Volume 1 - Iraq Watch

Importing ProhibitedCommoditiesDeceptive Trade PracticesSupporting Illicit ProcurementOverviewUse of Trade IntermediariesIraq under Saddam Husayn used various methods toacquire and import items prohibited under UN sanctions.Numerous Iraqi and foreign trade intermediariesdisguised illicit items, hid the identity of theend user, obtained false end-user certificates, and/orchanged the final destination of the commodity toget it to the region. For a cut of the profits, these tradeintermediaries moved, and in many cases smuggled,the prohibited items to land, sea, and air border entrypoints along the Iraqi border.Trade intermediaries were a specific subcategory offront company that served as middle-men or agentsfor illicit procurement between the Iraq clients andinternational suppliers. On the surface they weretransport-related businesses such as freight or shippingcompanies that disguised the routing, destination,or purpose of acquired goods. They were eitherforeign or domestic companies and charged a percentageof the contract fee for their services. There werethree types of Iraqi trade intermediaries:Regime Financeand Procurement• Companies in Syria, Jordan, Lebanon, Turkey,UAE, and Yemen assisted Saddam with the acquisitionof prohibited items through deceptive tradepractices. In the case of Syria and Yemen, thisincluded support from agencies or personnel withinthe government itself.• Numerous ministries in Saddam’s Regime facilitatedthe smuggling of illicit goods through Iraq’sborders, ports, and airports. The IIS and MIC,however, were directly responsible for skirtingUN monitoring and importing prohibited items forSaddam.• Companies in full collusion with the formerRegime (often these were owned or operated by theRegime).• Intermediaries willing to overlook ambiguous orpartially completed trade documents if the profitmargin was sufficient.• Companies that were unaware of the Iraqi involvementin the contract because of falsified paperworkor Iraqi deception.The conditions for illicit trade via intermediaries wasset by the reestablishment of normal trade under the1996 UN OFF Program and the bilateral trade protocolswith Jordan, Syria, and Turkey. These protocolsprovided effective cover for illicit trade to occur,establishing legitimate linkages between tradingcompanies, and making it more difficult to monitorcompliance with UN sanctions.• Iraqi trade companies established branch offices inneighboring countries or to call on the support ofaffiliated/sister companies operating abroad. Sometimesthese branch offices/sister companies representedthe primary office for soliciting offers fromforeign suppliers. These relationships gave theappearance that commercial business was beingconducted with business clients in the neighboringcountry, rather than Iraq.133