Volume 1 - Iraq Watch

Supplying Iraq With ProhibitedCommoditiesProcurement Suppliers During the Decline Phase,1991 to 1996OverviewDespite UN sanctions, many countries and companiesengaged in prohibited procurement with theIraqi regime throughout the 1990s, largely becauseof the profitability of such trade.• Private companies from Jordan, India, France, Italy,Romania, and Turkey seem to have engaged in possibleWMD-related trade with Iraq.• The Governments of Syria, Belarus, North Korea,former Federal Republic of Yugoslavia, Yemen, andpossibly Russia directly supported or endorsed privatecompany efforts to aid Iraq with conventionalarms procurement, in breach of UN sanctions.• In addition, companies based out of the following14 countries supported Iraq’s conventional armsprocurement programs: Jordan, the People’s Republicof China, India, South Korea, Bulgaria, Ukraine,Cyprus, Egypt, Lebanon, Georgia, France, Poland,Romania, and Taiwan.ISG has identified entities from three countries thatbegan supporting Iraq with illicit procurement duringthe post-Gulf war “decline” phase in the Regime:Romania, Ukraine, and Jordan. Romania and Ukrainehad just emerged from the Soviet bloc with an excessof military hardware and expertise and a need forhard currency. Jordan, which profited primarily fromallowing transshipment, argued that Iraq was a majortrading partner before 1991 and trade with Iraq was anecessity.RomaniaAccording to a high-level official of the former Iraqiregime, trade between Iraq and Romania flourishedduring the Ceauscescu era (1965 to 989). The IIS hadan active presence in Romania throughout this periodand MIC engineers were active in procurement programsdirected from the Iraqi Embassy in Bucharest.• In the mid-1990s, reporting indicated that the IraqiMFA and MIC were both interested in changes toRomanian export controls over nuclear, biological,and chemical weapons and their associated technologies.Regime Financeand Procurement• The number of countries and companies supportingSaddam’s schemes to undermine UN sanctionsincreased dramatically over time from 1995 to 2003(see figure 54).• A few neighboring countries such as Jordan, Syria,Turkey, Egypt, and Yemen, entered into bilateraltrade agreements with Iraq. These agreements providedan avenue for increasing trade coordinationand eventually led to sanctions violations.The countries supporting Iraq’s illicit procurementchanged over time. These changes reflected trendsbased on Saddam Husayn’s ability to generate hardcurrency to buy items and the willingness of theinternational community to criticize those countriesselling prohibited goods to the Regime. The followingsections addressing each country have been groupedaccording to when evidence indicates they began supportingSaddam’s illicit procurement programs.According to documents identified by UNSCOMin Operation Tea Cup, Iraq reestablished a procurementrelationship with the Romanian firm Aerofina inFebruary 1994. The Iraqis and Romanians conductedtwo to three delegation visits between Bucharest andBaghdad to discuss sending Romanian missile expertsto Iraq to assist with design and guidance controlproblems in the Al Fat’h missile, later called the alSamud, and to obtain missile parts and related rawmaterials.• By August 1994, several procurement contracts hadreportedly been signed.• In November 1995, the Iraqi’s sent a letter toAerofina requesting that the missile repair part shipmentsbe temporarily stopped due to concerns overthe quality of the goods.93