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PIN 62: Smart Sanctions: Rebuilding Consensus or Maintaining Conflict?

This is a short piece I've just contributed to MERIP on the smart sanctions.
I appreciate any comments or feedback.
Marc Lynch

Marc Lynch
Department of Political Science
Williams College
Williamstown, MA 01267
** ON LEAVE 2001-02 **
Oakley Center for the Humanities
Tel: 413-597-4572
Fax: 413-597-4126

MERIP Press Information Note 62

Smart Sanctions: Rebuilding Consensus or Maintaining Conflict?

Marc Lynch

June 28, 2001

(Marc Lynch teaches political science at Williams College.)

Heated debate in the UN Security Council on June 26 previewed the coming
showdown over the US-British "smart sanctions" initiative, designed to
"re-energize" the international consensus on sanctions against Iraq. Faced
with declining international support for and compliance with the current
sanctions, the United States and the United Kingdom are pushing a major
package of sanctions "reforms." The US-UK proposal would allow some civilian
goods into Iraq, while tightening embargoes on others and retaining the UN's
financial control over the Iraqi economy. Security Council Resolution 1352,
passed on June 1, requires a decision on sanctions reform by July 3. But it
now seems unlikely that this target will be met. Russian Foreign Minister
Igor Ivanov warned on June 25 that his country "cannot allow [this measure]
to pass." France and China are working to reshape the proposal rather than
rejecting it outright. Iraq, for its part, has emphatically denounced the
proposal from the start. Most of the frontline states which would be charged
with implementing the new sanctions regime -- particularly Jordan -- have
expressed strong opposition.

It is important to be clear about what is, and what is not, at stake. The
Security Council debate foreshadows the end of the current sanctions regime.
Should it succeed, "smart sanctions" would revitalize the sanctions on
Iraq -- against prevailing international opinion. The plan would rebuild a
narrow Security Council consensus, and blunt the force of rising opposition
to the sanctions. But the reform would emphatically not end the sanctions on
Iraq, and probably would not significantly improve the lives of Iraqi
civilians. Continued "dual-use" restrictions and the escrow account would
keep the Iraqi economy highly centralized and cash-poor. What is more, the
current emphasis on making the sanctions more efficient comes at the expense
of moves toward lifting the sanctions outright. Should "smart sanctions"
fail, the status quo -- a deeply unpopular formal sanctions regime which is
increasingly ignored -- will remain in place. But given US dissatisfaction
with the status quo, the failure of sanctions reform might well lead the US
to adopt a more aggressive and unilateral approach to the persistent problem
of Iraq.


"Smart sanctions" are not motivated by humanitarian concern. The US and UK
advanced the "smart sanctions" proposal because the existing sanctions are
unpopular and full of holes. After the Desert Fox bombings of December 1998,
the US and UK stood almost alone in support of sanctions. Media reports and
public debate increasingly focused on Iraq's humanitarian disaster rather
than on Iraqi non-compliance with weapons inspections. US and British
arguments placing blame for the humanitarian crisis solely on the Iraqi
regime's shoulders were clear losers in the international public sphere. On
the ground, the volume of oil smuggling has grown exponentially, as the
price of oil increased, sympathy for the Iraqi people mounted and the moral
stigma of violating UN sanctions eroded. Painstaking negotiations over
Resolution 1284 in December 1999 failed to achieve either Security Council
consensus (Russia, China and France abstained) or Iraqi compliance with the
new inspections agency UNMOVIC. The US and UK needed to shift the terms of
the debate if they hoped to keep the sanctions in place.

United against the status quo, the Bush administration divided internally
over what to do. Conservatives -- led by Defense Secretary Donald
Rumsfeld -- called for increased military pressure and support for the Iraqi
opposition. Even this proposal only temporarily appeased Republican hawks in
Congress. But two years of unpublicized, stepped-up bombing of Iraq around
the no-fly zones -- with little tangible gain and the specter of US
losses -- has worn down the morale of US forces. The Iraqi opposition in
exile remains in disarray. Iraq's neighbors, focused on the escalating
Israeli-Palestinian conflict, were unwilling to endorse such an aggressive
policy. Russian, Chinese and French opposition made it clear that there
would be no Security Council authorization forthcoming. "Smart sanctions"
emerged as a strategy to save the sanctions by addressing the major points
of international critics, while also fending off pressure from domestic
hawks. As Secretary of State Colin Powell remarked on March 8, "smart
sanctions are meant to rescue the sanctions, not to abandon them." Should
Powell's initiative fail, the hawks will be well-positioned to push their


The "smart sanctions" proposal would open up trade in civilian goods,
allowing such contracts to be approved directly by the UN Secretariat
instead of being reviewed by the controversial UN Sanctions Committee. Not
only anti-sanctions campaigners, but also UN Secretary-General Kofi Annan
and other UN officials, have sharply criticized the US and British "holds"
on contracts submitted to the Committee. As of May 31, $3.7 billion in
contracts were in limbo due to US or UK objections. But "smart sanctions"
retains a list of "dual-use" items -- items that could have military
applications -- that would still be reviewed by the Sanctions Committee,
allowing further US and UK "holds" or vetoes. The contents of this list have
been the object of intense and so far fruitless negotiations, with the US
defending an expansive definition of "dual-use." If the US definition is
adopted in a final resolution, then little will change besides the
transparency of the contract review process.

Re-establishing UN control over Iraqi finances by channeling all oil revenue
through the UN escrow account lies at the core of "smart sanctions." The US
and UK have been deeply troubled by the dramatic increase in the flow of
revenues into Iraqi government coffers from smuggling and a surtax on oil.
Because they fear that Iraq will use unmonitored revenues to rearm itself,
the US and UK insist on maintaining control over all Iraqi financial
transactions. "Smart sanctions" attempts to cut off these independent
revenue sources. The UK draft of June 20 offers "states sharing land
borders" the right to purchase 150,000 barrels of oil per day in exchange
for eliminating smuggling.

Powell's "smart sanctions" plan allows limited foreign investment in
services but not, as the French in particular want, in the oil sector. As
for the controversial compensation fund that skims 25 percent off the top of
Iraq's oil sales to pay reparations to Kuwait and others, the UK draft of
June 8 suggested pushing the percentage up to 30. The US-UK proposal makes
almost no reference to inspections, which had been a primary bone of
contention in the arduous 1284 negotiations. Where those talks revolved
around the "trigger" for the lifting of sanctions, the US and UK now seem
inclined to present "smart sanctions" as a more or less permanent system,
quietly removing the option of lifting (rather than suspending) the
sanctions from the table.


Iraq immediately rejected "smart sanctions," and halted oil sales on June 4
to protest Resolution 1352. The regime has every reason to expect the
continued de facto erosion of existing sanctions without its concessions on
weapons inspections. With smuggling revenue exploding, and borders
increasingly porous, the Iraqi regime -- if not the Iraqi people -- is doing
better economically. Despite US insistence on a policy which does not depend
upon Iraqi cooperation, the reality is that the UN's Office of the Iraq
Program, with its elaborate system of contracts and administration of the
Iraqi economy, can not operate without Iraqi oil sales. Iraqi Vice President
Taha Yasin Ramadan has warned that the adoption of "smart sanctions" would
be the end of the Oil for Food program. Iraq has denounced France in
scathing language for trying to achieve Security Council consensus, and
repeatedly threatened to punish any neighboring state which cooperates with
a new sanctions plan. The regime's furious response reflects its recognition
that -- however unlikely it is -- the rebuilding of Security Council
consensus could derail its strategy for escaping sanctions.

Within the Security Council, strong support for alleviating the humanitarian
crisis in Iraq mingles with hesitations about the "smart sanctions" reforms.
Russia has taken the lead in opposing the proposal. After forcing the
postponement of the decision until July 3, on June 25 Russia leaked a letter
stating that it would not support the proposed resolution. In an open
Security Council debate that it called for June 26, Russia complained that
"smart sanctions" would perpetuate the sanctions rather than move towards
lifting them through the disarmament process. France has attempted to
minimize the extent of international control over the Iraqi economy, pushing
for a restrictive definition of "dual-use" items, a minimal UN bureaucratic
presence in the administration of the Iraqi economy and permission for
investment in the Iraqi oil sector. The French want to further loosen trade
restrictions for Iraq's neighbors, and further cut the percentage of revenue
channeled to the compensation fund. Their approach, which holds out the
potential for creating a new consensus among the Western powers, has come
under the most ferocious attack from the Iraqi regime. China has been more
vocal than during previous deliberations over Iraq, probably reflecting the
deteriorating US-Chinese relationship.

Most of the frontline states which would carry the burden of enforcing the
new sanctions regime have outspokenly opposed it. Only Turkey has offered
conditional support. Jordan has taken an unusually direct position of
opposition to "smart sanctions." While Iraqi threats of retaliation played
some role, the Jordanian position more reflects the overwhelming Arab public
consensus against the sanctions and the enormous economic stakes. Arab
League Secretary-General Amr Moussa reflected widespread Arab opinion by
attacking the proposal as simply repackaging the sanctions rather than
addressing the real problems.

With considerable justification, the anti-sanctions movement has criticized
"smart sanctions" as an attempt to salvage a morally bankrupt policy. The
Bush administration's alternative plans may be worse. The US will block
Russia's counter-proposal to simply lift sanctions. Failure in the Security
Council may well push the US to a more unilateral approach, including the
revival of escalated military options, while keeping the existing sanctions
in place.

(When quoting from this PIN, please cite MERIP Press Information Note 62,
"Smart Sanctions: Rebuilding Consensus or Maintaining Conflict?" by Marc
Lynch, June 28, 2001.)


For background on US-UK bombing in the no-fly zones, see MERIP Press
Information Note 49: No-Fly Zones: Rhetoric and Real Intentions:

For background on the Iraqi opposition, see MERIP Press Information Note 51:
Assessing the Iraqi Opposition:

Also see the Foreign Policy in Focus Policy Brief accessible online at:

The summer 2000 issue of Middle East Report (MER 215) focused entirely on
the impact of sanctions on Iraq. Phyllis Bennis's critique of US policy,
"And They Called It Peace," is accessible online at:

To order individual copies of Middle East Report or to subscribe, please
call Blackwell Publishers at 1-800-835-6770.


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