The Report
of the Iraq Inquiry
177.
Such an
approach would allow the US and UK “to agree to end purely
economic
sanctions
and to stop patrolling the southern NFZ without the requirement for
a
quid pro
quo from Saddam Hussein”. It would give the US and UK (rather than
Iraq)
sustained
control over the policy and address the threat of Iraqi aggression
and the
plight of
the Iraqi people. It was likely to entail some additional costs,
possible
including
the deployment of additional troops to the region.
178.
Mr Jon Day,
Chief of the Asessments Staff, responded to Mr McKane
questioning
whether the
draft note overstated the Iraqi threat to Kuwait: “The JIC has
judged
that Iraq
would not move against Kuwait while the West maintains substantial
forces
On 14
February, at the request of the FCO, the JIC provided an updated
assessment on
the erosion
of economic sanctions against Iraq.99
The JIC’s
Key Judgements included:
•
Saddam Hussein
faced “no economic
pressure to accept UNSCR 1284”
because he
was “successfully
undermining the economic sanctions
regime”.
•
Through “abuse
of the Oil-for-Food programme and smuggling of oil and
other
goods”,
Saddam Hussein would “be able to
appropriate in the region of
US$1.5bn to
US$1.8bn in cash and goods in 2001, slightly up on
2000”.
There was
scope for earning even more “if new surcharges, and
commissions
[on
contracts] became the accepted norm”.
•
“Iranian
interdiction
efforts” had “significantly
reduced smuggling” in the
Gulf
but Saddam
had “compensated by exploiting
land routes”.
•
The
“apparent success of the
… border trade agreement” had
“encouraged
other
front-line
states to respond
to Baghdad’s initiatives to improve economic
ties”.
Those states were “in the
fore-front of efforts to test the enforceability
of the
sanction regime”.
•
“Most
countries believe that economic sanctions on Iraq are
ineffective,
counterproductive
and should now be lifted. Without active
enforcement, the
economic
sanctions regime will continue to erode as the
front-line states
increase
their trade links with Iraq and as Saddam’s officials devise more
ways
to capture
the revenue from OFF [programme] oil sales.”
The JIC
assessed that, encouraged by the success of the Iraq/Turkey border
agreement,
there had
been a “significant increase in the erosion of sanctions over the
last six months”.
The JIC
estimated that, in 2001, oil smuggling could generate up to US$650m
and abuse
of the OFF
programme through bribes, surcharges and “commissions” up to
US$600m.
98
Minute Day
to McKane, 15 February 2001, ‘Iraq’.
99
JIC
Assessment, 14 February 2001, ‘Iraq: Economic Sanctions
Eroding’.
224