Volume 1 - Iraq Watch

for what they imported in 1992, probably was theroughly 20,000 bbl/d that Iraq shipped to Egyptthrough Jordan during the first half of 1992.• Jordanian officials also agreed to import nonpetroleumIraqi products in 2001, including sulfur, urea,and barley, but we do not know if these goods wereactually imported or what Iraq’s earnings were fromthem.We do not have complete Iraqi data for Iraq’s effectiveearnings from the Jordan Protocol during thesanctions period but estimate them at $4.4 billion(see Annex E, Illicit Earnings Sources and EstimationMethodology).• We judge Iraq’s earnings amounted to about $400million annually from 1991 through 1995 for a totalof $2 billion. This estimate includes trade approvedunder the Protocol averaging about $200 millionannually and Iraq’s debt to Jordan increasing by $1billion, which accounts for additional Iraqi importsaveraging another $200 million a year (see Figure10).• We used announced trade Protocol levels to estimateearnings in 1996 to 1998 amounting to $730million.• A combination of SOMO invoice and collectionsdata was used to estimate earnings from 1999 to2003 totaling $1.7 billion.• Iraq’s earnings under the Protocol primarily weredeposited in an Iraqi Ministry of Trade (MoT)account in the Central Bank of Jordan (CBJ) (seeFigure 10).Jordan deposited its credit payments for Iraqi oil, intoan account at the CBJ on behalf of the CBI. Fundswere then disbursed to suppliers by the CBJ by orderof the CBI.• In March 2003, prior to Operation Iraqi Freedom,Iraq had an estimated $444 million dollars in itstrade account in Jordan. With total deposits tothe trade account during the sanctions Regimeestimated at about $4.4 billion and $444 millionremaining at the end of the war, Iraq would havespent almost $4 billion on Jordanian origin goodsand reexports under the Protocol agreement.The Jordan Protocol is generally referred to (byJordanian and Iraqi officials) as a 100 percent creditaccount, with no cash being provided to Iraq. SOMOinformation and a senior MoT official, however,indicated a small portion of the trade was 60 percentcredit and 40 percent cash.• SOMO Documents list oil sales to the JordanianMinistry of Energy and Minerals on a 60-percentcredit, 40-percent cash basis. Contracts of this typeare listed only for 2002 and are valued at only $6.2million.• A high-level Iraqi Trade Ministry official stated thatJordan’s payments to Iraq for the cash portion ofthe trade Protocol was negotiated between the CBIand Jordan and provided specific written instructionsabout how to transfer the funds to Iraq. Wehave no further information on this aspect of theJordan-Iraq trade Protocol.• A MoO official stated his ministry had twoaccounts in Jordan funded by the Protocol. Thiscould refer, in part, to the 40-percent cash portionof the trade, although the accounts held almost $80million while this trade only earned $6.2 million.• According to SOMO’s database, the 60-percentearnings were deposited in the Jordan NationalBank. The 40-percent cash earnings were depositedin the Ahli Bank, where much of Iraq’s cash earningsfrom other Protocols were deposited. These,along with cash earnings from other sources, couldaccount for the funds in the Ministry’s accounts.• It is possible, maybe even likely, that Iraqi oil salesunder the 60/40 arrangement, sales to the Jordanianmilitary, and purchases that resulted in $1 billion indebt owed to Jordan are not technically part of thetrade Protocol. Nevertheless, given the governmentto government nature of these transactions, theywere accounted for here instead of as private-sectorexports.Syria Trade Protocol. Iraq’s trade Protocol withSyria was Iraq’s primary illicit income source from2000 until OIF in March 2003. With Syria facingincreased political pressure from the US, openingrelations with Iraq seemed attractive for both politicaland financial reasons. Negotiations began, and theProtocol was signed before Hafiz al-Assad died onRegime Financeand Procurement25