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This article was originally published in CASI's July 2002 Newsletter (View full contents)
Iraq sanctions reform
US Secretary of State Colin Powell’s first major policy initiative involved Iraq. Identifying three ‘baskets’ of Iraq policy - the sanctions, the no-fly zones, and Iraqi opposition politics, he explained, "My immediate concern was basket one, the UN basket and how it was falling apart. And it seemed to me the first thing we had to do was to change the nature of the debate. We were being accused and we were taking on the burden of hurting Iraqi people, hurting Iraqi children, and we needed to turn that around" [Budget Hearing Before the Senate Foreign Relations Committee, 8 March 2001].
Round I: Initial discussion at the Security Council
The results of Powell’s concern appeared in May 2001. With US support, the UK submitted a draft resolution to the Security Council to begin the tenth phase of the ‘oil for food’ programme. The timing left under a month for obviously difficult negotiations.
The draft proposed a number of changes to the sanctions, two of which were at its heart. First, it would have engaged Iraq’s neighbours to stop Iraqi smuggling, thus tightening the sanctions. A form of this had been considered by the UK-Dutch draft resolution in 1999 that went on to form the basis of Security Council Resolution (SCR) 1284. That resolution sought to stop Iraqi smuggling with Turkey but did not mention any form of compensation for Turkey’s lose of trade with Iraq. The Turkish government, preferring its trade with Iraq not to be managed by the UN, successfully sought the removal of these clauses. The 2001 proposal seemed to learn from this: it was suggested that Iraqi neighbours losing smuggling revenue would be compensated, probably from Iraqi oil revenues held in the UN escrow account.
The second main change was that the UN Sanctions Committee would play a reduced role in processing contracts for export to Iraq. A list of items with potential ‘dual use’ would be drawn up; this has since become known as the Goods Review List (GRL). All goods not on that list could be imported by Iraq without the approval of the Sanctions Committee, under procedures similar to the ‘fast track’ procedures in place since March 2000 for a variety of civilian goods: items on these lists only require that the Secretary-General be notified to import them; the Sanctions Committee need make no decision. As Evelyn Leopold of Reuters put it at the time, "Under the new plan, other supplies from bicycles to sewing machines can be imported without the committee’s consent" [‘UN Envoys Query Quick Adoption of New Iraqi Plans’, 17 May 2001]. Those goods on the GRL would continue to require Sanctions Committee approval.
The proposals immediately ran into trouble. First, Iraq’s neighbours did not want the Security Council to enforce stricter border controls with Iraq. Indeed, an NGO had unveiled sanctions proposals very similar to the US/UK proposal, but a month earlier. The main criticism that these faced was that the border controls were unworkable.
Second, the Iraqi government strongly opposed the reforms. The border controls, which would have reduced the income available to it outside ‘oil for food’, were seen as a threat. It is also likely that the government opposed any attempts by the Security Council to regain control of the sanctions. As it may feel that the US will maintain the sanctions as long as the current regime is in power, it may feel that its best chance for progress is to make the UN process irrelevant. Attempts to regain control over the sanctions are a direct threat to this agenda.
As it became clear that the draft would not be accepted before Phase IX of ‘oil for food’ ended, the US argued for a one month, rather than the usual six month, extension; this would keep the pressure on the negotiations. Russia originally opposed this, but acquiesced when the US released $700 million worth of contracts that it had placed on hold, many of them Russian. Towards the end of the extra month, the US again released holds on a large number of contracts. This time, $80 million worth of Chinese contracts were allowed to proceed. The Washington Post explained that the "package included a $28 million Iraqi contract to buy mobile telephone equipment from Huawei Technologies Co., a Chinese firm previously accused by the Pentagon of violating the sanctions by providing fiber-optic cable for Iraq to upgrade its antiaircraft missile batteries" [‘Trade Deal Won Chinese Support of U.S. Policy on Iraq’, 6 July 2001].
Even this, however, failed to gain Security Council approval for the reforms. All the reforms, including non-contentious ones, were therefore shelved and a simple rollover resolution was adopted. The problem would be dealt with again in November.
Round II: Phase XI rollover resolution
In November, in the wake of 11 September, the Security Council again found itself without enough time to properly discuss the sanctions. On 29 November, it therefore passed what appeared to be a straightforward rollover resolution, SCR 1382, extending ‘oil for food’, but with a small twist. Its second paragraph noted
the proposed Goods Review List […] and the procedures for its application […] and decide[d] that it will adopt the List and the procedures, subject to any refinements to them agreed by the Council in light of further consultations, for implementation beginning on 30 May 2002;
This paragraph was immediately interpreted in two very different ways. One UN statement reported that "the Council also approved a proposed Goods Review List […] open for implementation on 30 May 2002" [SC/7229, 29 November 2001, italics added]. Another UN press release that same day reported that "the Council also took note of a proposed Goods Review List, which is under consideration with a view to speeding up the delivery of humanitarian assistance to Iraq" [‘Iraq: Security Council approves 180-day extension of ‘oil-for-food’ programme’, UN News Centre, italics added].
Thus, it was unclear whether the Council had actually agreed to the proposed reforms, which would then take effect on 30 May, or whether it had merely agreed to agree on them by 30 May. This seemed to set a new standard in intentional ambiguity.
Round III: US-Russian negotiations
Negotiations in 2002 centred on a series of bilateral meetings between US and Russian officials. According to one diplomat, the official Russian explanation for the length of these negotiations is that the inter-agency process in Moscow is a cumbersome one. Responding to this, the US went to Moscow to speak directly to the inter-agency officials. When the Russians reciprocated by visiting Washington, they brought company officials with them to speak to US technical experts.
At the end of March, after the third such bilateral meeting, agreement seemed to have been reached on the contents of the GRL. Yuri Fedotov of the Russian Foreign Ministry explained to reporters that the agreement with the US "has the effect of freeing $740 million in Russian contracts to supply goods to Iraq" [‘Deal Revises Iraq Penalties’, New York Times, 28 March 2002]. His US counterpart, John Wolf, stressed that "the freezing was apolitical and necessary to prevent any military exports" [‘U.S., Russia Discuss Iraq Sanctions’, Associated Press, 29 March 2002]. Diplomatic sources for the Financial Times were not convinced, with one claiming "the decision marked the boldest move yet by the US to use the holds to buy political agreement" [‘Block on Russia’s Iraq contracts lifted’, 3 April 2002].
With US-Russian agreement on the GRL, negotiations then centred on the procedures for their use.
Security Council Resolution 1409
On 14 May, two weeks ahead of the deadline, after some last minute stalling by Syria, the Security Council approved resolution 1409, implementing the revised GRL and cementing the policy of ‘smart sanctions’. There was no mention of border controls. The Bush administration called it "a step forward for the Iraqi people", and the New York Times agreed. Its 18 May editorial said: "Washington is now in a better position to lead the international debate on the future of the Iraqi regime without the distraction of accusations over humanitarian concerns." Powell’s desire to change the nature of the debate seemed to have succeeded.
Yet although the US and Britain’s interest in reform was motivated at least in part by a desire to escape blame for humanitarian suffering in Iraq, the modifications to sanctions in the resolution did not emerge from an analysis of Iraq’s humanitarian needs. In this respect, they stand in contrast to the UK-Dutch proposal that formed the basis of SCR 1284; this incorporated a number of suggestions made in a Security Council panel report in March 1999, including removal of the cap on Iraqi oil sales. The Security Council did form a team, in the summer of 2000, to investigate Iraq’s humanitarian situation and report back by November 2000; this deadline has passed without any action from the team or the Council. The absence of an assessment here must reflect a lack of political interest in one.
The reforms may have some positive direct effects on the operation of sanctions, although these are likely to be largely in the form of increased efficiency in the processing of import contracts through the ‘oil for food’ programme. Individual items in a contract are now able to be put on hold without delaying the remaining items, and suppliers are now able to indicate on contract forms whether they have submitted applications for the same goods in the past.
The reduced involvement of the UN Sanctions Committee in the processing of import contracts is also likely to reduce the opportunity for politically motivated holds. Checking whether items are on the GRL will now be the responsibility of Unmovic (Unscom’s replacement) and the International Atomic Energy Agency, with the Sanctions Committee only reviewing those applications the weapons experts find to contain items on the GRL. Previously, the Sanctions Committee had implemented the ‘dual use’ lists maintained by the weapons experts. Whether this shift in responsibility from members of the Security Council to UN weapons experts translates into humanitarian benefits, however, depends on the extent to which the weapons experts maintain their independence if and when Committee members disagree with their decisions. The most that can be said at this stage is that the change represents a potential depoliticisation of holds.
The GRL itself is lengthy – about twice as long at 480 pages as the previous ‘dual use’ lists, the ‘1051 lists’. While the only current version in circulation is an unofficial one, it is comprised of a combination of three lists: the Wassenaar Arrangement (the world’s main ‘dual use’ control arrangement), the existing Unmovic ‘dual use’ list, and a shorter list of various items omitted from the other two. There is yet to be any expert commentary in the public domain on the stringency of its contents. Meanwhile, concerns have been raised that the increased number and sophistication of ‘oil for food’ contracts since the cap on oil exports was removed in December 1999, and the reduced reliability of end-use monitoring since the end of weapons inspections in December 1998, may mean that the Sanctions Committee will be more likely to reject contracts passed to it for review. If this proves to be the case, it would solidify one of the problems currently experienced with holds, whereby delaying a single item can scupper an entire project. Some UN diplomats have even referred to the GRL as the ‘Goods Rejection List’.
Overall, then, the humanitarian consequences of the resolution are unlikely to be large. For a long time, civilian goods have been freely smuggled across Iraq’s borders with no interference from the sanctions. Thus, easing the UN’s requirements eases only a marginal constraint on Iraq’s economy. This said, large infrastructural items are harder to smuggle than are consumer goods (Leopold’s "bicycles to sewing machines"), so the reforms may apply to things that haven’t been able to enter by smuggling.
What is most notable about 1409 is how little it changes. Central to the sanctions’ negative effects are the constraints that they impose on Iraqi income. Iraq’s civilian infrastructure and public sector are run down, and require massive investment to restore them to proper functioning. As Iraq is oil wealthy, the natural solution would be to allow Iraq to borrow out of future income to fund these investments. The reforms do not allow this. A French proposal introduced last year would have allowed foreign investment; its fifth paragraph read:
Decides to allow civilian investments in Iraq by foreign companies, including into the Iraqi oil industry and production capabilities, subject to appropriate arrangements to be approved by the Council… [11 June 2001 draft]
The other major drain on Iraqi income is Gulf War reparations. By 9 April, $14.8 billion had been paid, just $5 billion less than the value of goods that have reached Iraq under ‘oil for food’. This comparison is particularly disturbing when it is noted that the outstanding claimants are governments, firms and well-off individuals. A further indication of the interaction between Iraqi income and the US/UK reforms is that, if the GRL led to the removal of all holds on Iraqi import contracts, Iraq could not afford to purchase the items.
As the public discussion of the sanctions has concentrated on Iraq’s ability to import food and medicines, it is poorly prepared to understand these issues of income. The US/UK reforms are therefore likely to have the negative effect of convincing their citizens that the sanctions are no longer harmful, reducing the pressure for reforms that will lead to real improvement. This certainly seems to be the hope of US and British politicians. After SCR 1382’s passage, British Foreign Secretary Jack Straw continued the long tradition of announcing that the latest reforms meant that the sanctions no longer had negative humanitarian consequences:
The UN decision will soon mean no sanctions on ordinary imports into Iraq, only controls on military and weapons-related goods. Iraq will be free to meet all its civilian needs. The measures leave the Baghdad regime with no excuses for the suffering of the Iraqi people [30 November 2001].
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