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This gem of a quote, made by an anonymous US official, can be found in the FT piece below (Note that this official also makes the bizarre claim that the new resolution will facilitate the 'easy flow of goods ... out of Iraq': all of which will remain banned except oil-for-food oil exports). Meanwhile the current edition of The Economist (26th May - 1st June) has a Special Report on 'America, Iraq and Iran': 'Can sanctions be smarter?' Here are a couple of key excerpts: "Financial control of Iraq would remain firmly in UN control: all the money from oil sales would go to the UN escrow account to stop Mr Hussein spending it on wepaons. This means that although the country would be able to import more, it would still be denied the free movement of labour and capital taht it desperately needs if it is as last to start picking itself up ... Iraq needs massive investment to rebuild its industry, its power grids and its schools, and needs cash in hand to pay its engineers, doctors and teachers. None of this looks likely to happen under smart sanctions." "American diplomats have quietly proposed a range of possible rewards, in exchange for which Iraq's neighbours would place all their oil imports under the UN umbrella. The suggestions include creating an 'insurance' fund to compensate for Iraq's threatened end to oil supplies. "Any country that deals with the new American plan will lose its trade dealings with Iraq," says Tariq Aziz, Iraq's deputy prime minister, and he may not be bluffing. The fund might be financed partly by raiding Iraq's escrow account (if that is not illegal), partly from contributions from 'friendly' governments and multilateral institutions. Kuwait, for instance, has said that it would 'rush to the aid' of Arab countries hit by an Iraqi oil cut-off, and the United States backed the IMF's recent bail-out of Turkey." Cheers, Gabriel voices uk ************************************************* Below I've posted an analysis from the FT: * Struggling with sanctions, FT, 28 May ... some wire reports: * US, Russia to Huddle at NATO on Iraqi Sanctions, AP, 29 May * List Targets Export Controls to Iraq, Associated Press, May 25 * UN Envoys Race Against Clock on Iraq Sanctions, Reuters, May 25 ... and a couple of editorials: * Struggling on Iraq, Washington Post, May 27 * Smarter sanctions;The present embargo against Iraq is not working, The Times, 25th May ************************************************** COMMENT & ANALYSIS: Struggling with sanctions: US proposals to target Saddam Hussein's regime more effectively have divided the UN security council and, even if approved, will be difficult to enforce, writes Roula Khalaf. Financial Times; May 28, 2001 By ROULA KHALAF Saddam Hussein is enjoying his rehabilitation. He plays host to Arab visitors all too eager to display opposition to the decade-old United Nations sanctions and sign trade deals. His regime is awash with cash accumulated from a vast network of smuggling. The Bush administration, however, appears determined to spoil Mr Saddam's party. Last week it introduced its so-called smart sanctions to the UN security council through a UK-sponsored draft resolution. Designed to improve the flow of civilian goods to Iraq and tighten controls over the regime, the US proposals aim to deprive Mr Saddam of the sanctions propaganda tool he has exploited, and to curb smuggling, now worth about Dollars 2bn a year. But in attempting to reverse Mr Saddam's gains, the US faces an uphill battle. The plan is running into trouble at the security council, where Russia, a long-time friend of Iraq and a permanent member with veto power, has circulated a counter-proposal aimed at obstructing the UK- sponsored resolution and delaying for six months the vote the US is seeking in early June. China too has shown resistance and France, though amenable to the US ideas, has proposed additional amendments, including allowing foreign investment into Iraq. Most important, the policy's success rests on co-operation from Iraq's neighbours - a requirement that appears far from guaranteed. The US proposals are making the Iraqi leader nervous. He has warned his neighbours that their share of cheap, often smuggled, Iraqi oil will dry up if they co-operate with the US. World oil markets have been put on notice that Iraq's oil supply might be shut down next month if the UN resolution is passed. "From Baghdad's perspective, the US ideas are like sanctions in perpetuity," says Raad al-Kadiri, country analyst at The Petroleum Finance Company in Washington. "They would ensure that the pressure Baghdad has put for lifting sanctions is undermined and they suggest that as long as the regime is in place, the embargo will not be lifted." The smarter sanctions are the first part of a broader US effort to toughen policy towards Iraq. In an administration staffed with officials who led the Gulf war, the other two legs of the policy are even more difficult to implement - a more vigorous attempt at regime change and a potentially stronger military response to Iraqi provocation. These elements are still under review. The sanctions amendments proposed by the US have the merit of allowing quick access into Iraq of virtually all civilian goods. This would enhance the efficiency of the oil-for-food programme, under which Baghdad since 1996 has been able to sell oil to buy humanitarian products. The scheme has been undermined by Iraqi obstruction and the US and UK practice of withholding goods on the grounds that they could be used to produce weapons. But the impact of smart sanctions should not be exaggerated. According to the International Institute for Strategic Studies in London, as much as 85 per cent of civilian goods is allowed into Iraq under the current oil-for-food scheme. In addition, the US plan will not revive Iraq's devastated economy while control over Iraq's oil revenues remains in the hands of the UN, and foreign investment and credits are still prohibited. Sanctions would only be fully suspended when Iraq allows UN weapons inspectors back in and wins a certification that it is free of weapons of mass destruction. "In reality, this is a change in perceptions," says a US official. "Most people think Iraqis are starving because the evil west is keeping medicines away. There will be a more easy flow of goods in and out of Iraq but, more important, we're taking the tool of sanctions as propaganda away from Saddam." US officials are hoping that the proposals, if approved by the security council, will improve Washington's damaged image in the Arab world. Arab perceptions of the US, however, are not easily changed, especially in times of conflict between Palestinians and Israelis. Since last September's outbreak of the Palestinian uprising against Israeli occupation, anti-US sentiment in the Middle East has been running high, driven primarily by the US's strong ties to Israel. At the same time, the Middle East conflict has provided Mr Saddam with a new propaganda tool. By invading Kuwait in 1990, the Iraqi leader dealt Palestinians a severe blow. He divided Arab ranks for more than a decade and weakened their resolve in confronting Israel. Today, however, he is portraying himself as the defender of Palestinian rights. While Arab states have been slow to dispatch funds to the Palestinians, Mr Saddam has been sending Dollars 10,000 to every Palestinian family that loses a relative in the uprising. So far, Arab commentators have been sceptical of US intentions, with some dismissing smart sanctions as a typical US ploy. Ragheda Dergham, an expert on UN relations with Iraq, recently wrote in Al-Hayat, the pan-Arab daily, that the US plan "falls somewhere between avoiding a solution and maintaining the status quo". The battle to win Iraq's neighbours, she added, "promises to be a tough one". A central element in the UK-US draft resolution is that oil smuggled through neighbouring states should be brought under UN control. Borders of frontline states also would be more vigorously monitored. But UN border inspections have been attempted under the oil-for-food programme with little success. Meanwhile, promises of co-operation from Jordan and Turkey must be taken cautiously. Both allies of the US, they have also been keen to avoid a showdown with Baghdad. Smuggling through Iran and Syria will be even more difficult to contain. The US has reached out to Tehran for help through UK intermediaries. But Iran itself is under US sanctions and its willingness to help the US is doubtful. Syria, whose newly opened pipeline to Iraq is now believed to be the most active route for illegal trade, appears to be linking co-operation with the US plan to Washington's policy on the Middle East peace process - more specifically to US willingness to put pressure on Israel. Bashar al-Assad, Syrian president, told Colin Powell, US secretary of state, this year that the pipeline would be brought under UN supervision. Curiously, however, Syrian officials since then have suggested that their leader may have been referring to a different pipeline. "The worse things go with the Palestinians and the peace process, the harder it is to get tough with Iraq," says a western diplomat. "Now, we have the worst of all possible worlds." The US smart sanctions may be an imperfect tool but there is no perfect way of containing Mr Saddam. The policy is unlikely to persuade Iraq to take back UN weapons inspectors. And the new USIraq stand-off runs the risk of raising tensions in an already troubled region and provoking a disruption in oil supplies. Broader US attitudes towards Iraq may hinge on the success of the amended sanctions. US policy analysts suspect a power struggle over Iraq between the State department, which is backing the smart sanctions, and the Pentagon, which is placing more emphasis on military tactics and regime change. These policies carry higher risk and meet with deep scepticism in the Arab world. "The State department is saying we have one idea, smart sanctions, let's get on with it and then we'll see about the rest - the hidden agenda is that they'll create facts on the ground and set the tone of US policy," says a former US official. "This would allow them to relegate other things the Pentagon wants to second stage." For that to happen the Bush administration's foreign policy team will have first to convince the UN security council to enact smart sanctions, then step up its marketing campaign for the new policy in the Middle East. Neither task will prove easy. *********************************************** Tuesday May 29 1:55 AM ET US, Russia to Huddle at NATO on Iraqi Sanctions By Evelyn Leopold UNITED NATIONS (Reuters) - Secretary of State Colin Powell and British Foreign Minister Robin Cook seek to convince Russia on Tuesday to break the deadlock on their new Iraqi sanctions proposals when they meet at a NATO session in Budapest, diplomats said. Russia, represented by its Foreign Minister, Igor Ivanov, has the strongest objections to a draft resolution Britain circulated to the 15 U.N. Security Council members last week. France, whose Foreign Minister, Hubert Vedrine, will be in Budapest, appears to support the resolution in principle. But his envoys are stressing unity among the council's key members, an indication they would want to put off a vote if Russia continues to balk at the draft. The U.S.-British measures ease sanctions on civilian goods to Iraq but expand a list of military-related supplies. Ivanov, whose country is not a NATO member, is scheduled to be in Budapest on Tuesday for a meeting of the NATO-Russia permanent joint council. China, the fifth permanent U.N. Security Council member with veto power, will not be represented at the NATO meeting. Ambassadors from the five council powers met late on Monday at U.N. headquarters but apparently made no progress. France has submitted a series of amendments, some of which the United States and Britain have accepted; whether a vote can be held soon is uncertain. The United States and Britain want to get the resolution adopted by May 31, before the current phase of the U.N. humanitarian ``oil-for-food'' program expires on June 3. That program, which regulates oil sales from and goods going to Baghdad, was meant to ease the impact of sanctions, imposed when Iraq invaded Kuwait in August 1990. The oil-for-food plan requires proceeds from Iraqi oil sales to be put in a U.N. escrow fund out of which suppliers for goods imported to Iraq are paid. The U.S.-British resolution would keep the fund intact, thereby denying Baghdad free use of its monies. Iraqi officials, who oppose any resolution that perpetuates the sanctions, have threatened to cut off oil supplies if the measures are approved. But the more controversial parts of the draft resolution are put off until Secretary-General Kofi Annan makes recommendations, after which the council will review them. They include regulating trade among Iraq and its neighbors, monitoring Iraq's land and sea borders against smuggling and weeding out the list of oil traders to eliminate shadowy firms, which are alleged to be paying Baghdad a surcharge on oil sales outside of the U.N. system. Also at issue is a list the United States and Britain distributed, giving its roster of banned goods that include high performance computers, certain types of software, high frequency radio relay communications and other items. The 23-page list, obtained by Reuters last week, is in addition to a previous list of armaments that have been banned outright. The U.S.-British resolution also wants to add the ''Wassenaar Arrangements'' list on munitions and ``dual-use'' items, which have military and civilian applications. These would have to be reviewed individually by the council. The Wassenaar accord, named after a town in the Netherlands, suggests lists of export controls for conventional arms, dual-use goods and technologies. China has not participated in the Wassenaar pact and its envoy, Shen Guofang, has protested that his country needs time to study it. Russia, too, has said more time was needed to analyze all the lists. (Matthew Robinson contributed to this report) ********************************************** Friday May 25 3:42 PM ET List Targets Export Controls to Iraq By DAFNA LINZER, Associated Press Writer UNITED NATIONS (AP) - It took a special, high-powered computer to create the mammoth wave and the ships it swallowed up in the movie ``The Perfect Storm.'' That same system can also design missiles and target weapons. Even if there were a Hollywood studio in Iraq, the computer would still be on a list of items the United States wants to keep away from Saddam Hussein, along with dozens of other consumer goods with possible military applications, including underwater cameras and night vision goggles. The list, drafted by Washington and obtained by The Associated Press, is a controversial element of a joint U.S.-British proposal to overhaul sanctions on Iraq. The proposal before the U.N. Security Council would lift restrictions on most civilian goods but alert U.N. monitors to attempts to bring in weapons technologies. The United States and Britain say the plan would ease life for Iraq's impoverished citizens while preventing the oil-rich nation from rearming 11 years after it stormed into Kuwait and fired missiles at Israel and Saudi Arabia. The 23-page list includes hundreds of items, and is only one of four itemized breakdowns of red-flagged goods. An American involved in the drafting process, who spoke on condition of anonymity, said the lists were designed to prevent Iraq from getting weapons of mass destruction, missile delivery systems and the technologies to build them. American officials say they are still being worked on, but drafts circulated to council members have already become a source of contention. Some argue the lists are too long, too complex or too difficult to enforce. Explaining items on the list, military experts said that underwater cameras could be used to track U.S. ships in the Persian Gulf. Image enhancers could be used to refine satellite photos. Fiber optic cables, also on the list, are hard to disrupt or intercept. Sophisticated drilling equipment could open the ground up just wide enough to insert a missile. Digital computers that work at 6.5 million theoretical operations per second are also on the list. Ellen Pasternack at George Lucas Digital said the company used the same computers to produce images in the movies ``The Perfect Storm,'' ``The Mummy Returns'' and ``Pearl Harbor.'' The company used other listed items in the production, including certain graphics and high-resolution capabilities. ``We've had preliminary conversations with the U.S. Navy about doing on-screen graphics for them,'' she added. One British diplomat, who also spoke on condition of anonymity, said cellphones and keyless entry systems would be allowed into Iraq even though they contain surface acoustic wave devices - an item placed on the list because it also can be used to interpret intercepted radar signals. Although the joint proposal would allow civilian flights to Iraq to resume, the review list includes all airplane parts. If any commercial plane required repairs in Iraq, a request for the items would have to be submitted for review, and if approved, then flown to Baghdad. U.S. and British officials say they hope to work out those kinds of details once the resolution is approved. An American involved in the process said there would be ``rules of reason'' applied to the review procedure when those types of items are requested for import. Critics note Iraq could simply import the products and then extract components that have military use. Others argue it would at least make it harder for Iraq to get the components to make banned weapons. ``Lots of items have military applications,'' said Larry Korb, director of the New York-based Council on Foreign Relations. He said ``the point is to make it harder'' for Iraq to get them. David Albright, a former U.N. weapons inspector who heads the Washington-based Institute for Science and International Security, thinks the United States and Britain are making a serious miscalculation. ``Export controls are meant to go hand-in-hand with inspections, and if you have only one of these things, you're going to have a hard time succeeding.'' U.N. weapons inspectors left Iraq in December 1998 ahead of U.S. and British airstrikes. Iraq has banned their return. Albright said he was disappointed that the proposal does not link the easing of sanctions with renewed ground checks. ``We should hang tough on where we are now and pressure the Iraqis to accept inspections,'' he said. Under the current U.N. oil-for-food program, Iraq is allowed to export oil provided the revenue is used to buy approved humanitarian goods. The U.S.-British draft resolution would enable most civilian goods to enter Iraq freely. But it would toughen enforcement of an arms embargo and tighten control over Iraq's oil revenues. A counterproposal by Russia, a key Iraq supporter, does not mention lifting sanctions on civilian goods or tightening border inspections to prevent illegal weapons and goods from entering Iraq. It would extend the oil-for-food program for another six months and add some elements favorable to Baghdad. ************************************* Friday May 25 3:04 PM ET UN Envoys Race Against Clock on Iraq Sanctions By Evelyn Leopold UNITED NATIONS (Reuters) - Racing against a self-imposed deadline, Britain and the United States on Friday sought agreement among key U.N. Security Council members for their new Iraqi policy but Russia and China balked. ``In our view, it is not to ease the humanitarian situation in Iraq, it is to further and consolidate the sanctions, `` Chinese representative Shen Guofang said. He spoke after a meeting with ambassadors from the other four permanent council members with veto power -- the United States, Britain, France, Russia -- on a draft resolution that seeks to lift controls on civilian goods and keep them on military-related supplies. The United States' aim is to get the resolution adopted by May 31, before the current phase of the U.N. humanitarian ''oil-for-food'' program expires on June 3. That program, which regulates oil sales and goods going to Baghdad, was meant to ease the impact of sanctions, imposed when Iraq invaded Kuwait in August 1990. The five Security Council powers have been divided on Iraqi policy for years and Russia and China appear headed toward opposition of the resolution, either a veto or an abstention. Key is France, which stands in the middle and has a more conciliatory position. But in December 1999, France at the last minute abstained with Russia and China on a key Iraq resolution, after which Baghdad rejected and ignored it. Who votes how, however, in the end will be decided by top officials. ``The final calculation will be one for politicians to make,'' one Western envoy said. Russia's ambassador Sergei Lavrov, after Friday's meeting said again: ``We don't get enough information from the sponsors for us to understand what this is about.'' Diplomats from Britain and the United States vehemently deny this and say Russia was observing ``with folded hands'' rather than negotiating on the resolution's text. COUNCIL UNITY Iraq rejects any resolution which perpetuates the sanctions and has threatened to cut off oil to the world if the measure is adopted. French envoys said they were pushing for council unity. But a British official said, ``We'd like to have council unity if we can. But we're not going to bend over backwards to get it if Russia's conditions are those set by Iraq.'' The current oil-for-food plan requires proceeds from Iraqi oil sales to be put in a U.N. escrow fund out of which suppliers for goods imported to Iraq are paid. The U.S.-British resolution would keep the fund intact, thereby denying Baghdad free use of its monies. But the more controversial parts of the draft resolution are put off until Secretary-General Kofi Annan makes recommendations, after which the council will review them. They include regulating trade among Iraq and its neighbors, monitoring Iraq's land and sea borders against smuggling and weeding out the list of oil traders to eliminate shadowy firms, who are alleged to be paying Baghdad a surcharge on oil sales outside of the U.N. system. Also at issue is a list the United States and Britain distributed to the other 15 members of the council giving its roster of banned goods that include high performance computers, certain types of software, high frequency radio relay communications and other items, in addition to those drawn up previously, according to the document obtained by Reuters. China's Shen said English was not his country's mother tongue and Beijing needed a lot of time to study the list. (Matthew Robinson contributed to this report) ******************************************** Struggling on Iraq Washington Post Sunday, May 27, 2001; Page B06 THE BUSH administration is gearing up for a major effort this week to push its new scheme of "smart sanctions" on Iraq through the U.N. Security Council. To all appearances, this will be a difficult diplomatic feat: Opposition to the new sanctions plan from Russia, not to mention from Iraq itself, has been stiff. But more worrisome is the possibility that a victory in a council vote will prove hollow. Even if it is approved, the new sanctions system may prove impossible to effectively implement. And even if it worked, the United States still would be lacking a serious strategy for dealing with Saddam Hussein. The sanctions plan was one of the first major foreign policy initiatives of the Bush administration, championed by Secretary of State Colin Powell during his first foreign trip, a tour of the Middle East. The idea was to replace the current U.N. sanctions regime, which is collapsing, with one that would allow Iraq more trade in consumer goods while tightening control over its exports of oil and imports of arms and other strategic materials. In particular, the administration hopes to establish U.N. control over the oil Iraq now ships, mostly illegally, to neighbors Syria, Jordan and Turkey, and deprive Saddam Hussein of the up to $3 billion a year he now earns outside the U.N.-controlled escrow fund for Iraqi oil revenue. Despite the high-profile start, the sanctions initiative seems to have gotten shoved down the list of administration priorities. The Security Council resolution was first unveiled by Britain and is being pushed by a U.S. mission that still lacks a permanent ambassador. Its prospects of passage by June 4, the date on which the U.N. sanctions regime must be renewed, appear highly uncertain; Russia, which has introduced a competing resolution, has been seeking to postpone the issue by rolling over the existing sanctions regime for another six months. Even if the new sanctions are approved, U.N. officials worry that they may prove impossible to administer. Iraq has threatened to cut off trade with countries that accept the system, meaning that Jordan, Turkey and Syria would have to be compensated for potentially huge losses. Baghdad might also respond by halting all of its legal oil exports, which could disturb world markets. Even if the new regime got off the ground, its effectiveness would depend heavily on how, or whether, border officials and customs inspectors in Iraq's neighbors enforced it. U.N. officials believe it might be necessary to deploy a substantial force of international monitors, a step that would require still more tricky diplomatic bargaining. At best, the sanctions initiative might succeed in maintaining controls on Iraqi trade that now are in danger of collapsing altogether. But it would do nothing to finish the job of destroying Iraq's weapons of mass destruction -- which was the original aim of the sanctions -- or to stop the continuing reconstruction of Iraq's air defenses, missile factories and possibly other armaments programs. By shoring up the Iraqi consumer economy, it would bolster rather than weaken Saddam Hussein's government. The Bush administration has promised repeatedly that sanctions are to be but one element of a revitalized Iraq policy that will also include steps to support opposition to Saddam Hussein and adjustments in the allied air patrols over the north and south of the country. But nothing has been done so far; the administration seems to be having trouble developing a credible plan for undermining Saddam Hussein or even establishing an internal consensus on its strategy. Before the election, President Bush rightly assailed the Clinton administration for quietly abandoning the struggle against Saddam Hussein. The risk is growing that his own administration will, in effect, do the same. **************************************** Smarter sanctions;The present embargo against Iraq is not working;Leading Article >From THE TIMES, May 25th, 2001 One difficulty of talk about "smart" sanctions against Iraq is that the phrase, when translated into Arabic, suggests that the present sanctions are "stupid". This is the message that Baghdad has long been putting out. Iraq exported $16 billion worth of oil in 2000, much of it bypassing the United Nations controls and flowing directly to Jordan, Turkey and through the newly reopened pipeline to Syria. The regime has all the money it needs to reward loyalists. President Saddam Hussein has enriched himself mightily while withholding enough necessities from his subjects to give credence to his propaganda that Western sanctions are killing Iraqi babies. The ban on civil air links has all but collapsed and Western patrols over the no-fly zones may soon end. The embargoes now in place look far from intelligent. Britain has been trying to lift the ceiling on oil exports, leaving Saddam no excuse to deprive Iraqis. Its proposals ran into the opposition both of America and of Kuwait, which still feels threatened and has yet to be told by Iraq the fate of its 600 missing captives. Both countries have now changed their minds, the Bush Administration because existing sanctions are unenforceable. But Iraq does not want them lifted; at a recent Arab summit it attacked the new proposals, now supported by Kuwait, as an attempt to divide Iraqis from their Government. The reason is simple. Sanctions have given Saddam unrivalled opportunities to tighten his grip. Iraqis lose their rations if they step out of line. The isolation of Iraq means that a younger generation has no experience of the outside world, believing the official line that the West is to blame for their hardships. Saddam wins over hearts across the Arab world by comparing the harsh treatment of his country with the West's refusal to back its rebukes to Israel with sanctions. Lifting all trade restrictions while toughening and focusing an international embargo on weapons and materials of military application is at least "smarter" than the present regime that is due to be renewed on June 4. But even this attempt to maintain some control over Baghdad has flaws. The first is that Iraq says it will not sell any oil through a scheme that maintains the UN escrow account; such a denial would hugely upset the international market and Baghdad can blackmail neighbours dependent on its exports into not going along with any new proposals. The second is that Iraq now exports enough oil directly to ignore the UN. And the third is that the British proposals have, predictably, split the Security Council, with Russia and China arguing that they have not had enough notice of the military embargo list, while France proposes new compromises. The UN may argue for six months over Britain's proposals -time for Saddam to destroy the last vestiges of the present system. -- ----------------------------------------------------------------------- This is a discussion list run by the Campaign Against Sanctions on Iraq For removal from list, email email@example.com Full details of CASI's various lists can be found on the CASI website: http://www.casi.org.uk