Volume 1 - Iraq Watch

necessary to accommodate the large amount ofincoming faxes. The IIS personnel deciphered allfaxes, according to a former IIS officer.MFA’s UN Sanctions Counter-StrategyThe MFA formulated and implemented a strategyaimed at ending the UN sanctions and breachingits subsequent UN OFF program by diplomatic andeconomic means. Iraq pursued its related goals ofending UN sanctions and the UN OFF programby enlisting the help of three permanent UNSCmembers: Russia, France and China. Iraq believedit managed to varying degrees of success to influencethese permanent UNSC members from strictlyenforcing previously agreed UN resolutions and frominitiating additional resolutions that further debilitatedthe Iraqi economy. By offering permanent andnon-permanent Security Council members economic“carrots and sticks,” Iraq belived it managed to partiallyinfluence voting at the UNSC. Iraq’s economic“carrots” included offering companies from thosecountries lucrative oil, reconstruction, agricultural andcommercial goods, and weapon systems contracts. Incontrast, the Iraqi “sticks” included not only redirectingthose contracts to other more “pro-Iraqi” companies,but held the threat of forfeiture of foreign debts– totaling between approximately $116-250 billion.Saddam expressed confidence that France and Russiawould support Iraq’s efforts to further erode the UNsanctions Regime.• According to one source, using “semi-diplomaticcover,” the IIS attempted to recruit agents from theUN headquarters in New York to provide informationor influence public opinion and their nationalpolicy toward Iraq.• Besides attempting to co-opt certain permanentUNSC members, under cover of MFA sponsoredinternational conferences, Iraq tried to recruit sympatheticeastern European politicians by publiclylauding their pro-Iraqi sentiments and support in theUN.Iraqi-Russian Relations. Saddam’s Regime neededboth Moscow’s political clout in the UN and its economicexpertise and resources to sustain his Regimefrom the 1990s until OIF Numerous trips takenby then Iraqi Deputy Prime Minister Tariq Aziz toMoscow served as a good indicator of the Russians’opinion of Iraq’s dependence on Russia.Smart SanctionsIn early July 2001, the US and the UK withdrew theirjoint-proposal to revamp the UN existing sanctionsRegime, called “Smart Sanctions,” because of Russian,Chinese, and French opposition. The US/UKproposal attempted to restructure two key elementsof the existing sanctions Regime: illicit procurementof weapons and dual-use goods and illicit generationof revenue from Iraqi oil sales outside the UN’sOFF program. In contrast, the Russian draft resolutionproposed to reduce the current percentage to theCompensation fund another 5 percent to 20 percentof total value of Iraqi oil exports – and increase thetotal amount in Iraq’s escrow account to $600 millionto pay other expenses in accordance with UNSCR1175(1998) and 1284 (1999) (see Annex H: UNSCRApplicable to Iraq). The UN estimated that each 5percent reduction in payments to the United NationsCompensation Commission (UNCC) added about$275 million in Iraq’s coffers per each UN OFF sixmonthphase.• According to news reports, in July 2001, TariqAziz expressed gratitude to Russia for its efforts topass UNSCR 1360 which continued the UN’s OFFprogram for a tenth phase. Moreover, Iraq promisedto economically reward Russia’s support by placingit at the head of the list for receiving UN contractsunder the UN OFF program.Iraqi-Chinese Relations. ISG judges throughoutthe 1990s, the PRC consistently advocated liftingIraqi sanctions while privately advising Baghdadto strengthen cooperation with the UN. In October2000, Baghdad continued to seek Chinese support forthe removal of UN imposed economic sanctions. ByNovember 2000, Chinese Vice Premiere Qian Qichenstated that China would support Iraq’s efforts to endthe sanctions, and work for an early resolution to theIraqi issue according to press reporting.• According to diplomatic reporting, Chinese PremierZhu Rongji and Vice Premier Qian Qichen met withIraqi Deputy Prime Minister Tariq Aziz on 27-28January 2002. Softening Beijing’s earlier stancefor ending sanctions, Premier Zhu Rongji reportedlytold Aziz that China was willing to continueits efforts toward an early solution to the Iraqi issueand that it had been advocating that the sanctionsissue be settled at an early date. China also hopedRegime Financeand Procurement55