Global Policy Forum

By Ian Traynor

Russia yesterday threatened to wield its veto in the United Nations to torpedo US and British plans to introduce a new "smart sanctions" regime against Iraq.

After writing a letter at the weekend to the US secretary of state, Colin Powell, detailing its objections, the Russian foreign ministry lodged a fresh protest last night, linking the issues of continued US-British bombing and no-fly zones over Iraq to the current sanctions negotiations in New York.

Commercial considerations appear to be partly behind the Russian threats to block the proposed resolution negotiated in the UN security council, where Russia has a veto.

Earlier this week a meeting of executives from Russian oil and gas companies with billions of pounds of business at stake in Iraq called on the Kremlin, the Russian government and its parliament to thwart the proposals. Igor Ivanov, the Russian foreign minister, told Mr Powell that Russia would be damaging its own commercial links with

Baghdad if it gave the green light to the smart sanctions. Moscow says $5.5bn (£3.9bn) of Iraqi oil supplies to Russian companies are at stake, and more than $2bn in business contracts could suffer.

It also says that the resolution could trigger a "humanitarian catastrophe" at a time when the UN and Baghdad should be pursuing a "constructive dialogue" to launch more UN humanitarian operations in Iraq. Undeterred by the Russian threat, Britain said yesterday that it would press ahead with refining its proposals.

"We don't see it as a lost cause," a Foreign Office spokesman said. "We'll continue to work for agreement on the details of the new approach right up to July 4" when the current phase of the oil-for-food programme expires.

Russia, British officials point out, voted in favour of the key principles of the new sanctions regime in a security council resolution adopted unanimously four weeks ago. The Foreign Office spokesman said that elsewhere there was "extensive support" for the proposals. The EU has called on the council to adopt them as soon as possible.

France, a security council member with veto powers which has been sympathetic towards Iraq, has declared its support, though it wants a further relaxation of sanctions to allow foreign investment in Iraq's oil industry. Britain has included some French proposals in its draft resolution, including one allowing Iraqi airliners, impounded abroad since the invasion of Kuwait, to return to Iraq.

Other concessions would allow Iraq to pay its UN subscription from the oil-for-food account and "address the problem" of Iraq's oil surcharges, illegal under the current rules. Britain's ambassador to the UN, Sir Jeremy Greenstock, described Russia's alternative proposals, which seek to change the terms for lifting sanctions, as "disturbing". "None of us, on this issue in particular, can allow national economic self-interest to hold up positive measures for the Iraqi people," he said.

Iraq's deputy prime minister, Tariq Aziz, said yesterday that "prospects for passing the draft resolution are weakening, if not reaching a deadlock", while its vice-president, Taha Yassin Ramadan, praised Russia for "standing with its friends against imperialist schemes".