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As predicted in our March newsletter the US has begun to release large volumes of 'holds.' In what is sure to be an effective propaganda move, the US will now gain credit for simply scaling down the extent to which it obstructs the humanitarian programme! Here's a few other news items from yesterday and today. Best wishes, Gabriel voices uk * U.S. To Allow Sale of Goods to Iraq, 1st June * Security Council Agrees on Iraq Sanctions, Washington Post, 1st June * U.S. Releases $800 Million Worth of Iraqi Contracts, Reuters, 1st June * Iraq Says Suspending Oil Sales in Protest Against UN, Reuters, 2nd June * Rumsfeld to Look at Zone Operations, AP, 1st June * 5 Powers Delay Vote on Easing Iraq Trade, New York Times, 1st June ********************************************** Friday June 1 6:08 PM ET U.S. To Allow Sale of Goods to Iraq By BARRY SCHWEID, AP Diplomatic Writer WASHINGTON (AP) - The Bush administration removed curbs Friday on the sale of $800 million in goods to Iraq, following through on its abandonment of an 11-year campaign. The so-called dual use items had been on hold out of concern they might help Iraq's weapons programs. Now the items can be sold to Iraq for the benefit of the Iraqi people. Oil-drilling machines, water pumps, welding equipment, steel-reinforced aluminum conductors, earth-moving equipment and heating and cooling systems for housing construction are among the dual-use items that have been held back for more than a decade and now can be sold to Iraq. Unless withheld goods have a ``clear application'' to military programs, they will be available for sale to Iraq in what a senior U.S. official said was a show of good faith to other nations on the U.N. Security Council. The United Nations extended for 30 days its oil-for-food program Friday in a humanitarian move that stops short of a joint effort by the United States and Britain simultaneously to tighten curbs on arms and weapons technology while permitting free flow of civilian goods. Proceeds from oil sales are to be used strictly for consumer purposes. It was a compromise that followed hard lobbying by all sides. Here to report to Secretary of State Colin Powell, U.N. Secretary-General Kofi Annan said he hoped the Security Council would come up with a plan soon. ``The council is working as a team,'' Annan told reporters. State Department spokesman Richard Boucher said, ``There is a lot of detail work that needs to be done, but the direction is set clearly by this (oil-for-food) resolution that was passed this morning.'' As a result, Boucher said, ``A broader range of civilian goods will be approved, and restrictions will focus more tightly on items that the Iraqi regime might find necessary to develop its military capabilities.'' Reviewing contracts that had been placed on hold, Boucher said $800 million worth would be released, on top of almost $400 million worth already approved. The senior official, who spoke on condition of anonymity, said the United States has been applying U.N. sanctions against Iraq far more strictly than any other nation. In some cases, he said, 10 times as many items were on U.S. hold than on any other country's list. Powell, who spearheaded the policy change within the administration, congratulated American diplomats in New York and at the State Department for shaping a resolution. Whether the road ahead will be all that smooth remains unclear. Historically, only Britain stood with the United States on tough sanctions. Russia, China and France, all of whom can kill by veto any council resolution, took a softer line. The U.S. policy shift took four months to crystallize as Powell vied with the Pentagon and other sectors of the administration over items with potential application to Iraq's military. The debate continued within the administration even as it did in the halls of the United Nations. Powell is inclined to take a lenient view of such items as water pumps and refrigerated trucks, which theoretically could be used for military purposes but are much more likely to lessen the pain of everyday Iraqis. ``This is a good move,'' said Lee Feinstein, former deputy director of policy planning at the State Department. ``The idea is to keep our eye on the ball, which is to deny the most sensitive items to Iraq and keep controls on the way oil proceeds are used.'' A list is being compiled of items that will remain off-limits to Iraq, their value and their use. At the same time, American diplomats resisted efforts by other governments to go further in the direction of leniency. The U.N. sanctions on weapons and consumer goods were imposed as part of a U.S.-led drive to reverse Iraq's annexation of Kuwait in 1990. Powell was chairman of the Joint Chiefs of Staff during the Persian Gulf War, which liberated Kuwait but left President Saddam Hussein in power. - ************************************************** Security Council Agrees on Iraq Sanctions By Alan Sipress and Steven Mufson Washington Post Staff Writers Friday, June 1, 2001; Page A22 The U.N. Security Council reached agreement yesterday on the broad outlines of a new set of sanctions on Iraq while giving itself another month to build a so-far elusive consensus on the technical details. The council is scheduled to give final approval today to a resolution that would extend the current oil-for-food program, due to expire June 4, through early July so members can hash out their differences over a U.S.-British proposal to overhaul the Iraq sanctions. Under that proposal, the United Nations would ease restrictions on most of Iraq's civilian imports while continuing to screen goods that could be used by President Saddam Hussein's military, in particular weapons of mass destruction. Though the resolution marks a formal acknowledgment that the 15-member Security Council will not close a deal before the June 4 deadline, as the Bush administration had hoped, it also represents progress toward building a consensus among the five permanent members with veto power -- Russia, China, France, Britain and the United States. The resolution was introduced by Russia, which until this week had refused to participate in negotiations over a new sanctions program and insisted until two days ago on a standard, six-month renewal of the current sanctions. "It's really quite an achievement. It's a basic agreement on the new framework," a U.S. official said. What remains lacking, however, is an agreement over the list of items that will continue to be restricted. The United States has sought to add a range of "dual use" goods, which have both civilian and military applications, to existing lists of banned items that have previously been accepted by the international community. France has balked at what it sees as an overly restrictive list, while Russia had demanded more time for its experts to conduct a highly technical review. China had also objected. "We need to do a lot of hard work still to fill in the details, and that is what we will do over the next 30 days," said U.S. ambassador to the U.N. James B. Cunningham. An agreement over the outlines of a new program was obtained by Secretary of State Colin L. Powell in talks this week with his British, French and Russian counterparts in Budapest, where they were attending a meeting of NATO foreign ministers, according to senior State Department officials. By agreeing to a relatively short, 30-day extension, U.S. and European officials said they would maintain momentum toward a radical restructuring of the sanctions, which were imposed on Iraq after its 1990 invasion of Kuwait. The resolution also embodies the existing Security Council requirement that Iraq cannot be entirely free of sanctions until it is cleared by U.N. weapons inspectors. France, Russia and China had abstained when this requirement last came up for a vote in 1999, but all five permanent members indicated yesterday that they would support the new resolution. The measure faces opposition from Iraq, which threatened yesterday not to sign any more contracts for the sale of its oil if the resolution is adopted. Iraq's U.N. ambassador, Mohammed Aldouri, however, said his country would "honor all contracts" already signed. Baghdad also has warned neighboring countries of retaliation if they complied with new U.N. controls. *********************************************** Friday June 1 1:44 PM ET U.S. Releases $800 Million Worth of Iraqi Contracts WASHINGTON (Reuters) - The United States announced on Friday it was releasing more than $800 million worth of contracts under the United Nations' oil-for-food program for Iraq that it had previously blocked. State Department spokesman Richard Boucher said the United States had decided to unblock these contracts in a bid to help the Iraqi people. ``The release of these contracts will provide civilian goods for civilians in Iraq. It assists the Iraqi public in their endeavors without assisting the Iraqi regime in developing weapons,'' Boucher said. The total represents only a portion of the $3.5 billion in holds Washington has placed on contracts under the program over the course of many months and in some cases, years. Boucher said he anticipated more contracts would be released in the future, indicating an overhaul in the decade-old sanctions regime against Iraq imposed after Baghdad invaded Kuwait in 1990. ************************************************************* Iraq Says Suspending Oil Sales in Protest Against UN June 2nd 2001 Filed at 11:57 a.m. ET BAGHDAD (Reuters) - Iraq said on Saturday it would halt oil exports from Monday in protest against a United Nations Security Council resolution extending the U.N.'s oil-for-food program for 30 days instead of the usual six months. ``Iraq will halt exports of crude oil from ports on the Arab Gulf and the Mediterranean as of 8:00 a.m. local time (midnight EDT) until further notice,'' the official Iraqi news Agencyquoted a source at the Oil Ministry official as saying. ``Iraq will stop oil exports under the memorandum of understanding because the Council has violated the spirit and the texts of the memorandum,'' the ministry said. Energy officials in Turkey, one of the two export outlets allowed under oil-for-food, said Iraq had stopped pumping crude via pipeline to the southern Turkish port of Ceyhan. ``The oil flow was suspended from this morning,'' said one Turkish official. Iraq is angry that the Security Council voted on Friday to extend the oil-for-food program for a stop gap period of one month while it considers a proposal by Britain and the United States to revamp decade-old sanctions against Baghdad. The 30 day-period is intended to give council members time to continue negotiations on the U.S.-British plan that would lift restrictions on civilian goods imported by Iraq but tighten controls on military-related supplies and smuggling. Sanctions have been in place since Iraq's invasion of Kuwait in 1990 and oil-for-food has provided limited relief for civilians since the program began in December 1996. Iraq is worried that a crackdown on oil smuggled through neighboring countries Turkey, Jordan and Syria will stem cash generated direct to the government of President Saddam Hussein. SAUDI SAYS OPEC WILL FILL ANY GAP Saudi Arabia, the world's biggest exporter, pledged it would step in with fellow OPEC members to fill any oil shortage that could be created by the Iraqi decision. ``What concerns us is the stability of the market. This is not the kingdom's position, but OPEC's position, which is to fill any shortage in the oil market,'' Saudi Oil Minister Ali al-Naimi told reporters in Riyadh. But it remains unclear whether Naimi and other OPEC oil ministers, who meet in Vienna next week for scheduled talks on production quotas, will move immediately to compensate for the Iraqi stoppage. OPEC has been widely expected to maintain current supplies to keep prices in its $22-$28 a barrel target range for a basket of its crudes. The group cut output by 2.5 million barrels daily earlier this year. The OPEC basket was valued at $26.56 on Thursday and ministers may prefer to wait for prices to rise above $28 before triggering extra output. Iraq is an OPEC member but has no production quota. Ministers will be wary about increasing supply too quickly because Baghdad has suspended oil sales in the past and resumed exports within days or weeks. Iraq exports 2.1 million barrels a day (bpd) of oil, five percent of world exports, under the U.N. program which is due for renewal on June 3. Oil export revenues are controlled through a U.N. escrow account. U.S. IS IRAQ'S BIGGEST CUSTOMER The United States is Iraq's biggest customer, buying about a 750,000 bpd, with exports also flowing to Asia, Europe and Latin America. Turkey's Ceyhan terminal has 2.5 million barrels in tanks, a Turkish official said. That's little more than enough for two days worth of normal exports from the port.Iraq controls sales from the other export point at the Gulf port Mina al-Bakr. Baghdad has almost 300 million barrels of oil, equivalent to about 150 days at current export rates, in outstanding contracts under the U.N. program. ******************************************************** Friday June 1 4:38 PM ET Rumsfeld to Look at Zone Operations By ROBERT BURNS, AP Military Writer WASHINGTON (AP) - Defense Secretary Donald H. Rumsfeld will open a weeklong European trip Monday in Turkey, where he will get an up-close look at the U.S.-British effort to enforce a ``no-fly'' zone over northern Iraq. The Bush administration is reviewing all aspects of U.S. policy toward Iraq, including the no-fly zone enforcement that began shortly after the Gulf War ended in 1991. U.S. military commanders have suggested cutting back on air patrols, which often are targeted by Iraqi air defense guns and missiles. After a stop at Incirlik Air Base in southern Turkey to get a briefing on the northern no-fly zone and talk with U.S. air crews, Rumsfeld will travel to Kiev, Ukraine, and then visit U.S. troops in Macedonia and Kosovo. He also plans to stop in Greece, for a meeting of southeast European defense ministers; Brussels, for a series of NATO meetings; and Turku, Finland, for talks with defense ministers from Nordic and Baltic nations. It will be Rumsfeld's first extended trip abroad since taking office in January. He spent one day in Germany in February to attend a European security conference but has put off other travel in order to get senior Pentagon posts filled and focus on a plan to modernize the military. Rumsfeld held several meetings this week with the chiefs of the military services, and will meet Saturday with leaders of warfighting commands - including U.S. European Command, which is responsible for the no-fly zone over northern Iraq, and U.S. Central Command, which handles the southern no-fly zone. The meetings are meant to establish the areas of focus for a broad review of U.S. military forces, as required by Congress every four years. At the same time Rumsfeld is working out a proposed Pentagon budget for 2003 as well as proposed additions to the 2002 budget of $310 billion. On Friday the White House asked Congress to add $5.6 billion to the current 2001 defense budget of $296 billion. In his letter to Congress, President Bush said the request ``is primarily for defense activities related to pay, support, training and quality of life for military personnel, as well as regular operations costs.'' ``It is imperative to reverse the pattern of underfunding these costs,'' Bush said. ********************************************************** June 1, 2001 5 Powers Delay Vote on Easing Iraq Trade By BARBARA CROSSETTE UNITED NATIONS, May 31 — The five major powers on the Security Council agreed today to postpone for 30 days a vote on a more generous trade policy for Iraq. The extension is intended to give experts time to evaluate a detailed list of items that the United States wants to prevent Saddam Hussein's government from buying unless it obtains international approval. A meeting on Wednesday in Budapest among Secretary of State Colin L. Powell and his counterparts from Britain, France and Russia appears to have resulted in a compromise to extend the existing "oil for food" program for Iraq for a much shorter period than Russia had been seeking. Britain and the United States wanted no extension, but aimed for a vote this week on a new plan that would lift restrictions on the sale of civilian goods to Iraq while trying to tighten controls on oil smuggling and military purchases. The full Council may vote on Friday on temporararily extending the current program, which faces a renewal deadline of midnight Sunday. Iraq immediately threatened again to cut off oil production if the extension is adopted. The program is usually renewed every six months. "Iraq will not deal with it," Ambassador Mohammed Aldouri told reporters today as the Council met on the extension. "Consequently Iraq will not conclude any oil contract based on it, and this resolution will be for us just another dead resolution." Diplomats and some United Nations officials say the Iraqi threat, if carried out, may not disrupt the oil market as much as Mr. Hussein may expect. This year, Iraq withheld oil from the market, and prices dropped, a diplomat said. A temporary extension of the "oil for food" program under which Iraq may sell unlimited quantities of oil to buy a wide range of goods, will give a divided Security Council some time for negotiations. Still, diplomats expect sharp debate over the American list of goods that Washington wants to monitor so that Iraq cannot reconstruct weapons by diverting material or equipment that also has civilian uses. The Russians and French have questioned some items. Secretary Powell acknowledged to reporters on the plane returning to Washington from Budapest that "the difficulty, of course, is in the details," adding that the list of items was "excruciatingly detailed." -- ----------------------------------------------------------------------- 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