Iraq: Compliance, Sanctions, and U.S. Policy
Turkey. Turkey estimates that it has lost $35 billion as a result of the sanctions. The
Turkish government now regulates and taxes the illicit importation of about $400 million per
year in Iraqi energy products by Turkish truck drivers returning from Iraq. That truck traffic
resumed in January 2002 at a low level after a 4-month shut down by Iraq - an Iraqi effort to
punish the Kurds who earn customs revenue from the trade. U.S. sanctions against Turkey
for this trade have routinely been waived. In April 2000, Iraq and Turkey neared agreement
to increase bilateral trade to about $2.5 billion per year, roughly pre-war levels. Turkey
returned an Ambassador to Iraq in January 2001.
Iran/Persian Gulf States. In enforcing the embargo, two U.S. ships lead a
Multinational Interdiction Force (MIF) that conducts maritime searches in the Persian Gulf
to prevent the smuggling of oil and other high-value exports. The United States has asserted
that Iran’s Revolutionary Guard has been helping Iraq smuggle out the oil exports in
exchange for “protection fees,” although Iran did stop some illicit shipments in mid-2000,
earning some U.S. praise. Despite these exceptions, Iran’s cooperation helped Iraq’s illicit
exportation reach a high in mid-2000 of about $80 million per month, and Iraq reportedly
earned a net of about $600 million for all of 2000, according to British military officials. It
should be noted that Iraq receives only half the export value after paying off the
Revolutionary Guard and smugglers. Smuggling through this route has fallen substantially
since early 2001, indicating that Iraq is increasing its use of a pipeline to Syria (see below).
In October 2001, the United Nations produced evidence of continued illicit oil exports
through the Gulf.
Iranian-Iraqi relations have improved since 1995. The two exchanged 6,000 prisoners
from the Iran-Iraq war in April 1998 and smaller batches of prisoners and remains since. In
early October 2000, the two agreed to abide by the 1975 Algiers Accords that delineated their
border, and Iran’s Foreign Minister visited later in the month, a sign of accelerating
rapprochement. Iraq’s Foreign Minister visited Iran in January 2002, and Iran released over
600 Iraqi prisoners still held. Regarding Iraq’s relations with the Gulf monarchy states, in
April 2000, the UAE and Bahrain reopened embassies in Baghdad, leaving Kuwait and Saudi
Arabia as the only two Gulf monarchies without relations with Iraq. As noted above, Kuwait
and Iraq, in conjunction with Saudi Arabia, took steps to reconcile at the Arab League
summit in Jordan (March 27-28, 2002).
Syria/Lebanon/Egypt. Syria and Iraq began a warming trend in relations by
reopening their border in 1997; this trend has continued since the July 2000 accession of
Bashar Assad to the presidency of Syria. Since late 1998, the two countries have benefitted
from the reopening of the Iraq-Syria oil pipeline, closed since 1982, and Iraq has been sending
about 150,000 - 180,000 barrels per day of oil through the line, under a “swap” arrangement
in which Syria uses the oil domestically and exports an equivalent extra amount of its own oil.
Because of discounts offered to Syria, Iraq earns about $1-2 million per day from this illicit
exportation, skirting the oil-for-food program. Resolution 1284 (paragraph 16) lays the
groundwork for the opening of this route, but Syria and Iraq are resisting controls on this
trade. Syria has not implemented its pledge to Secretary of State Powell, made during his
February 2001 visit to Damascus, that Syria would place the pipeline under oil-for-food
guidelines, and press reports say the Bush Administration has not pressed Syria to uphold this
commitment in order to earn Syrian cooperation in the war on terrorism. In May 2001, Iraq
and Syria reopened diplomatic missions in each others’ capitals.
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