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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 (email@example.com) * Britain struggles over Iraq 'smart sanctions' plan, Daily Telegraph, 24 May (firstname.lastname@example.org) * Russia blocks smart sanctions against Iraq, Guardian, 24 May (email@example.com) * 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. -- ----------------------------------------------------------------------- This is a discussion list run by the Campaign Against Sanctions on Iraq For removal from list, email firstname.lastname@example.org Full details of CASI's various lists can be found on the CASI website: http://www.casi.org.uk