Volume 1 - Iraq Watch

Disguising the Commodity’s DestinationPerhaps the most basic method for Iraq to skirtinternational scrutiny was to simply list a neighboringcountry as the final destination, when in fact thecommodities were only held there until they couldbe smuggled to Iraq by Saddam’s agents. Because ofthe high amount of ordinary trade occurring under thebilateral trade protocols, and government complicity,Syria and Jordan were the most common transit countriesused as false destinations for prohibited commoditiesbound for Iraq. The UAE also served as atransit location and, according to reporting, profiteersin Iran even took part in transiting Russian goods intoIraq. The MIC paid these transit services with theprofits of oil sales under the trade protocols.• According to a report, the Al Raya Company, anIIS front company, requested weapons from Syrianor Jordanian arms dealers. The merchant wouldacquire the goods in Syria or Jordan and move theminto Iraq through the Jordanian Free CommercialZone. This free trade zone was controlled by theJordanian Ministry of Finance and Jordanian IntelligenceService and it served as an effective conduitfor importing prohibited items through Jordan toIraq. This report corroborates other reporting on therole of Jordan prior to 1999.• After 1999, the MIC’s Al-Basha’ir Company servedas a primary conduit for handling illicit shipmentsvia Syria. At the MIC’s request, Syrian trade companiesobtained specific items for Iraq, primarilyfrom suppliers in Russia, Bulgaria, Ukraine, andother Eastern European countries. When deliveredto Syria, Al-Basha’ir took delivery of the commoditiesunder the oversight and assistance of Syriangovernment officials. These officials normallyreceived a 12.5-percent mark-up as a kickback toensure goods moved from Syria to Iraq without disruption.Al-Basha’ir then smuggled the items intoIraq and delivered them to MIC.• In another case, seized documents reveal that in2000 the Indian NEC Company delivered “100explosive capsule units for the RPG-7” to the Al-Basha’ir Company in Iraq by leasing “a privateplane which delivered the shipment directly to Syriawith great difficulty.”Use of Illicit Smuggling andTransportation NetworksIraq has been at the center of various trade routesfor centuries. Historically, this trade involved illicitactivity, or smuggling, to escape taxes or to evadegovernmental oversight. Despite the imposition ofsanctions by the United Nations in 1990, Iraq managedto circumvent UN sanctions through longestablishedbusiness relationships with its neighbors,cross-state tribal connections, and use of ancientsmuggling routes. Contemporary smuggling methodsused by Iraqi trade companies used the entirespectrum of smuggling methods: disguising illicitshipments as legitimate cargo; hiding illicit goods inlegitimate shipments; avoiding customs inspections;and for high priority, low-volume shipments, usingIraqi diplomatic couriers.Captured documents indicate that there were approximately500 official and unofficial border crossingpoints between Iraq and Syria, Jordan, Saudi Arabia,Kuwait, and Iran. According to the documents, therewere also other border checkpoints between Iraqand Turkey and between Iran under Kurdish control.Despite the number of possible crossings, almost allgoods entered Iraq at just five major border crossingsand the port of Umm Qasr.• Only goods supplied under the UN OFF Programwere subject to UN inspection at the four permittedborder points; Turaybil/Al-Karamah on the Jordanian-Iraqiborder, Tanf/Al Qaim on the Syrian-Iraqiborder, Habur Bridge/Zakho on the Turkish-Iraqiborder, Ar’ar on the Saudi-Iraqi border and the portof Umm Qasr on the Gulf.A mid-level Iraqi official asserted that Iraq signeda formal transport agreement in the 1990s. Theseagreements ensured that before 1999 Jordan wasthe primary conduit of illicit trade with Iraq. Thechange in the Iraqi-Jordanian relationship waspromoted by a combination of improvement inIraqi-Syrian relations, and Jordanian concern overincreased political scrutiny in the United States.Regime Financeand Procurement137