IRAQ SANCTIONS MONITOR Number 148
Thursday, November 2, 2000
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LATEST NEWS+++++LATEST

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LAUNCH OF THE BIG BEN TO BAGHDAD BUS FILM

The Arab Club of Britain announces the premiere showing of the film "Big Ben
to Baghdad".  The Epic journey through three continents, ten countries and
15,000 miles from London to Baghdad in an antique double-decker London
Routemaster bus.  The Mariam Appeal chairman George Galloway MP will be
joined by the veteran politician Tony Benn MP and Sabah Al-Mukhtar,
President of the Arab Lawyers Association for  debate following the film.

The film will be shown at the Brunei Theater at the School of Oriental and
African Studies SOAS, London at 630 p.m. on Thursday, 16th November, 2000.

Nearest Tube station is Russell Square, London WC1

Admission free but donations are welcome

FOLLOWING THE PREMIERE, VHS COPIES OF THE 60-MINUTE FILM WILL BE AVAILABLE
AT THE SPECIAL PRICE OF £9.99

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UN Seen Willing To Consider Iraq Oil Exports To Syria. 

NEW YORK -(Dow Jones. Nov 2)-Iraq's plan to reopen a long-shuttered pipeline
to export oil to Syria would need the permission of the U.N. Security
Council to go ahead, U.N. diplomats said Wednesday.

But they also said the Security Council has expressed a willingness to
consider new outlets for the export of Iraqi oil.
"We are not particularly concerned where the oil is pumped out, as long as
it is monitored by the U.N. and the money goes into the escrow account," a
Western diplomat said.

Iraq produces about 3 million barrels a day of oil, of which about 500,000
b/d is used in Iraq and most of the remainder exported through the
oil-for-food program. The Middle East Economic Survey reported Tuesday that
Iraq will export around 200,000 barrels a day of Basra Light crude through
the pipeline to Syria, probably beginning in mid-November. Syria in turn
would export an extra 200,000 barrels a day of Syrian Light and Suwaidiya
crude.

Under the U.N. oil-for-food program, Iraq is allowed to export as much oil
as it likes through two terminals: Mina al-Bakr in the Persian Gulf and
Ceyhan in Turkey. The revenues are held in an escrow account and used in
part to fund humanitarian aid. Iraq can't sell its oil outside the
oil-for-food program, diplomats said. "If (the Iraqi plan) goes ahead, it
would be a breach of sanctions unless authorized by the council," a diplomat
said.

Iraq hasn't sought the Security Council's authorization to reopen the
pipeline. The Sanctions Committee could discuss the Iraq-Syria pipeline
issue Friday, when it will meet to discuss a recent Syrian flight sent to
Baghdad without notifying the committee, diplomats said.

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Iraqi Oil Seeps Through To Turkey,Jordan

The Security Council, in a resolution passed last December, expressed its
willingness to allow "the use of additional export routes" for oil and oil
products sold through the oil-for-food program, another diplomat said.

The council has also allowed some Iraqi oil to seep out without explicit
approval. Iraq sells between 70,000 b/d and 90,000 b/d of crude oil to
Jordan in transactions tacitly approved by the Sanctions Committee. Jordan
relies on imports for its oil needs, and sanctions have cost the country
billions of dollars in lost revenue from trade with Iraq. In addition, about
70,000 barrels a day of petroleum products are smuggled into Turkey by Iraqi
Kurds, according to the U.S. Department of Energy.
But the committee is unlikely to extend tacit approval of oil sales to
Syria, which analysts said can't be justified on humanitarian grounds
because Syria is an oil exporter.

Nevertheless, the Security Council would be powerless to stop Iraq if it
went ahead. "It's not like there is a U.N. police to tell the Iraqis, 'No,
you can't do this,'" a diplomat said.
In recent months, Security Council members have increasingly called for an
easing of the sanctions imposed on Iraq nearly a decade ago.

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Jordan's PM visits Iraq to bolster diplomatic ties. 

Jordanian Prime Minister, Ali Abu Ragheb, and his delegation of Cabinet
Minsters and businessmen has arrived in Baghdad.
However, there was no confirmation on whether the Iraqi official had
obtained UN clearance for the flight.

The visit to the Iraqi capital - the first since the UN imposed its
international sanctions on Iraq a decade ago - is Jordan's attempt to boost
bilateral relations between the two countries.
One of the things to be discussed at the meeting will be on securing
Baghdad's agreement to renew an annual oil deal worth at least US$700
million this year. Also high on the agenda of talks is rehabilitating a
750km oil pipeline stretching from Haditha oil field in western Iraq to the
Zarqa oil refinery, 27km northeast of Amman, Jordanian officials said.

Iraq, which imports more than $350 million worth of manufactured goods
annually, is Jordan's main client.
While Jordan had turned its back against Iraq after the Gulf crisis, it is
now keen to see UN sanctions on Iraq being lifted.

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MOSCOW CRITICIZES BOMBING OF IRAQ. 
MOSCOW. Nov 1 (Interfax) - Moscow has again sharply criticized the bombing
of Iraqi territory in the so-called no-fly zones by U.S. and British
aviation.

"There is neither legal nor ethical justification for these actions and they
seriously complicate the solution of the Iraqi problem," reads a Russian
Foreign Ministry release obtained by Interfax on Wednesday.

The bombings "also create an unacceptable 'background of force' for settling
other regional crisis situations that have exacerbated recently," the
document reads.

The air strikes were delivered on October 29 "and were again aimed against
civil objects in the vicinity of Basra," the release reads. Two civilians
were killed and one injured as a result of the bombing, the document says.

The Russian Foreign Ministry views this action as "another gross violation
of the basic norms of international law, as the 'no-fly' zones were
established arbitrarily outside the U.N. Security Council's resolution."

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Fighting foxy Saddam and his proxy war. 

IRAQ will start using the euro instead of the US dollar soon as its main
source of hard cash through the United Nations-approved oil-for-food
programme, which allows the country to sell its oil as long as most of the
proceeds go to meet the basic needs of its citizens.

For the beleaguered euro, which has suffered a 30 per cent fall since
January 1999, this is a welcome respite since the Iraqi switch could boost
demand for the euro by up to two billion, offsetting some of the outflow of
direct investments that has affected the European currency. Iraq's move was
intended as a snub to the United States and its Middle East policies, but
its threat to halt exports if its proposal wasn't accepted had supported the
oil market, which had been weakening ahead of Opec's release of extra oil.
Baghdad currently sells about US$60 million (S$106 million) of crude a day,
about 5 per cent of the world's oil exports.

Iraqi Trade Minister Mohammed Mehdi Saleh said that Iraq's trade with
countries using the common European currency will increase significantly
with the changeover. He did not foresee any disruption of Iraqi exports of
nearly 2.3 million barrels a day. Euro zone states already account for 40
per cent of Iraq's multibillion dollar external trade.

Clearly, Iraq hopes some other Arab nations might follow suit if the scheme
works. President Saddam Hussein needs no lessons in how to dabble in oil
politics. He knows full well that power in the Middle East flows from the
oil barrel. He cannot help but like a supply crisis. The latest manoeuvre is
a tactic in Iraq's long-running strategy to make the most of its oil
resources and its hopes of dominating the region, a quest that began even
before Saddam.

This is the seventh shock that has hit consumers in the post-war years, but
not all of them were of Iraq's making. For instance, Iraq boycotted the Arab
Oil Congress in Cairo in 1959 because it did not want Egypt's Gamal Abdul
Nasser to have a say over oil matters and the region. Baghdad ignored the
call for an oil embargo in 1973 that changed the dynamics of the world
energy market because it did not support the soft option against America,
which it sees as the ultimate protector of Israel. Indeed, it sold more oil
then.

This time, Saddam is playing his cards differently. The US oil market is so
tight and oil is a hotly contested issue at the presidential elections.
Moreover, the US today gets 57 per cent of its oil from abroad. How could
Baghdad pass up such an opportunity? Thus the current Middle East crisis
suits Baghdad. Israeli control of Jerusalem is an emotional issue for all
Arabs. Clearly, Iraq wants to galvanise Arabs to settle the score with
Israel by force. Saddam even matched his verbal threats against Israel with
histrionics when he moved some troops to the Syrian and Jordanian borders
recently as Israeli tanks moved into Palestinian areas.

It doesn't matter that Iraq will not be anywhere near the frontline but such
actions have a lot of mass appeal among the Arab people now and the oil
market will keep an ear cocked for the shots.

Under sanctions imposed after the Kuwait invasion, the US and UK have been
bombing northern Iraq on and off. But the sanctions are losing their bite.
Already, three dozen flights have landed in Baghdad, breaching the UN
strictures. Three of the permanent Security Council members now sympathise
with Iraq. While thumbing its nose at Washington, Iraq has seen its actions
help boost oil prices in the speculative market. For a commodity that goes
through a shortage-and-glut cycle periodically, any producer will have to
make money when the market is tight. Anything that helps fetch the extra
income is handy.

Thus every other oil producer benefits from Saddam's strategy. Any stoppage
of Iraqi exports of 2.3 million barrels would send prices through the roof.
And high oil prices shake confidence and spook financial markets.

All these bring us to another question. Perhaps the US needs to rethink its
policies in the region. It should not take for granted that oil supplies can
be ensured with military might and by playing one producer against the
other, particularly when the issue is so close to the Arabs' heart. The US
should note that Iraq was invited to the recent Arab summit. Consumer groups
in Egypt are boycotting US multinational products. Saudi defence minister
Prince Sultan attacked a US Congress resolution condemning the Palestinians
for encouraging the eruption of violence during the past month. Crown Prince
Abdullah castigated its ally twice in recent days for its support to Israel.
Saddam Hussein is not giving up his proxy war.

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Iraq Submits Nov Oil Price Formula To UN - Source. 
NEW YORK -(Dow Jones)-Iraq on Wednesday submitted its November oil price
formula to the United Nations, a diplomatic source at the U.N. said
Wednesday.
No further details were immediately available.

Iraq's State Oil Marketing Organization, the state oil export agency,
typically submits its proposed oil prices about two weeks before they take
effect. But SOMO apparently held off on proposing November oil prices before
the United Nations acted on Iraq's demand that oil exports be paid in euros
rather than dollars.

Iraq had threatened to cut off its oil exports by Wednesday if the U.N.
failed to approve its demand, but Iraq later gave the U.N. until next Monday
to implement the plan.
The Security Council Sanctions Committee agreed Monday to let the plan go
through after its 15 members, notably the U.S. and Britain, concluded that
they could not legally block it.
Iraq exports oil under the U.N. supervised oil-for-food program. Proceeds
from the sale of oil are kept in an escrow account at BNP Paribas in New
York.

A report by the U.N. Treasury released last week found that converting the
account into euros would cost the oil-for-food program millions of dollars
in lost interest earnings and hedging and conversion costs.
-By Masood Farivar, Dow Jones Newswires, 201-938-2094,
[EMAIL PROTECTED]

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Jordan premier meets Iraqi vice-president. 
Vice-President Taha Yasin Ramadan held talks with Jordanian Prime Minister
Ali Abu-al-Raghib on Wednesday, Iraqi TV reported.

Ramadan and Abu-al-Raghib "voiced their satisfaction with the growth and
development of bilateral cooperation. They emphasized their intention to
activate the work of the Iraqi-Jordanian joint higher committee and increase
meetings between officials in the two fraternal countries", it said.

The Iraqi-Jordanian joint higher committee began a series of meetings at the
Foreign Ministry in Baghdad.

Speaking on Jordanian TV, Abu-al-Raghib said his visit represented "the
policy of Jordan to support our brothers in Iraq". "We believe that there is
a lot of common interest between Jordan and Iraq that we should work towards
achieving."

Iraqi Deputy Prime Minister Tariq Aziz hailed the visit as a breakthrough in
Jordanian-Iraqi relations, Jordanian TV said.

It said the Jordanian delegation would focus on ways to enhance trade
between the two countries and the supply of Iraqi oil to the kingdom.

Abu-al-Raghib said on the TV the two sides would work to increase bilateral
trade. "We feel strongly that the sanctions on Iraq should be lifted, and
this is also one of the political issues that we will discuss."

Iraqi officials said plans had been completed for the construction of an oil
pipeline to Jordan.

Abu-al-Raghib is scheduled to meet Iraqi President Saddam Husayn on
Thursday, which will be their second meeting in three years.

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British minister warns Iraq not to act on threats. 

British Foreign Office Minister Peter Hain said during a visit to Kuwait on
Wednesday that Iraq stood to be "hit very hard" if it acted on threats
against Kuwait, the Kuwaiti news agency Kuna reported.

"We will meet any of these threats very fiercely if anyone from the Iraqi
government is so stupid as to take any action," he said at a news conference
at the British Embassy.

"There is no let-up in Britain's resolve to protect Kuwait and ensure Iraq's
compliance with UN Security Council resolutions."

British forces were on a "constant state of alert", Hain added.
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US oil pumps higher on gasoline stock draws, Iraq concerns. 

NEW YORK, Nov 1 (Reuters) - U.S. oil prices surged on Wednesday after the
Energy Department's weekly stocks confirmed industry data that gasoline
stocks plunged last week and as OPEC producer Iraq raised market concerns
about its proposed supplying of oil to Syria.

Crude futures on the New York Mercantile Exchange (NYMEX) ended 55 cents
higher at $33.25 per barrel. Gasoline futures soared some 0.81 cent to 88.40
cents a gallon.

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STATE MINISTER TOSKAY OPENS TURKISH STAND IN 33TH INTERNATIONAL BAGHDAD
FAIR. 

BAGHDAD, Nov 1 (A.A) - State Minister Tunca Toskay opened on Wednesday
Turkish stand in the 33th International Baghdad Fair.

After he had opened the Turkish stand, Toskay visited all the stands and
received information. When journalists reminded him the statements that the
Iraqi Vice-President Taha Yassin Ramadan made to Turkish journalists on
Tuesday, Toskay said that the Incirlik Base was not brought to the agenda of
the contacts and that the economic issues were discussed in the meetings.

Toskay said, "Iraqi Public Works Minister and I discussed the opening of a
second border gate other than the Habur Border Gate. We worked on a map. I
read full text of the statement of Taha Yassin Ramadan regarding the
internal affairs. There is not such thing. We have marked concrete
developments on the issues we discussed."

Sources said that Turkey and Iraq signed a letter of intention for the sale
of eight locomotives and 600 wagons to Iraq and for the rehabilitation of 85
locomotives.

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Jordanian premier comments on his talks in Baghdad. 

Text of report in English by Jordanian TV on 1st November

In what was described as the landmark visit by a high-ranking Arab official
to Iraq since 1990, Prime Minister Ali Abu-al-Raghib arrived in Baghdad this
afternoon on a direct flight from Amman, the second such Jordanian move to
break the UN air embargo enforced on the country.

Premier Abu-al-Raghib - heading an official delegation of six ministers,
parliamentarians, senators, unionists, as well as members of the private
sector - is scheduled to attend the meetings of the Jordanian-Iraqi Higher
Committee that has not convened since 1989.

[Abu-al-Raghib - recording] My visit represents the policy of Jordan to
support our brothers in Iraq. It relates to the old historical relationship,
and we believe that there is a lot of common interest between Jordan and
Iraq that we should work towards achieving. We will deal with all political,
economic, and social issues. And my visit, hopefully, will result in good
results for both Iraq and Jordan. [End of recording]

Iraqi Deputy Prime Minister Tariq Aziz hailed the visit as a breakthrough in
the Jordanian-Iraqi relations, saying that despite the sanctions imposed on
Iraq, Jordan has always maintained strong relations with Baghdad.

[Aziz - recording] Well, first of all we welcome the visit of Dr
Abu-al-Raghib, the prime minister of Jordan, to Baghdad. It is quite normal
for him to be in his second country. As you know, the relations between Iraq
and Jordan have always been cordial and sisterly, and strong in all
respects. Of course, this visit and the way it comes has special
significance in the present circumstances. And I think the dimension of the
visit is that it is going to not only strengthen the relations, which are
already good, but it will also approach a number of areas to expand
relations for the best interests of the two countries. [End of recording]

Abu-al-Raghib is carrying a message from His Majesty King Abdallah to Iraqi
President Saddam Husayn dealing with the current Arab issues and cooperation
between Iraq and Jordan.

Among discussion topics on bilateral relations, the Jordanian delegation
will focus on ways to enhance trade between the two countries and the supply
of Iraqi oil to the kingdom. Iraq has repeatedly requested that Jordan
drastically increase the 300-million-dollar trade protocol, a demand that
was rejected by the Central Bank of Jordan because it could affect its
foreign reserves. However, Abu-al-Raghib pointed out that a revision of that
protocol is going to be discussed, expecting an increase in its volume.

[Abu-al-Raghib - recording] Yes, it will be an agenda to discuss all issues
also pertaining to the protocol and other issues. We will work towards
having more volume of trade between Jordan and Iraq, and to discuss all
various other sectors where we can cooperate together. We feel strongly that
the sanctions on Iraq should be lifted, and this is also one of the
political issues that we will discuss.

[Correspondent] Is there any intention of starting like direct flights from
Jordan to Iraq in the near future?

[Abu-al-Raghib] We are working towards this purpose. Hopefully, we will do
it in the near future. [End of recording]

Later in the evening, Premier Abu-al-Raghib held talks with President Taha
Yasin Ramadan on bilateral relations on both the economic and political
fronts. During the meeting, Iraqi officials emphasized that plans for the
construction of a proposed oil pipeline to Jordan that would lay in the
Iraqi territory had been completed. The two countries have signed a
preliminary agreement to set up the pipeline in 1998.

The visit of Prime Minister Ali Abu-al-Raghib has far exceeded the
humanitarian dimension and is described as a political move to enhance
economic relations between Jordan and Iraq. Premier Abu-al-Raghib is
scheduled to meet Iraqi President Saddam Husayn tomorrow, which is going to
be the second meeting in three years. Abu-al-Raghib has met President Saddam
in 1997 in his capacity as the minister of trade and industry.

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Egypt to Sign Trade Pacts with Iran, Iraq. 

CAIRO, November 1 (Xinhua) - Egypt will send trade delegations to Iran and
Iraq later this month to sign economic and trade cooperation agreements with
the two countries, the official Middle East News Agency reported on
Wednesday.

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Tariq Aziz confers with Russian Duma delegation. 
Text of report by Iraqi TV on 1st November

Deputy Prime Minister Tariq Aziz received Russian Duma delegation under Duma
Deputy Speaker Romanov and a number of Duma members representing various
political blocs. They arrived in Baghdad aboard the Russian solidarity
plane, which landed at Saddam International Airport on 31st October.

Tariq Aziz expressed appreciation for the stands of the friends at the Duma
and the stands of the Russian leaders and people in support of Iraq's fair
cause. He also stressed Iraq's pride in the historical relations of
friendship binding Iraq and Russia. He also stressed the desire to promote
these relations in all fields in the service of our friendly countries and
peoples.

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Iraq says three people injured in US-British air attack on 1st November. 
Text of report by Iraqi TV on 1st November

The evil US and British ravens continued their treacherous armed aggression
against our steadfast country, backed by the treasonous and agent regimes of
Saudi Arabia and Kuwait, expressing their animosity towards the people of
great Iraq and the glorious Arab nation. This sinful aggression resulted in
the injury of three citizens in the Ninawa Governorate.

In a statement to the Iraqi News Agency, a spokesman for the Air Defence
Command said that at 0925 [0625 gmt] on 1st November 2000, the evil US and
British ravens violated our airspace from Kuwaiti and Saudi airspace, with
direct support from the ruling regimes in Saudi Arabia and Kuwait. The
ravens conducted 42 combat sorties from Saudi airspace and six combat
sorties from Kuwaiti airspace. An AWACS plane flying in Saudi airspace and
an A2-C plane flying in Kuwait airspace backed them. They flew over areas in
Basra, Dhi Qar, Maysan, Al-Muthanna, Al-Qadisiyah, Wasit, and Al-Najaf. Our
heroic missile force and valiant ground defences confronted them and forced
them to leave our airspace to the bases of treason in Saudi Arabia and
Kuwait.

The spokesman added: With this, the total number of combat sorties conducted
by the ravens since the Day of Conquest on 17th December 1998 reached 13,680
from the Saudi airspace and 7,376 combat sorties from the Kuwaiti airspace.

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Iraq says pipeline with Syria ready in three days. 
BAGHDAD, Nov 1 (Reuters) - Iraq said on Wednesday an Iraqi-Syrian pipeline,
closed since 1982, would be ready for the export of crude oil through it in
two to three days.

"There is no any problem, all executive procedures (to get the pipeline
ready for reopening) will be completed in two to three days," Iraq's Oil
Minister Amir Muhammed Rasheed told reporters during the opening of a
Baghdad trade fair.
Syrian Minister of State Ihsan Shraitih who is visiting Iraq to attend the
trade fair said: "I think any step which would bring the two countries
closer we would not hesitate to do."

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Saddam addresses cabinet on Palestinian intifadah. 
Iraqi President Saddam Husayn has accused the Western media of distorting
the facts about the Palestinian intifadah. In an address to the cabinet, he
said that such media "lies", particularly about Iraq, have been exposed as
more and more people have come to Baghdad to see the situation for
themselves. "The great state of jihad is rising continuously in the Arab
homeland," he said, calling on all Arab leaders to join the struggle in
support of the Palestinians. 

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Iraq wants Syria deal outside UN exchange-source. 
DUBAI, Nov 1 (Reuters) - Iraq wants to conduct its proposed oil sales to
Syria outside the terms of the U.N. oil-for-food exchange, an industry
source said.

"For Iraq, this would be like the border trade being conducted with Turkey,"
the source said, referring to oil trade Iraq is allowed to conduct with
neighbours Jordan and Turkey outside the terms of the U.N. humanitarian oil
exchange.

"That means it would fall outside of the oil for food deal and Iraq 
would not need U.N. approval," the source.
Iraq said on Wednesday an Iraqi-Syrian pipeline, closed since 1982, would be
ready for the export of crude oil through it in two to three days.

___________________________________________________

Aircraft leaves Dublin with aid for Iraq. 

The first flight from Ireland to Iraq since the Gulf War left Dublin Airport
yesterday with humanitarian aid.
Mr Niall Andrews MEP was on board the light aircraft, loaded with medicines
and food, which was to travel through the Iraqi no-fly zone. The zone was
imposed by the UN as part of sanctions after the war. Mr Andrews said the
trip to Baghdad was a symbolic one in solidarity with 22 million Iraqis who
have suffered under the sanctions imposed in 1990 after Iraq invaded Kuwait.

Information from the International Red Cross showed that infant mortality
had doubled in Iraq since the war, unemployment had risen to 60 per cent, a
third of children were malnourished and 500,000 children had died since
1990. "This is a humanitarian mission, but the underlying political message
is that new structures and a new accommodation must be put in place before
the human suffering in Iraq reaches even more calamitous heights," he added.

Baghdad's Saddam International Airport reopened last August, and many Arab
countries as well as Russia and France have dispatched aircraft to test the
UN embargo, arguing that it does not cover humanitarian aid. Mr Andrews said
the flight which left Dublin yesterday was important because there was a
moral obligation to send a strong message of solidarity.

"It is the most vulnerable in Iraqi society who have been hit most in recent
years," he said. He said he had complied with the legal requirement to give
the UN Sanctions Committee on Iraq 48 hours' notice of his intention to
oversee the flight. It is understood that both flight and supplies were
funded by an Irish businessman.

Four other aircraft touched down in Baghdad yesterday, bringing delegates
from Russia, Lebanon and Turkey for the Baghdad Trade Fair, the official INA
news agency said. Iraq has attracted record participation for the fair, with
1,554 companies from 45 countries taking part. 

__________________________________________________

Baghdad International Fair Opens. 

BAGHDAD, November 1 (Xinhua) - The 33rd Baghdad International Fair, the
largest ever since 1990, opened in central capital on Wednesday morning.
Vice President Taha Yassin Ramadan, 15 Iraqi government ministers, 13
ministers from Arab and other countries and foreign diplomatic envoys to
Iraq attended the grand opening ceremony.

In his opening speech, Ramadan extended his warm welcome to the
distinguished foreign guests who came to attend the fair, and expressed the
hope that the fair will serve to promote relations, especially trade ties,
between Iraq and countries all over the world.

Despite the U.N. sanctions, many countries are keen to develop relations
with Iraq, as it can be seen in the fact that a total of 1,554 companies
from 45 Asian, European, African countries participated in the fair, Ramadan
said.

__________________________________________________

Iraq eroding sanctions as West distracted. 

LONDON, Nov 1 (Reuters) - Iraq is gradually eroding United Nations economic
sanctions while the West is distracted by the U.S. presidential election and
the Israeli-Palestinian crisis, Western analysts say.

But despite the crumbling of a decade-old air embargo and growing Arab,
Russian and Chinese interest in re-engaging with Iraq, the core sanctions
imposed after President Saddam Hussein invaded Kuwait in 1990 remain in
force and only a U.N. Security Council decision can remove them.

For the moment, Saddam still cannot control the vast majority of Iraq's oil
revenues, which remain under U.N. supervision, cannot implement new oil
deals and cannot import goods other than food and medicine.

"Sanctions are not dead. They will have to be formally lifted before the
main players will sign and implement major contracts with Iraq," said
Rosemary Hollis of Britain's Royal Institute of International Affairs.

But she said international support for sanctions was likely to erode further
during the long hiatus before a new U.S. administration takes office in
January and reviews Iraq policy, especially if Republican candidate George
W. Bush wins.
"It could well be that a new administration is forced to address the Middle
East early because of the Israeli-Palestinian crisis. But Iraq is likely to
be much further down the agenda," Hollis said.

Gilles Andreani, a former French official at the International Institute for
Strategic Studies, said European countries were keen to lift sanctions but
still wanted to force Iraq to comply with U.N. resolutions aimed at ridding
it of weapons of mass destruction.

Saddam has adamantly rejected any return of U.N. weapons inspectors,
expelled in 1998 when the United States and Britain launched four days of
air strikes to punish Iraq for obstructing the monitors' work.

Experts say Saddam has cleverly exploited a political vacuum in the run-up
to the U.S. election campaign to chip away at the edge of sanctions. Despite
Republican campaign rhetoric about a more aggressive policy to remove
Saddam, including possible open-ended bombing, Andreani said a new U.S.
administration would have more pressing problems than Iraq and would put the
issue on the back-burner.

Iraq has attracted a growing stream of "humanitarian" flights to Baghdad,
agreed regular charter flights with Russia and is about to resume domestic
civilian flights. Anxious to avoid another Iraq crisis that would remind
American voters that Saddam was still in power at the end of Bill Clinton's
eight-year presidency, the United States has turned a blind eye to the
violation of a flight ban and two "no fly" zones imposed by Western powers
after the 1991 Gulf War.

Iraq announced on Monday it would start sending civilian domestic flights
into both "no fly" zones from next weekend, prompting the United States and
Britain to say they would only enforce the ban against military flights.

On Tuesday alone, seven foreign planes landed in Baghdad, bringing officials
and business delegations to attend a trade fair intended to defy and
gradually break down sanctions.
Among those represented are European Union member Ireland, key U.S. Middle
East ally Turkey, pro-western Jordan and the United Arab Emirates.

Politicians and officials from many Arab states, keen to distance themselves
from the United States and its perceived bias towards Israel during the
current wave of violence in the Palestinian territories, are flocking to
Baghdad. U.S. officials blame Russia and France, two permanent members of
the U.N. Security Council, for encouraging Baghdad's growing defiance of
sanctions.

Russia has sent a delegation with 50 members of parliament plus businessmen
to the trade fair. Russian and Chinese oil companies are vying to clinch
deals with Baghdad before Western competitors held back by sanctions grab
the business.


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