Iraq: Compliance, Sanctions, and U.S. Policy
protest of the U.S. proposals. Not wanting to jeopardize Russian or moderate Arab
cooperation with the war against the Taliban and bin Laden, on November 29, 2001, the
United States and Russia, along with the other Security Council members, agreed
(Resolution 1382) to authorize a phase eleven with no changes. There was consensus to
work, by the time of the next rollover (May 30, 2002), to agree on a list of goods that would
still require review for export to Iraq; a draft listed was attached to Resolution 1382. The
United States and Russia agreed on that list on March 28, 2002, raising hopes for the
modified sanctions plan to be adopted at the May 30 oil for food rollover. The United States
and Russia also agreed to work to obtain the return of weapons inspectors to Iraq, perhaps
in exchange for a broad easing of sanctions under Resolution 1284. According to a
Washington Post story of January 16, 2002, in December 2001 the United States released
holds on $200 million worth of proposed Russian exports to Iraq in order to enlist Russian
support for the new sanctions regime. In early March 2002, in an effort to stress the risks
of easing sanctions, the United States showed satellite photos to the other Security Council
members indicating Iraq had converted some trucks imported under the oil for food program
for military purposes.
Another issue is that of international flights to Iraq. Since August 2000, France, Russia,
and several of Iraq’s neighbors have challenged the U.S. interpretation that U.N. Resolution
670 (September 25, 1990) bans passenger flights to and from Iraq; and there has been a
revival of significant air traffic into and from Iraq. (The resolution bans flights carrying
“cargo,” except humanitarian cargo, subject to Sanctions Committee approval.) In early
November 2000, Iraq restarted passenger flights within Iraq and its officials have begun flying
directly to other countries. The United States has not objected to the internal flights.
France, Russia, and China might also seek to permit new investment in Iraq’s energy
sector. Such investment is provided for by Resolution 1284 only after Iraq fully complies on
outstanding WMD issues. Chinese, Russian, and French firms already have agreed to specific
energy investment projects in Iraq, under the condition that the investment ban is lifted. As
a possible sign of some easing on this issue, in February 2001 the Sanctions Committee
approved plans by two Russian companies (Zarubezhneft and Tatneft) to drill about 100 wells
in existing fields in Iraq. The Sanctions Committee also approved a contract between
Baghdad and Ankara, signed in December 2001, for a Turkish energy firm to drill 20 wells
near Kirkuk.
Previous negotiations on Iraq sanctions sought to prevent Iraq from skirting oil-for-food
guidelines in the course of exporting oil. There are continued reports that small oil trading
companies are paying Iraq these surcharges, and, in April 2001, the U.S. government warned
U.S. firms against buying Iraqi oil from traders that are paying the surcharge. In early 2002,
the United States and Britain persuaded the Sanctions Committee to institute a new oil pricing
mechanism that would keep Iraq’s price closer to the world price and cut down the margin
for surcharging. The U.N. official in charge of the oil-for-food program said the new
mechanism was affecting the oil contracting process to the point that Iraq’s oil exports have
fallen about 25%, from about 2.1 million barrels per day (mbd) to about 1.5 mbd.
Formally, comprehensive U.S. trade sanctions against Iraq have been in place since
Iraq’s 1990 invasion (Executive Order 12722 of August 2, 1990, Executive Order 12724 of
August 6, 1990, and the Iraq Sanctions Act of 1990, Section 586 of P.L. 101-513). Since
then, U.S. trade regulations have been amended to align them with the oil-for-food program.
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