Volume 1 - Iraq Watch

Figure 58. Allocation of the goods portion of the TurkishProtocol, 2000-2003.cations to ministries from the Turkish trade protocol.According to captured documents, the Iraqi MoTprocured 10,000 small generators, Mitsubishi pickuptrucks, and assorted construction materials during2002 through the Syrian SES International withmoney accrued by trade covered from the Turkishtrade Protocol.Methods Iraq and Turkey used to Hide IllicitProcurement. Turkey did not undertake any activemeasures to hide its illicit trade with Iraq. Indeed, thistrade was conducted in a semi-transparent fashion.Multiple open sources frequently reported the illicittrade between Turkey and Iraq. The illicit oil tradeand most of the protocol trade was conducted throughthe Habur bridge (or gate) near Zakho on the Iraq-Turkey border. Both secret and open sources describethis flow of trade.Financial Flows Between Iraq and Turkey. Highlevelsources affirm that both Iraq and Turkey agreedto open a trade account denominated in US dollars inthe name of TPIC (Turkish Petroleum InternationalCompany), but run for the benefit of SOMO, at theTurkiye Halk Bankasi A.S. (also known as Halkbank),a Turkish state-owned bank. This indicates a fairdegree of complicity in illicit activity between Iraqand Turkish state institutions. According to the 16January 2000 Protocol, 70 percent of the value of thecrude imported by Turkey under the Protocol wouldbe deposited in Halkbank. The remaining 30 percentwould be deposited directly by the crude purchaserto accounts at the Saradar Bank in Lebanon or theAhli Bank in Jordan that were designated by SOMO.Tekfen, a Turkish oil company, was the only companyto deposit money into the Ahli Bank. Other Turkishoil companies paid into the Saradar Bank.According to open sources, since 2000 the UN OFFprogram, the trade protocol and other illicit Turkishoil importation, generated over $1 billion per yearfor Iraq. This revenue, however, pales in comparisonto the $2.5 billion in bilateral trade that took placein 1990. SOMO documents state $710.3 millionwas collected from the Turkish Protocol from contractssigned between July 2000 and February 2003.According to SOMO documents, it is estimatedSOMO collected $538.4 million in barter goods and106