Volume 1 - Iraq Watch

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Regime StrategicIntentNote: Red cells indicate periods of no exports; yellowcells, periods of reduced exports; blue cells indicateperiods where Iraq imposed surcharges on oil sales.Figure 2. Average oil price by month (1999-2001).Figure 3. OPEC oil production (1973-2003).37
Iraq’s Surcharge on Oil and Regime Decision MakingThe description of the surcharge episode by theformer Minister of Oil, ‘Amir Muhammad Rashid Al‘Ubaydi, while a detainee, provides an interestingexample of the Regime’s decision-making process.In the autumn of 2000 the talk of a surcharge began.Saddam never asked me about the surcharge. Hetalked to a group of sycophants who simply toldhim he had a great idea. Huwaysh would make arecommendation and Saddam would follow himblindly. Huwaysh suggested 10 percent [suggesting10 percent of the oil company’s profi t margin].I never attended a meeting and without me it wasnot a proper meeting. Ramadan formed a committeeto determine how to divert some fi xed part of thebuyer’s profi t margin to the Iraqi Government. Theidea was supported by both Ramadan and ‘Aziz.They finally agreed on 10 percent a barrel.What happened? The professionals (France, Italy,Spain, Russia) refused to buy from us. [The effectof the surcharge was to remove Iraqi oil from themarket.] However, the individuals with whom wewere trading had contracts with the trading companies.I went to the trading companies to get themto share their profit margin with us. They refused.Saddam was very critical of my efforts but I didn’tcare if I lost my job.A new committee was formed. This committeeincluded the sycophants and the “genius.” When Iwent to the meeting I brought the three top expertsfrom SOMO. They told the committee that it wasimpossible to do more than 10 cents a barrel. Nevertheless,the committee recommended 50 cents. Whathappened? They stopped buying from us. Our exportswere about 2.2 to 3.1 mbd over the time period inquestion.After two weeks I went to Saddam and got him tolower the price to 40 cents. Our exports rose about30%. The companies put pressure on SOMO to lowerthe price.A third meeting was held. I participated together withSOMO. ‘Aziz and Ramadan supported me, but theywere afraid to speak up. Finally we decided on 30cents a barrel selling to the US and 25 cents a barrelselling to Europe.Now the problem became how to explain the situationto OPEC. We couldn’t tell them about the surchargebecause it was illegal. Of course we thought the oilwas Iraq’s and we could do what we wished with it.But that was not the international situation.This situation remained through part of 2002. Idecided to fi ght. No one was lifting Iraqi oil. I talkedto Foreign Minister ‘Aziz and he pointed out that wehad lost all our friends. So we fi nally went back to 10cents a barrel for the last part of 2002.Overall, we lost $10,000,000 in exports.38
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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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Page 19 and 20: and the Baath party. This is a volu
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Page 24 and 25: Regime StrategicIntentRegime Strate
Page 26 and 27: ContentsKey Findings...............
Page 28 and 29: AnnexesA. The Quartet—Influence a
Page 30 and 31: Key FindingsSaddam Husayn so domina
Page 32 and 33: Former Iraqi Regime Officials Varie
Page 34 and 35: Who Made Iraq’s StrategicDecision
Page 36 and 37: • Tariq ‘Aziz described the req
Page 38 and 39: • Instead, voluminous files were
Page 40 and 41: secure Saddam’s support for odd o
Page 42 and 43: Saddam’s Use of Execution—Manag
Page 44 and 45: solely for civilian use when the re
Page 46 and 47: directly and continuously to him. H
Page 48 and 49: How Saddam Saw HisSubordinatesMinin
Page 50 and 51: Saddam’s PsychologyHow Saddam Saw
Page 52 and 53: to consist of was hazy. His drive t
Page 54 and 55: Iraq’s Use of CW in 1991 Against
Page 56 and 57: Excerpts from a Closed-Door Meeting
Page 58 and 59: maker asserted that either country
Page 60 and 61: Israel“There can never be stabili
Page 62 and 63: Saddam’s handling of Iraq’s res
Page 64 and 65: this to the international community
Page 68 and 69: Iraq’s Relationship With RussiaTh
Page 70 and 71: Realizing Saddam’s VeiledWMD Inte
Page 72 and 73: Selected UN Security Council Resolu
Page 74 and 75: Husayn KamilBorn in 1955 within the
Page 76 and 77: ibility with UNSCOM. Iraqi demands
Page 78 and 79: and the International Atomic Energy
Page 80 and 81: The Saga of the “Chicken Farm”
Page 82 and 83: Security Services (continued)The Sp
Page 84 and 85: VX Warhead Samples & The Iraqi Air
Page 86 and 87: success—reduced or suspended oil
Page 88 and 89: Preserving and Restoring WMD Infras
Page 90 and 91: • The Regime also sought diplomat
Page 92 and 93: Renewing UN InspectionsIraq allowed
Page 94 and 95: never part of the military plan cra
Page 96 and 97: • Former Minister of Defense Sult
Page 98 and 99: Annex AThe Quartet—Influence and
Page 100 and 101: Perceptions of Threat and Challenge
Page 102 and 103: OverviewAnnex BIraq’s Intelligenc
Page 104 and 105: Regime StrategicIntentThe Scientifi
Page 106 and 107: M6, Directorate of Internal Securit
Page 108 and 109: Structure of M14• Special Operati
Page 110 and 111: M18, Directorate of ResidencyM18 is
Page 112 and 113: Structure of M40• M40/1 Monitors
Page 114 and 115: 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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were made to at least two Iraqi fro
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Figure 21. Iraq’s estimated earni
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SOMO Account Balances Outside of Ir
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with an *) shows the total proceeds
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seas accounts in Lebanon and Jordan
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and the overseas banks forwarded ac
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assets in employee-named accounts.
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OverviewExecuting Illicit Procureme
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necessary to accommodate the large
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offices, there was only a single em
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MoD’s Procurement Leadership at t
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Although other Iraqi ministries wer
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From 2000 onwards, the RG’s annua
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The information provided by these t
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its real activity, which was coordi
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• In May 2002, ARMOS was offered
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officer suggested Neptune would be
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• A foreign intelligence service
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MIC Research Support at Universitie
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Figure 51. Sattam HamidFarhan Al-Ga
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Supplying Iraq With ProhibitedCommo
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UNSCOM’s Operation Tea Cup (1995
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• The technology included guidanc
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Embassy to Jordan in Amman. The fir
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Regime Financeand ProcurementThis i
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Since 1991, Iraqi-Turkish trade rev
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cash through private sector trade o
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Chinese Assistance in Iraqi Telecom
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October 2001, Syrian technicians we
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• Yugoslav Federal also supplied
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jammers, night-vision devices, and
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• According to captured documents
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Transportation Routes From North Ko
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Materials, Equipment and Services P
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conflict, President Lukashenko inst
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Many transactions for prohibited go
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Importing ProhibitedCommoditiesDece
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International Commodity Deception:T
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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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