Volume 1 - Iraq Watch

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Regime Financeand ProcurementFigure 49. Machinery purchased by the MIC for theIAEC after 2001.Figure 50. The MoA used the following process to fi llrequirements for goods and services.87
Iraqi front companies with a number of subsidiariesoperating in Baghdad, Iraq, Dubai in the UAE,and Amman, Jordan. Al-Eman companies havebeen observed for the last 10 years as they procureddual-use and military goods for the Iraqi Government,and were heavily involved in the UN OFF kickbackscheme. Al-Gaaod used his relationships withSaddam and ‘Uday Saddam Husayn al-Tikriti, andHusayn Kamil to both acquire contracts for supplyingthe various ministries with sanctioned materials,smuggling oil, and he used those relationships tointimidate others.• Al-Eman is essentially a family-run business, withstrong family ties linking most of the subsidiaryfirms.• The accountants in Al-Eman are key figures withthe best overall knowledge of the company’s activities.• Al-Eman did considerable business with Syriathrough the “Syrian Protocol,” an arrangement offalse purchases and kickbacks that laundered fundsfor Iraqi purchases.The Al-Eman Group was also involved in the OFFkickback scheme through the Jordan National Bankand embassy commercial attaches. Upon completionof services under UN OFF, the Banque Nationale deParis deposited payments in the National Bank ofJordan, which provided banking services to Al-Eman.The National Bank of Jordan automatically deducteda 10-percent performance/kickback from the UN OFFpayment. The National Bank of Jordan then depositedthe kickback amount into accounts controlledby the Iraqi Regime. The CAs in the Iraq embassiesplayed a key role in orchestrating procurement andfinancial activity. The attaches arranged collectionand transferred kickbacks, and Al-Eman worked veryclosely with them.The Al-Eman NetworkDozens of companies were included in the Al-Emannetwork, most of which were either owned or operatedby members of the Al-Gaaod family. The followingtable (see Figure 52) is a sampling of some ofthe Al-Eman companies and their role in acquiringmaterials for the Iraqi government:Al-Gaaod’s Ties to Iraqi LeadershipAl-Gaaod was one of Saddam’s most trusted confidantsin conducting clandestine business transactions,often traveling abroad using an Ecuadorianpassport. Just prior to March 2003, he traveled toSweden and Ukraine on behalf of Qusay.• Al-Gaaod also had a close partnership with ‘Udayand Husayn Kamil, and was a key player in theMIC.• He assisted As’ad Al Ubaydi Hamudi, the brother ofDr. Nazar Al ‘Ubaydi Hamudi, a scientist involvedin producing chemical weapons, in obtaining contractswith the Al Qa’qa’a General Company, TheAtomic Energy Company, the Al-Karamah StateEstablishment the Al Basil General Company, theAl Muthanna State Establishment and over 25 othercompanies within the MIC from 1992 until 2002.• Al-Gaaod, Dr. Nazar, and Assad are all linked tothe Al Abud network described in the CW section ofthis report.Key Al-Eman Owners: Sattam Hamid FarhanAl-Gaaod and His Family. Extended family plays akey role in Al-Eman operations. As of March 2003,three of Sattam Hamid Farhan Al-Gaaod’s cousins ransubsidiary or affiliated companies in the network.• Jalal Al-Gaaod owns the subsidiary Sajaya.• Talal Al-Gaaod functions in a public relations rolefor the family.• Hamid Al-Gaaod is owner of the Al-Yanbu Company.The Iraqi Regime arrested both Talal and Hamid Al-Gaaod in 1996 as a result of unspecified financial andcontractual problems related to deals with the MoA.As of late 2001, Sattam Hamid Farhan Al-Gaaod’sbrother, Abd al-Salam Farhan Al-Gaaod was runninga firm called Al-Arab Agencies. This company wasused for shipping, operating primarily out of Basrah.Al-Arab handled many of the firm’s transport requirementsand petroleum exports via the Gulf.88
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Comprehensive Reportof the Special
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versus another. They deserve at lea
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In Saddam’s view, Iraq was the na
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UNSCOM gave a sufficiently positive
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The Regime, drawing on the experien
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December 1998. The United States an
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The new Iraq could benefit from the
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and the Baath party. This is a volu
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have been important, though they ha
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Regime StrategicIntentRegime Strate
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ContentsKey Findings...............
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AnnexesA. The Quartet—Influence a
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Key FindingsSaddam Husayn so domina
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Former Iraqi Regime Officials Varie
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Who Made Iraq’s StrategicDecision
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• Tariq ‘Aziz described the req
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• Instead, voluminous files were
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secure Saddam’s support for odd o
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Saddam’s Use of Execution—Manag
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solely for civilian use when the re
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directly and continuously to him. H
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How Saddam Saw HisSubordinatesMinin
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Saddam’s PsychologyHow Saddam Saw
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to consist of was hazy. His drive t
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Iraq’s Use of CW in 1991 Against
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Excerpts from a Closed-Door Meeting
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maker asserted that either country
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Israel“There can never be stabili
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Saddam’s handling of Iraq’s res
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this to the international community
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Regime StrategicIntentNote: Red cel
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Iraq’s Relationship With RussiaTh
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Realizing Saddam’s VeiledWMD Inte
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Selected UN Security Council Resolu
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Husayn KamilBorn in 1955 within the
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ibility with UNSCOM. Iraqi demands
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and the International Atomic Energy
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The Saga of the “Chicken Farm”
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Security Services (continued)The Sp
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VX Warhead Samples & The Iraqi Air
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success—reduced or suspended oil
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Preserving and Restoring WMD Infras
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• The Regime also sought diplomat
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Renewing UN InspectionsIraq allowed
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never part of the military plan cra
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• Former Minister of Defense Sult
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Annex AThe Quartet—Influence and
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Perceptions of Threat and Challenge
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OverviewAnnex BIraq’s Intelligenc
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Regime StrategicIntentThe Scientifi
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M6, Directorate of Internal Securit
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Structure of M14• Special Operati
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M18, Directorate of ResidencyM18 is
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Structure of M40• M40/1 Monitors
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OverviewAnnex CIraq’s Security Se
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The Special SecurityOrganizationSad
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Regime StrategicIntentThe Special S
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Structure of the SSO Security Branc
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The Republican GuardThe Republican
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The Republican Guard Forces Command
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Annex DSaddam’s Personal Involvem
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[Translator Comment: they are in go
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Regime Financeand ProcurementRegime
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ContentsA Word on the Scope of This
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MIC Banking and Financing .........
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A Word on the Scope of This Chapter
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Key FindingsThroughout the 1990s an
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ents. He made all modifications to
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Chapter SummaryThe Illicit Finance
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The Regime TimelineDecline (1991-96
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OverviewDirecting and Budgeting Ira
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Regime Financeand ProcurementFigure
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Iraq’s National Budget 1991-2002A
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OverviewFinancing Iraq’s IllicitP
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including abolishing universal empl
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Behind the scenes, the Iraqi govern
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for what they imported in 1992, pro
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Figure 10. Iraq’s estimated earni
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stated that he believed the Russian
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documents. Ten other Iraqi embassie
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Page 176 and 177: SOMO Account Balances Outside of Ir
Page 178 and 179: Regime Financeand ProcurementFigure
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Page 188 and 189: OverviewExecuting Illicit Procureme
Page 190 and 191: necessary to accommodate the large
Page 194 and 195: offices, there was only a single em
Page 196 and 197: MoD’s Procurement Leadership at t
Page 198 and 199: Although other Iraqi ministries wer
Page 200 and 201: From 2000 onwards, the RG’s annua
Page 204 and 205: The information provided by these t
Page 208 and 209: its real activity, which was coordi
Page 212 and 213: • In May 2002, ARMOS was offered
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Page 218 and 219: • A foreign intelligence service
Page 220 and 221: MIC Research Support at Universitie
Page 224 and 225: Figure 51. Sattam HamidFarhan Al-Ga
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Page 232 and 233: • The technology included guidanc
Page 236 and 237: Embassy to Jordan in Amman. The fir
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Page 240 and 241: Since 1991, Iraqi-Turkish trade rev
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Page 244 and 245: Chinese Assistance in Iraqi Telecom
Page 246 and 247: October 2001, Syrian technicians we
Page 248 and 249: • Yugoslav Federal also supplied
Page 252 and 253: jammers, night-vision devices, and
Page 254 and 255: • According to captured documents
Page 256 and 257: Transportation Routes From North Ko
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Page 264 and 265: conflict, President Lukashenko inst
Page 266 and 267: Many transactions for prohibited go
Page 268 and 269: Importing ProhibitedCommoditiesDece
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Disguising the Commodity’s Destin
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months to reach Baghdad from Bulgar
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Figure 68. Primary oil smuggling ro
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Annex ATranslations of Iraq’s Bil
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An ISG Translation of the 2003 Iraq
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Benzene for automobiles:If there is
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Secondly: oil derivativesThe Iraqi
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Fifteenth:Based on the Jordanian re
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Figure 1. The Iraq-SyriaTrade Proto
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Figure 2. Iraq-Syria TradeProtocol
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Figure 3. The Iraq-TurkeyTrade Prot
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Annex BKnown Oil Voucher Recipients
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Oil Allocation RecipientList (conti
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Key Budgetary ActorsAnnex CIraq’s
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decision and issued a presidential
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• The NSC Auditing Division sent
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Annex DIraq Economic Data (1989-200
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Figure 8. Sectoralcomposition of Ir
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Figure 10. Iraq’s Paris Clubcredi
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Balance of Payments/Exchange RatesE
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Figure 16. Exchange rateID/USD.Regi
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Annex EIllicit Earnings Sources and
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account for half a year each, were
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Annex FIraqi Oil SmugglingCaptured
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ISG Translation of an Oil Sale Cont
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truck to the Turkish border. Althou
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Figure 22. Contractbetween the Nati
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Figure 22. Contractbetween the Nati
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Figure 24. Letter from A.J.Khazamip
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Figure 25 . Second letterfrom A.J.
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Figure 27. Contract forpetroleum pr
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Figure 27. Contract forpetroleum pr
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Figure 29. Contractbetween al Basha
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Figure 29. Contractbetween al Basha
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Figure 31. Telex from aFrench bank
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Figure 32. Unipack ofParis contract
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Figure 33. Telex from VitolGeneva t
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Figure 35. Letter dated 30December
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Annex GIraq’s Banking Systemdid n
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Figure 37. Department,department di
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anks for some transactions in the b
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Annex HUN Security Council Resoluti
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• UNSCR 1175 also noted that the
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Annex ISuspected WMD-Related Dual-U
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• An electrophoresis system inclu
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• The MIC initiated direct contac
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Annex JThe Procurement of Conventio
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Possible Breaches of UN Sanctions b
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Letters Dealing With a Planned Visi
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ack to Baghdad without repair. The
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specified that the Iraqi attendees
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• In April 1999, seven Russian en
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• The letter also indicates that
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• In another letter, SARA-M refer
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Possible Belarusian Breaches of UN
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Possible Syrian Breaches of UN Sanc
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• A recovered contract dated 20 F
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9k38 portable air defense systems (
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Annex KSuspected Intermediary andFr
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Atera ManufacturingDaei Internation
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Annex LProcurement AcronymsAcronymA
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IAFIraqi Armed ForcesIDIraqi DinarI
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TPICTTCUAEUAVUDMHUHFUNUNCCUNDPUNESC
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Regime Strategy and WMD Timeline Ev
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