts are scheduled to begin
intensive negotiations Tuesday on the U.S.-British proposal. Diplomats
familiar with the discussions said they expected a battle over a list of
"dual use" items -- goods with both military and civilian applications --
that Iraq will be able to import only with Security Council approval.

In addition, Russia and France oppose a U.S. proposal to increase an
existing U.N. fund that is used to pay reparations to companies and
individuals whose property was damaged during Iraq's 1990 invasion of
Kuwait. Last year, the United States agreed to reduce the share of Iraqi oil
revenue that goes into the fund from 30 percent to 25 percent. Diplomats
said Washington now proposes to go back to 30 percent, in order to build up
funds that could compensate Iraq's neighbors for future losses.

Bush administration officials have said the new sanctions policy is heavily
dependent on the ability of the United States to convince Iraq's neighbors
that they will not suffer.

"One of the most difficult challenges is to provide contiguous states with
assurance that they will be helped in the event that Iraq retaliates against
them by cutting off trade," says the U.S. paper circulating at the U.N.
"Assurances to them may be necessary, including pledges of assistance
through international financial institutions and from other states."

The draft resolution asks U.N. Secretary General Kofi Annan to help
establish "specific arrangements" to govern Iraq's trade with its neighbors,
subject to Security Council approval. U.S. officials have suggested that
those arrangements might include border inspections aimed at stopping sales
of Iraqi oil that take place outside of U.N. control.

James B. Cunningham, the acting U.S. ambassador to the United Nations, said
he hoped that the 15-nation council would vote on the resolution before June
4, when the oil-for-food program is up for renewal.

"We want to lessen the impact of sanctions on the civilian population," he
said. "I think we will be in a position to move this week, I hope."



*********************************************************
Monday May 21 3:27 AM ET
UN Council Powers Discuss Easing Iraqi Sanctions
By Evelyn Leopold

UNITED NATIONS (Reuters) - Key members of the U.N. Security Council discuss
on Monday new British-U.S. proposals to liberalize sanctions against Iraq,
with Russia and China raising doubts a resolution could be adopted within
two weeks.

The afternoon meeting among ambassadors from the United States, Britain,
France, Russia and China, the council's permanent members with veto power,
is the first joint session on the new measures, although experts from the
five have spoken informally in various capitals.

The aim to get a vote in the 15-member council by May 31, before the next
six-month phase of the U.N.-Iraq humanitarian oil-for-food program begins on
June 4.

In an effort to counter critical world opinion of the decade-old sanctions,
Britain, working with American officials, last week announced proposals to
drop embargoes on all non-military imports to Iraq, from bicycles to
whiskey.

Military supplies will still be banned outright, and ''dual-use'' items will
require specific authorization from the council's sanctions committee. The
United Nations (news - web sites) would still control the bulk of Iraq's oil
revenue through an existing escrow account that handles payments for
imported goods.

But the proposals, designed to make the Baghdad government responsible for
hardships of ordinary Iraqis, will not include any tough monitoring of
borders, as the United States wants, because such plans have not gelled yet,
council sources said.

However, they said a British-drafted resolution, expected to emerge on
Tuesday, is expected to refer to ``closer cooperation'' with Iraq's
neighbors without giving specifics.

U.S. officials have stayed in the background in revealing details of the
draft resolution, with Britain doing most of the briefings, despite a U.S.
memo distributed last week outlining American policy ideas, some of which
will not be in the draft.

``DUAL-USE'' LIST WILL BE FOCUS OF DISPUTE

The British plan expands the so-called fast-track for civilian goods that
can go to Iraq without approval from the council's sanctions committee. At
the same time a list of items that can be used for military and civilian
purposes has been drafted by the United States and Britain.

Despite the seeming concessions to Iraq, Russia and China say there is too
little time to adopt a resolution by May 31 and to dissect and agree on the
list.

``I am very suspicious that this will not be possible,'' Russian diplomat
Gennady Gatilov told Reuters.

And Moscow's foreign minister, Igor Ivanov, at a news conference with
Secretary of State Colin Powell (news - web sites) in Washington on Friday
had few encouraging words. ``Our U.S. partners put forth their vision, their
approach to this issue. We have also our own proposals,'' he said.

Russia and China, along with France, have been advocating a suspension of
the sanctions, imposed when Iraq invaded Kuwaiti in August 1990.

To get the embargoes suspended or lifted, Iraq has to cooperate with U.N.
arms inspectors to make sure it no longer has programs for weapons of mass
destruction. Baghdad has refused to allow the inspectors to return since the
December 1998 bombing raids by the United States and Britain.

The new plan would not require Iraq to let arms inspections resume before
sanctions on consumer goods could be lifted.

Iraq has never liked the oil-for-food accord, which allows it to sell
unlimited amounts of oil, with proceeds put in a U.N. escrow account to pay
suppliers of goods Baghdad orders.

It believes any tinkering with the plan would only nail down sanctions for
years to come, especially if the five powers took a unified position, which
they have not done for years.

``Iraq's main goal is getting control of the oil revenue,'' said Raad
Alkadiri, analyst with Washington-based Petroleum Finance Co. said.

``This will look like a further institutionalization of sanctions rather
than a loosening of sanctions,'' he said.


***************************************************************************
Sunday May 20 3:28 PM ET

U.S., Allies Considering Iraq Sanctions 'Refocus'

WASHINGTON (Reuters) - The United States is consulting with its allies and
the U.N. Security Council on how to ``retarget or refocus'' sanctions
against Iraq imposed a decade ago, Vice President Dick Cheney said on
Sunday.

``We have had a process under way, consultation with our allies, with our
friends in the region, at the direction of the president, to see if we can't
retarget or refocus the sanctions,'' Cheney said.

But it had not yet been decided whether Iraq would have to allow U.N.
weapons inspectors to return in exchange for any loosening of U.N.
sanctions, he said on NBC's ``Meet The Press.''

Across-the-board U.N. sanctions have been seen as harmful to Iraqi civilians
``and that's not anybody's intent,'' he said.

The United States, however, wants to ensure that Iraqi President Saddam
Hussein does not use his wealth or oil proceeds for weapons of mass
destruction, Cheney said.

Iraq resumed oil exports in 1996 under a U.N. oil-for-food program which
gave Baghdad access to about two-thirds of the oil proceeds to buy
humanitarian supplies.

Keeping the oil revenues flowing through the U.N. escrow account was key to
maintaining sanctions while relieving the burden on Iraqi civilians, Cheney
said.

Pressed on whether a return of U.N. inspectors would be a firm condition of
easing sanctions, Cheney replied: ``We've continued to demand inspections,
but exactly what's going to come out of the consultations that are now under
way, I wouldn't want to predict.''

After the Gulf War, the United Nations sent the inspectors to Iraq to ensure
the destruction of Baghdad's programs to build ballistic missiles and
nuclear, chemical and biological weapons. Baghdad has not cooperated with
the inspectors since 1998.

A British proposal to end embargoes on all civilian imports to Baghdad, but
retain sanctions on military and ``dual-use'' goods that could be used for
weapons, was expected to be circulated next week to the 15-member U.N.
Security Council.




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