> >From: Mark Clement <[EMAIL PROTECTED]> > >IRAQ SANCTIONS MONITOR Number 125 >Friday, September 22, 2000 > >LATEST NEWS++++++++++++++++++++++ > >Iraq scores points in UN Security Council. >UNITED NATIONS, Sept 22 (Reuters) - With support from France and Russia, the >Arab world and beyond, Iraq scored points in the U.N. Security Council in >its militant campaign to get 10-year old U.N. sanctions abolished. > >While Jordan has requested U.N. permission to resume air service to Baghdad, >France on Thursday took the issue a step further, saying passenger flights >were not banned and one was leaving Paris on Friday, whether or not the >council approved. >Its position immediately brought it into conflict with Britain, which said >it had asked the council's sanctions committee to delay the plane until >there was more information on the humanitarian nature of the flight carrying >some 80 young artists, doctors and activists to Baghdad. But it was doubtful >France would hold the flight. > >France also led the way, with support from Russia, China and Tunisia, in >proposing the monies Baghdad contributes to a U.N. compensation fund for >Gulf War victims from its oil revenues be reduced from 30 percent to 20 >percent. > >And a senior U.N. official chastised the United States for delaying Iraqi >contracts on oil industry spare parts, electricity grid equipment and in the >telecommunications sector, saying the nation needed such contracts to >function properly. > >While no decision was taken by the council in closed consultations on >Thursday, the issue will be raised again. >But on a day world leaders were talking about record high oil prices, Iraqi >actions and U.N. policies have made the market aware that Baghdad can drive >prices even higher. > >Still, Iraq, over the last 10 years, has not withheld oil, except for brief >periods, in protest of a U.N. action. Baghdad is expected, at current >prices, to sell between $18 billion and $20 billion worth of oil this year. > >Iraq has been under sanctions since it invaded Kuwait in August 1990. A >December council resolution 1284 demands Baghdad allow U.N. arms inspectors >back into the country before sanctions be eased. > >But Iraqi Foreign Minister Mohammed Saeed al-Sahaf repeated Baghdad's >assertion to the U.N. General Assembly on Thursday that the resolution >represented a deliberate U.S. ploy to perpetuate the embargo "to an >unforeseeable point of time." >"We have therefore clearly declared that we shall not deal with this >resolution," he said. > >Benon Sevan, the coordinator of the oil-for-food programme designed to ease >the impact of the sanctions, pleaded with Iraq and council members to stop >playing politics and "think of the human factor and think about the poor >Iraqi people." > >Sevan did not attack the United States by name but he said "holds" on >contracts to Iraq, estimated at $2 billion, were causing disruptions in the >oil-for-food programme under which Baghdad can sell unlimited quantities of >oil to purchase food, medicine and other goods. Most of the holds are from >the United States. > >"Unless special efforts are made by the committee members to release all the >holds from spare parts for the oil industry, they may have a major >accident," Sevan warned. > >"They cannot sustain current production levels and they are producing now at >the expense of the future because they are harming their oil wells and, >matter of fact, they are destroying some of them irreparably," he told >reporters. > >In response, U.S. representative James Cunningham said the United States had >to watch Iraq did not import goods that could be used for military purposes >and that U.S. delays affected no more than 10 percent of Baghdad's requests. > >"We know there are problems in the oil industry in Iraq and we have created >the wherewithal to address these problems," Cunningham told reporters after >the council session. > >At the same session, France, backed by Russia and Tunisia, on Thursday >proposed reducing to 20 percent the funds from its oil revenues that Baghdad >must pay to compensate victims of its 1990 invasion of Kuwait. Currently >Iraq must pay 30 percent. >British and U.S. envoys said they were willing to talk about a possible cut, >but not about one as large as France proposed. >Russia's U.N. ambassador, Sergei Lavrov, first raised the compensation issue >in August in challenging a $21.5 billion claim by Kuwait for lost oil >production and sales during Iraq's seven-month occupation of the emirate in >1990. A panel of arbitrators has recommended awarding $15.9 billion. > >Kuwait's claim will be considered again when the commission's governing >council, which has the same 15-nation membership as the Security Council, >meets in Geneva next week. > >Both Cunningham and British ambassador Sir Jeremy Greenstock told reporters >there were enough votes in Geneva veto, to adopt the recommended $15.9 >billion award. >But they said they preferred consensus - meaning that the decision might be >delayed again because of objections from Russia, France, and others. A >senior Russian U.N. envoy, Gennady Gatilov, said Moscow would ask for a >delay. > >Saddam might spoil Opec's hand. >FTSE slips through oil crisis >It is known, in market circles, as the `slow punch' - that is, a sharp fall >in prices which happens over a number of days or even weeks rather than on >one headline generating day. Market participants tend to find themselves >taken unawares, suddenly panicking when they realise that what they are >watching amounts to a wholesale re-rating of the economic outlook. > >Yesterday's 80-point fall on the FTSE 100 to 6,199.2 took the cumulative >loss to almost 600 points since September 4. Reasons to be bearish are >stacking up: the long-running saga of the weak euro, the oil price and a >host of other nagging reminders that new technology in the new economy has >not abolished that old economy thing known as the business cycle. Yes, >corporate earnings are still highly vulnerable to the price of basic >commodities. > >On the oil front, the word from Washington yesterday was that Bill Clinton >may ride to the rescue by tapping emergency reserves stored in salt caverns >along the Gulf of Mexico. >In a market fretting about surges of demand during the winter, this helped >stabilise the price somewhat yesterday. After hitting a 10-year high of >nearly $38 a barrel on Wednesday, oil was nearly a dollar cheaper in early >afternoon trading. > >Calming the wider jitters about economic growth in the west will not happen >quickly. Much will depend on the details of President Clinton's plan - >specifically, how much extra oil and when? Opec promised 11 days ago to >boost production by 800,000 barrels a day - a move that is in theory >expected to help lower the price of crude to around $25 a barrel. >But the American move might backfire by souring relations with Opec, whose >members are due to meet in Caracus next week. >Before then, France has called for a special meeting between the oil >producers, the European Union and the US to thrash out an agreement to end >the crisis before the winter sets in. > >Yet all the talking might be in vain. The United Nations compensation >commission is due to rule on the long-standing claim for $16bn in war >reparations from Iraq next week. >There is a view that if Saddam is asked to pay too much he will retaliate by >turning off his crude tap - which at present is spewing 2.5m barrel per day >on to the world oil market. No wonder financial market nerves are a-jangle >BoS crescendo >A bid for Bank of Scotland has been the talk of Edinburgh's Georgian squares >ever since its audacious and hostile but ultimately ill-fated bid for >NatWest, almost a year ago. > >France, Russia, seek cuts in Iraqi war victim fund. >UNITED NATIONS, Sept 21 (Reuters) - France, backed by Russia and Tunisia, on >Thursday proposed a reduction in funds Baghdad pays to compensate victims of >its 1990 invasion of Kuwait, arguing more money could then go to food and >medicine. > >British and U.S. officials told reporters they would be willing to talk >about a possible cut, but not as large as the cut France had suggested. No >decision had been made yet on proposals to cut Iraq's contribution from 30 >percent to 20 percent of its oil revenues. > >However, James Cunningham, representing the U.S., indicated Washington was >not in favour. > >"We'll look at any idea for improving the humanitarian flow into Iraq to >deal with the problems the people are confronted with there," he said. "This >particular idea does not seem to meet that criteria there." > >At issue is the "oil-for-food" programme, which allows Iraq to sell >unlimited quantities of oil to buy food, medicine and other civilian >necessities to offset the impact of 10-year old sanctions on ordinary >Iraqis. The embargoes were imposed after the 1990 invasion of Kuwait. > >Under the current programme, 30 percent of the proceeds from the sale of >Iraqi oil is automatically siphoned off into the U.N.-administered >reparations fund. Other funds go to U.N. administration of the programme. > >On Thursday, French Ambassador Jean-David Levitte proposed reducing the >amount paid to the compensation fund to 20 percent of every dollar earned >from U.N.-supervised oil sales. > >Levitte made the proposal during a closed-door meeting of the 15-member >Security Council and was backed by Russia and Tunisia, diplomats attending >the session reported. >Russia previously had submitted a draft resolution on the subject to the >other four permanent members of the council - France, Britain, the United >States and China. > >But the council made no decision and none was expected until at least early >December, shortly before the current eighth six-month phase of the >oil-for-food programme ends. >Suggestions to lower the compensation percentage were made last year when >oil proceeds were so low the programme was having trouble getting enough >funds to buy humanitarian goods. >But with oil prices high now, U.S. officials questioned the proposal, which >comes as the council is trying to persuade Iraq to accept new U.N. weapons >inspections as a condition for having the sanctions eased. > >Iraq's foreign minister, Mohammed Saeed al-Sahaf, in a speech to the General >Assembly on Thursday, blasted the United States and Britain for maintaining >sanctions out of "selfish political aims." > >He said Iraq, since December 1996, had exported $31.6 billion worth of oil, >of which $9.5 went to the compensation fund and $1 billion for U.N. >administrative expenses. In comparison, he claimed only $8.3 billion in >goods had arrived in Iraq to date. >Russia's U.N. ambassador, Sergei Lavrov, first raised the compensation issue >in August in challenging a $21.5 billion claim by Kuwait for lost oil >production and sales during Iraq's seven-month occupation of the emirate in >1990. A panel of arbitrators has recommended awarding $15.9 billion. > >Kuwait's claim will be considered again when the commission's governing >council, which has the same 15-nation membership as the Security Council, >meets in Geneva next week. But a decision may be delayed again. > >Both Cunningham and British ambassador Sir Jeremy Greenstock told reporters >there were enough votes in Geneva, where permanent members do not have a >veto, to adopt the recommended $15.9 billion award. > >But they said they preferred consensus - meaning that the decision might be >delayed again because of objections from Russia, France, China and other >members. > >"We are very interested as everyone else is in a consensus to give the right >message on implementation on the whole programme on Iraq," Greenstock told >reporters. > >Britain objects to French flight to Iraq. >UNITED NATIONS, Sept 21 (Reuters) - Britain asked the Security Council's >sanctions committee late on Thursday to delay a French flight of about 80 >doctors, young artists and activists travelling from Paris to Baghdad. > >But the plane was expected to leave shortly for Iraq anyway, with French >diplomats saying passenger flights to Iraq were legal and did not violate >10-year-old sanctions, providing the cargo was inspected. > >Britain was responding to a letter from Dutch Ambassador Peter van Walsum, >chairman of the Security Council's Iraqi sanctions committee, requesting >that France hold up the flight until 1 p.m. (1700 GMT) on Friday so members >could respond. >A British spokeswoman said that "we put a hold on the flight, saying we are >not prepared to approve it unless we have more information that this is a >humanitarian flight." > >"On the basis of information we have so far, we have a problem," she said, >clarifying earlier remarks in which she said Britain had flatly objected to >the flight. > >France had notified the committee of the flight but did not ask its >permission. In a memorandum to the 15-member panel marked "urgent," van >Walsum said he was treating France's submission "as a request rather than a >notification." > >He admitted there were differing interpretations on whether the flight could >occur but he said he had to follow past practice and did "not feel at >liberty to adopt a different procedure." > >Russia on Sunday sent a planeload of humanitarian aid and a dozen oil >executives to Baghdad after seeking the committee's consent, although it >said that step was unnecessary because passenger flights were not banned >under 10-year-old U.N. sanctions. France has used the same argument. > >"We notify, we don't ask for an authorisation because this kind of flight is >not prohibited by sanctions," a French diplomat, speaking on condition of >anonymity, told Reuters. He said the aircraft would be inspected for any >banned goods. > >Russia and France want the sanctions - imposed when Iraq invaded Kuwait in >August 1990 - eased and eventually lifted. But they have adhered to them >over the past decade. >Earlier on Thursday, British Ambassador Sir Jeremy Greenstock told >reporters: "It is absolutely standard procedure that flights need to be >cleared by the committee." > >"If flights from abroad are not (submitted) to the sanctions committee, that >is a contravention," he said. > >The American representative, James Cunningham, agreed. "It would need to be >notified and approved by the sanctions committee the way the Russian flight >was," he said. > >No one is certain how far the United States and Britain will take the >dispute with France. France and Britain are European Union members. > >The EU in 1996 adopted regulations prohibiting aircraft from flying in and >out of an EU member country if it carries cargo or "if it is destined to >land in, or has taken off from, the territory of Iraq." > >The Friday flight is planned by a private French group opposed to the >sanctions. Its spokesman, Jihad Feghali, said a 184-seat Boeing 737 jet, >chartered from the Euralair-France airline, would carry some 25 doctors, >surgeons and nurses who would spend a few days helping Iraqi doctors. > >Young artists and members of a Paris roller-skating club would take part in >Iraq's Babylon Festival, he said. > >"They are young French people who want to meet young Iraqis and bring them a >message of joy," he said in Paris. > >An advance party travelled to Baghdad overland from Beirut, and the whole >party would drive to the Jordanian capital, Amman, next week to return to >France, Feghali said. > >Feghali said the flight, organised by an ad-hoc Council for Development and >Cooperation, would cost 2 million francs ($259,100) and was financed from >private funds. The passengers, he said, would be carrying only their >personal belongings. > >Russia's U.N. ambassador, Sergei Lavrov, argued on Tuesday that although >Moscow had obtained permission for its latest flight, it need not have done >so because there was no flight ban on passenger planes. > >At issue is resolution 687 following the 1991 Gulf War that spelled out >specifics on sanctions, first imposed when Iraqi troops invaded Kuwait in >August 1990. The resolution does not explicitly ban civilian aircraft but it >does bar commercial transactions. "It depends if you count flights as >economic activity. And we say they clearly are," a British official said. > > _______________________________________________________ KOMINFORM P.O. Box 66 00841 Helsinki - Finland +358-40-7177941, fax +358-9-7591081 e-mail [EMAIL PROTECTED] http://www.kominf.pp.fi _______________________________________________________ Kominform list for general information. 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