Global Policy Forum

The United States has approached U.N. Security Council members on its new Iraqi sanctions policy, aimed at freeing Baghdad's civilian economy but keeping key financial controls in place, diplomats said.

A Washington memorandum given to the other four permanent council members -- Britain, France, Russia and China -- includes many of the proposals disclosed earlier this year by Bush administration officials, which seek to restore fraying international support for banning arms-related materials. Some of the measures will be incorporated into a British-drafted resolution, expected to be circulated next week to all 15 council members, in time for a new six-month phase of the oil-for-food program, which begins on June 4, diplomats said on Tuesday.

That plan, instituted in late 1996, allows Iraq to sell unlimited amounts of oil, with proceeds put in a U.N. escrow account. The funds are then used to purchase food, medicine and other goods Baghdad has ordered to ease the impact of the sanctions, imposed in August 1990 after Iraq invaded Kuwait. But the United States has no intention of relinquishing the escrow account, which means Iraqi contracts for supplies probably will still move through the United Nations machinery, albeit at a faster place, the envoys said.

Nevertheless, Washington wants to shift gears and wind down parts of the oil-for-food program so civilian goods go to Iraq without approval by a council sanctions committee except for ``dual use'' items that also can be used for weapons. Agreeing on such a list is expected to be a point of contention, the diplomats said. Currently, more than $3 billion worth of contracts are blocked, most of them by the United States, some because of faulty paperwork, others because of possible dual-use purposes.

The United States and Britain have been at odds for years with France, Russia and China, which want the embargoes suspended. Although the new U.S. positions do not go far enough for nations sympathetic to Iraq, French foreign ministry officials have indicated they liked the approach but needed to see details. Russia is expected to have the toughest stand. The new U.S. proposals would also forbid foreign investments and loans to Iraq, once considered in council resolutions, except those already approved for upgrading Baghdad's oil industry, the diplomats said.

COOPERATION NEEDED FROM IRAQ'S NEIGHBORS

But council sources said a big question was whether Iraq's neighbors could be persuaded to cooperate. Among the ideas floated by the United States is for countries in the region to police their borders with Iraq and, in return, receive some discounted pricing for Iraqi oil.

Such measures, however, are not expected to be spelled out in the initial draft resolution. In response, Iraq's deputy prime minister, Tareq Aziz warned on Monday Baghdad would halt oil exports to Jordan and Turkey if they cooperated with U.S. sanctions plans. ``We will close the pipelines, stop the trucks and there will be no trade,'' he said, according to extracts of his speech broadcast on Iraqi television.

Calling again for a lifting of sanctions against Iraq, Jordan denied it was in collusion with the United States, according to the newspaper al-Arab al-Yawn on Tuesday. Wasef Azzar, the minister of trade and industry, was quoted as saying there was no ``Jordanian-U.S. committee'' in charge of enforcing the sanctions and Amman wanted the blockade imposed on Iraq lifted rather than replaced with other embargoes.

The diplomats said that if council members could not agree on a text of a resolution this month, the oil-for-food program would be extended on the same terms while talks continued.

A key requirement in post-Gulf War resolutions for lifting the sanctions is for arms inspections to resume to determine if Iraq still has weapons of mass destruction. Baghdad has rejected inspections since U.S.-British bombing raids in December 1998.