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"Mark.Galloway" <Mark.Galloway@seamec.net wrote: > There were pluses and minuses for the suppliers. > For example, sugar prices can move quite quickly. Mark, your comments are most interesting. But you seem to speak from a "supplier's" perspective, which is fair enough I suppose. In fact, you wrote about this on February 28, 2001 (Re: Cash component - comment.) Back then, you longed to "open the country" [Iraq] and looked forward to "see some glorious capitalist tendencies in the near future (Ibid). This of course is a sentiment you share with Mr. Bush et al. Nationalized industry is even bad for the mind, you felt: "the average Iraqi has been brought up without any possibility of thinking for himself or taking responsibility in a way which the average Westerner assumes is normal." (Ibid) Hmm... The great "Western" mind is highly over-rated, I believe. Just consider the impossible things these average western minds believe before breakfast - in the most sheep-like fashion. Besides, such prejudice might prevent one from considering the situation fairly. In any case, the purpose of my post was concern with the denials of the sanctions' effects. I was not concerned with the suppliers' fortune in this catastrophic situation. > Any sanctions regime is likely to produce abuse. > Witness South Africa, Rhodesia and others. It is > just one of the reasons for seeking their removal. Comparing the sanctions against South Africa or Rhodesia to the total embargo against Iraq seems an extraordinary leap. Peter Haines, I believe was fond of making the South Africa vs Iraq comparison. Even Colin Rowat once implied that the two could be compared. On November 29 1999 he wrote: "The suffering caused by sanctions in South Africa does not seem to have been on the same level as that in Iraq." (Re: Fwd: dsanet: Iraq and UN Sanctions) Quite an understatement, that! By comparison, here is a statement made as early as 1991 (before the 'Gulf war') by Zbigniew Brzesinski - who can't be accused of being a 'bleeding heart': Thus spoke Brzesinski: "Sanctions, un-precedented in their international solidarity and more massive in scope than any ever adopted in peacetime against any nation - I repeat - ever adopted against any nation, are inflicting painful costs on the Iraqi economy". [137 Congressional Record, Proceeding and Debates of the 102d Congress, First Session (No. 6, 1991) at S162 > Iraqi sanctions effectively created a whole industry > devoted to their manipulation and control. No one would deny that. And it would hold true if the same sanctions had been inflicted on the UK, say. In fact, the Bossuyt Report of June 21, 2000 points out that this invariably happens: "Under sanctions, the middle class is eliminated, the poor get poorer, and the rich get richer as they take control of smuggling and the black market." http://www.globalpolicy.org/security/sanction/unreports/bossuyt.htm But you seem to suggest that these "black market" conditions existed also within the OFF regime. And I still find this a bit difficult to fathom, given the bureaucratic nightmare that it was. > Suppliers and insurers also lost from claims for > shortage of cargo. It is astonishing how many > hundreds of thousands of bags of rice and sugar > allegedly went missing between the port of shipment > and Umm Qasr. Those of us who dealt with Iraq before > 1980 can recall that this was a major problem at > Basrah before the closure of the Shatt el Arab. Again, you seem to be speaking from a (UK) supplier's perspective. And by "allegedly went missing" you seem to imply dishonesty on part of the 'average' Iraqi - as opposed to the 'average' honest Westener. I don't believe one can stereotype human beings like that. I live in an English-speaking country where only 28 percent is of British Isles stock. The rest if French and les autres. And in my experience, honesty doesn't depend on ethnicity - nor does independent thinking. But more to the point, you drag in a time "before 1980". This can't have anything to do with OFF. The UN hired an inspection firm, Cotecna, to verify the cargo upon arrival. So there couldn't have been "many hundreds of thousands of bags" of anything been declared missing. I can see that I must write to Cotecna to ask if they didn't do their job. > Since the OFF scheme managers did not choose to > question the invoice value of goods shipped, as did > the US and UK governments in respect of the oil prices > which were easier to monitor, unscrupulous suppliers > were no doubt able to provide inflated invoices. Where is the evidence that "OFF scheme managers" (OIP?) didn't "choose to question..."? Were they in cahoots? That "unscrupulous suppliers were no doubt able to provide inflated invoices" is an assumption, I take it. > However, the process of OFF scheme purchase could > take so long before the cargo was actually loaded on > board ship that the supplier took the risk of serious > loss if the market price moved against him. Compared to the total devastation and traumatization of a whole society, the supplier's risk of monetary loss must surely be trivial - to my mind at least. Besides, one can hardly blame the GOI for these delays. > The suppliers were unable to perform the actual > delivery since the regime controlled the land transport. Another supplier grievance. It was my understanding that Cotecna controlled all entries points. And this has been confirmed by people (not suppliers) entering Iraq by land. > However, the Iraqis generally refused to accept > anything which they did not consider to be 100% sound, > and this led to many complaints from suppliers that > the Iraqis rejected cargo unreasonably.... On occasion, > rejections were blatantly political. The Australian > government suffered badly from this. And yet another - unconfirmed - supplier grievance. But my concern is still with the suffering of the Iraqi people - inflicted by the sanctions regime, the massive bombing, and now by the illegal occupation. Sorry, I have no feelings left for the financial losses - perceived or real - of the Australian government or any other supplier. And despite all this interesting, if unsubstantiated, information, I still can't see how it validates the claims made in the Reuter article. Perhaps I am missing something. What worries me most are the attempts by USUK, the media, and the public to sweep the effects of the genocidal sanctions regime under the carpet. To me, this is adding insult to the injuries inflicted on the Iraqi people Best regards, Elga Sutter -------------Original Message------------- [casi] OFF and the cash syphon From: "Mark.Galloway" <Mark.Galloway@seamec.net> Subject: [casi] OFF and the cash syphon Date: Thu, 29 May 2003 09:53:06 +0100 Greetings, The OFF scheme provided cash to the regime in a number of ways. As the scheme developed in the late 1990s, trade was increasingly conducted by quotas awarded to countries such as Egypt and Russia, or by contracts awarded to friends. Thus for example, an Egyptian company had contracts for supply of large quantities of steel which could not be sourced from Egypt. They bought elsewhere, typically Russia or Ukraine, but issued a complete new set of documents for the cargo showing its origin as loaded at Suez. The unknown middlemen who appeared as purchasers of Iraqi oil also gained contracts for supply of goods to Iraq. Since the OFF scheme managers did not choose to question the invoice value of goods shipped, as did the US and UK governments in respect of the oil prices which were easier to monitor, unscrupulous suppliers were no doubt able to provide inflated invoices. When the supplier was paid by OFF, kickbacks were payable to the regime. The extent of this is not certain, but it is not difficult to compare prices paid to OFF suppliers against typical prices available in the commercial world. There were pluses and minuses for the suppliers. For example, sugar prices can move quite quickly. However, the process of OFF scheme purchase could take so long before the cargo was actually loaded on board ship that the supplier took the risk of serious loss if the market price moved against him. In the hard commercial world, this is just tough. However, from my enquiry, I understood that the regime was prepared to allow traders to escape obligation to deliver. The delays might also explain occasional high pricing. For example, if it took 6-9 months from the date of contract to the date of delivery, the market price could drop for a particular commodity, giving a supplier a large potential profit. However, such fluctuations and delays do not explain consistent high pricing. The "land transport" cost is another major unknown. The regime asked its suppliers to quote a price inclusive of delivery to "All Iraqi Governorates." The suppliers were unable to perform the actual delivery since the regime controlled the land transport. Therefore, the regime dictated the cost of the land transport to the supplier, who included this in his invoice to OFF. Prior to discharge of the cargo at Umm Qasr, the supplier was required to pay the land transport cost to an Iraqi controlled company in Jordan. The basic principle was not unreasonable. Iraq had to purchase and maintain an enormous fleet of trucks and provide the warehousing for distribution. There were never enough trucks. Given the idea of the "cash component" in the OFF scheme, it was reasonable for Iraq to ask that they recover from OFF the cost of land transport and distribution. However, there was no control of the land transport payments, and I doubt it is easy now to establish how much Iraq was able to cream from this system or how the cash which it produced was channelled. There were other ways of making money from oil sales. Sale prices vary according to destination. Thus the purchaser might declare a low price destination in his purchase, but actually send the ship to a destination where a much higher price could be obtained. There were also accusations that ships loaded additional oil after Cotecna had completed their load quantity check and issued documentation. The UN caught some of these problems. The complaints about quality and specification and lack of recourse against suppliers require a mixed response. It is true that there were plenty of instances of shipment of sub-standard or off-specification material. However, the Iraqis generally refused to accept anything which they did not consider to be 100% sound, and this led to many complaints from suppliers that the Iraqis rejected cargo unreasonably. On many occasions, rejected cargoes were taken back to the port of shipment or discharged at UAE ports, leaving many of us scratching our heads to know why they had been rejected. On occasion, rejections were blatantly political. The Australian government suffered badly from this. In normal trade, problems of specification are invariably dealt with by inspection and certification at the loadport. The Iraqi government apparently refused to trust any inspection system at loading. It is wrong to state that the Iraqis had no recourse. Normal trade letters of credit put the consignee in exactly the same position as the Iraqi government. If there is a dispute in respect of specification, the consignee claims against the supplier in accordance with the terms of the sale contract. Nothing prevented the Iraqi government from so doing. Suppliers and insurers also lost from claims for shortage of cargo. It is astonishing how many hundreds of thousands of bags of rice and sugar allegedly went missing between the port of shipment and Umm Qasr. Those of us who dealt with Iraq before 1980 can recall that this was a major problem at Basrah before the closure of the Shatt el Arab. Any sanctions regime is likely to produce abuse. Witness South Africa, Rhodesia and others. It is just one of the reasons for seeking their removal. Iraqi sanctions effectively created a whole industry devoted to their manipulation and control. Mark Galloway _______________________________________________ Sent via the discussion list of the Campaign Against Sanctions on Iraq. To unsubscribe, visit http://lists.casi.org.uk/mailman/listinfo/casi-discuss To contact the list manager, email firstname.lastname@example.org All postings are archived on CASI's website: http://www.casi.org.uk