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Re: [casi] Lifting Sanctions Proposal vs. Kurds of Iraq

Dear List,

The article "Background: UNSCR 986 “Oil for Food”
program From the UN Liaison Office of the Kurdistan
Regional Government dated May 16, 2003, included the

>As General Tommy Franks remarked when in Baghdad, it
> was more of an “oil for palace” program.

I don't want to comment on the reliability of General
Franks or his integrity, nor his level of
intelligence.. It is enough he is a pal of G. Bush.
His record during the illegal attack on Iraq, and his
lies and denials are all known and need no
explanation. He is currently being accused of war
crimes in Belgium.

Nor do I want to comment on the conclusions reached by
the UN Liaison Office of the KRG which contradicts
conclusions reached by international organizations. I
leave that to the list members.

I am posting an article from Reuters which gives a
different view, from inside Iraq; a country Franks
knows very little about.. He just sneaked in and out
in a hurry.



Iraq Made $2 Billion a Year in Sanctions-Busting
Tue May 20, 2003 09:56 AM ET

By Peg Mackey

BAGHDAD (Reuters) - Saddam Hussein raked in $2 billion
a year in a sanctions-busting ploy that kept the
former Iraqi president in luxury and the dilapidated
oil sector alive, an Iraqi oil industry executive said

In the eyes of the United States, Iraq was smuggling
280,000 barrels per day (bpd) of crude oil to Syria
and Turkey illegally to fill Saddam's coffers and
purchase components for banned weapons of mass

But for many in Iraq, the former Oil Minister Amir
Muhammed Rasheed was conducting "barter trade" outside
United Nations supervision, helping to generate cash
to buy equipment for the country's cash-starved oil
network, the executive said.

"I considered it a patriotic duty to break the
embargo. It was Amir Rasheed's greatest achievement,"
the executive, who requested anonymity, told Reuters.
"Some of the money went to the presidential account to
build palaces and buy luxury cars for Saddam's
cronies. But the remainder was used for medicine,
spare parts and equipment."

Payment to Baghdad was made in cash and in kind. Goods
made up about 70 percent of the invoice, and the rest
was paid in hard cash, some $600 million a year.

"In local terms, that's a lot of money," he said.
Iraq sold most of its oil under U.N. control via the
oil-for-food program, but Baghdad managed to break out
of the sanctions straitjacket.

Its most daring bid to gain control over oil revenues
was made two years ago when it started to ship 180,000
bpd of oil to Damascus via the Iraq-Syria pipeline, an
arrangement which netted about $1 billion a year, the
executive said.

A pumping station on the pipeline was targeted by U.S.
bombers in the early days of the war to cut off the
flow to Syria.

The deals with Iraq's neighbors -- led by Rasheed and
carried out by the rank and file -- reaped benefits
for all. Syria and Turkey got cheap oil, while Iraq
got cash and goods while living under a stringent
economic embargo.

"Syria's economy started to boom thanks to Iraq," said
the executive. "Let us see what happens when Iraq's
economic motor has stopped."

Iraq sold its crude to Damascus and Ankara at a steep
discount versus the international market. The formula
was the declared price of oil at Turkey's Ceyhan
outlet for Iraqi crude, minus a hefty discount of $7 a
barrel, the source said.

Syria paid for half the oil in manufactured goods and
the remainder went into Iraqi bank accounts in Syria.
"Thanks to this trade we were getting most of the
contracts that were not approved by the U.N. sanctions
committee, vital spare parts for the refineries,
chemicals and spare parts," said the oil executive.

The Turkish deal was tighter in terms of the cash
component, which was only 30 percent, he said.
Some 80,000 bpd of crude and some quantities of fuel
oil netted Iraq close to $1 billion a year from
Turkey, he said.

Iraq was also exporting fuel oil out of the Gulf at
the cheap rate of about $50 a ton.

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