Iraq Survey Group Final Report
Regime Finance and Procurement
| Regime Finance and Procurement | |||
|---|---|---|---|
| A Word on the Scope of This Chapter | 1 | ||
| Key Findings | 3 | ||
| Chapter Summary | 7 | ||
| The Regime Timeline | 9 | ||
| Ambition (1980-91 | 9 | ||
| Decline (1991-96) | 9 | ||
| Recovery (1996-98) | 9 | ||
| Transition and Miscalculation (1999-2003) | 10 | ||
| Directing and Budgeting Iraq's Illicit Procurement | 11 | ||
| Overview | 11 | ||
| President and Presidential Secretary's Role in Illicit Procurement | 11 | ||
| Presidential Diwan's Role in Illicit Procurement | 12 | ||
| Diwan's Role in Supplemental Funding of Government Ministries | 12 | ||
| Extent of Knowledge of the Former President of the Diwan | 13 | ||
| Budgeting Iraqi Procurement | 14 | ||
| General Government Budget | 14 | ||
| Sources of Government Revenue | 14 | ||
| Supplemental Budgetary Process | 14 | ||
| Supplemental Budget Submission Procedure | 14 | ||
| Approval and Authorization of Supplemental Funding | 16 | ||
| Disbursal of Supplemental Funds | 18 | ||
| Financing Iraq's Illicit Procurement | 19 | ||
| Overview | 19 | ||
| Iraqi Economy's Role in Illicit Procurement | 19 | ||
| Economic Ambition (1980-91) | 19 | ||
| Economic Decline (1991-96) | 21 | ||
| Economic Recovery (1997-99) | 22 | ||
| Economic Transition and Miscalculation (1999-2003) | 22 | ||
| Iraq's Revenue Sources | 22 | ||
| Bilateral Trade Protocols | 24 | ||
| Phases of the UN OFF Program | 28 | ||
| Disposition of UN OFF Funds | 28 | ||
| Oil Voucher Process | 29 | ||
| Secret Voucher Recipients | 30 | ||
| Iraqi Oil Vouchers Provided to International Leaders | 31 | ||
| American and British Oil Voucher Recipients | 33 | ||
| Benon Sevan's Use of Iraqi Oil Vouchers | 33 | ||
| Iraqi Intelligence Service Nominations for Oil Vouchers | 33 | ||
| Oil Export Surcharges | 33 | ||
| How Surcharges Were Collected | 35 | ||
| Kickbacks on Commercial Goods Import Contracts | 35 | ||
| Private-Sector Oil Sales | 37 | ||
| Role of the SOMO | 38 | ||
| SOMO's Relationship to the MoO | 40 | ||
| Official Oil Accounts | 40 | ||
| Banking and the Transfer of Financial Assets for Procurement | 45 | ||
| CBI | 45 | ||
| CBI's Role in Licensing Money Exchangers | 45 | ||
| CBI's Role in Tracking Foreign Accounts for Iraq | 46 | ||
| Iraqi Bank Holdings | 47 | ||
| Funding of the Ministries | 47 | ||
| The Use of Foreign Banks | 48 | ||
| Use of Banks in Lebanon | 49 | ||
| Use of Banks in Jordan | 49 | ||
| Use of Banks in Syria | 50 | ||
| Use of Banks in Turkey | 50 | ||
| Use of Banks in Egypt | 50 | ||
| Use of Banks in Belarus | 50 | ||
| Regime Attempts To Recover Funds Prior to OIF | 51 | ||
| The Role of Cash Transactions | 51 | ||
| Iraq's Gold Reserves | 51 | ||
| Executing Illicit Procurement in Iraq: Ministries, Commissions, and Front Companies | 53 | ||
| Overview | 53 | ||
| Ministry of Foreign Affairs | 53 | ||
| MFA-IIS Connections | 54 | ||
| MFA's UN Sanctions Counter-Strategy | 55 | ||
| MFA and Iraq's Bilateral Protocols | 56 | ||
| Ministry of Trade | 56 | ||
| MoT's Role in Procurement | 57 | ||
| Facilitating Illicit Procurement With Cover Contracts | 58 | ||
| Facilitating Illicit Trade Through Commercial Attaches | 58 | ||
| Ministry of Defense | 61 | ||
| MoD Procurement Leadership | 61 | ||
| MoD Procurement Directorates | 61 | ||
| Budgeting and Financing Military Procurement | 62 | ||
| MoD Procurement Process | 63 | ||
| Procurement for the Republican Guard and Special Republican Guard | 64 | ||
| Military Industrialization Commission | 65 | ||
| Procurement Leadership in the MIC | 65 | ||
| MIC: Benefi ciary of Illicit Funds | 66 | ||
| MIC Banking and Financing | 66 | ||
| Items Procured via the MIC's Link to Iraqi Intelligence | 69 | ||
| MIC Front Companies | 72 | ||
| Iraqi Intelligence Service | 77 | ||
| IIS Procurement Leadership and Mission | 77 | ||
| IIS Procurement Cooperation with Foreign Intelligence Services | 79 | ||
| Items Procured by the IIS | 79 | ||
| IIS Front Companies | 80 | ||
| Special Security Organization | 82 | ||
| SSO Procurement Leadership and Mission | 82 | ||
| Iraqi Atomic Energy Commission | 82 | ||
| Ministry of Transport and Communication | 83 | ||
| Mission and Key Procurement Companies under the MoTC | 83 | ||
| Ministry of Higher Education and Scientific Research | 84 | ||
| University Collaboration With MIC | 84 | ||
| Exploitation of Academic Exchanges for Procurement | 85 | ||
| Ministry of Agriculture | 85 | ||
| Ministry of Interior | 86 | ||
| Front Company Conglomerates: Al-Eman and Al-Handal | 86 | ||
| The Al-Eman Network | 88 | ||
| Al-Handal General Trading Company | 90 | ||
| Supplying Iraq With Prohibited Commodities | 93 | ||
| Overview | 93 | ||
| Procurement Suppliers During the Decline Phase, 1991 to 1996 | 93 | ||
| Romania | 93 | ||
| Ukraine | 95 | ||
| Jordan | 100 | ||
| Procurement Suppliers During the Recovery Phase, 1996 to 1998 | 102 | ||
| Syria | 102 | ||
| Turkey | 104 | ||
| South Korea | 107 | ||
| People's Republic of China | 108 | ||
| France | 111 | ||
| Former Federal Republic of Yugoslavia | 112 | ||
| Bulgaria | 113 | ||
| Procurement Suppliers in the Transition and Miscalculation Phases, 1998 to 2003 | 116 | ||
| Russia | 116 | ||
| North Korea | 119 | ||
| Transportation Routes From North Korea to Iraq | 121 | ||
| Payment Methods for North Korean Contracts | 121 | ||
| Poland | 121 | ||
| Methods Used To Hide Transshipment to Iraq | 121 | ||
| Polish-Iraqi Procurement Financial Flows | 122 | ||
| India | 122 | ||
| Belarus | 125 | ||
| Key Belarusian Individuals Linked to Illicit Trade With Iraq | 126 | ||
| Materials, Equipment and Services Provided by Belarus | 127 | ||
| Payments From Iraq to Belarus | 129 | ||
| Taiwan | 129 | ||
| Egypt | 130 | ||
| Yemen | 131 | ||
| Opening Conventional Trade With Yemen for Oil and Cash | 131 | ||
| Yemen Emerges as an Intermediary for Iraqi Illicit Imports | 132 | ||
| Importing Prohibited Commodities | 133 | ||
| Overview | 133 | ||
| Deceptive Trade Practices Supporting Illicit Procurement | 133 | ||
| Use of Trade Intermediaries | 133 | ||
| Disguising the Nature of Prohibited Goods | 134 | ||
| Consealing the Identity of Commodities | 135 | ||
| Discussing the Commodity's Destination | 137 | ||
| Use of Illicit Smuggling and Transportation Networks | 137 | ||
| Smuggling by Air | 138 | ||
| Smuggling by Land | 138 | ||
| Smuggling by Sea | 139 | ||
| Smuggling via Jordanian Ports | 139 | ||
| Smuggling via Syrian Ports | 142 | ||
| Smuggling via the Arabian Gulf | 142 | ||
Annexes | |||
| A. Translations of Iraq's Bilateral Trade Protocols | 145 | ||
| B. Known Oil Voucher Recipients | 167 | ||
| C. Iraq's Budgetary Process | 201 | ||
| D. Iraq Economic Data | 207 | ||
| E. Illicit Earnings Sources and Estimation Methodology | 217 | ||
| F. Iraqi Oil Smuggling | 221 | ||
| G. Iraq's Banking System | 251 | ||
| H. UN Security Council Resolutions Applicable to Iraq | 257 | ||
| I. Suspected WMD-Related Dual-Use Goods and Procurement Teransactions | 261 | ||
| J. The Procurement of Conventional Military Goods in Breach of UN Sanctions | 267 | ||
| K. Suspected Intermediary and Front Companies Associated With Iraq | 291 | ||
| L. Procurement Acronyms | 295 | ||
|
NEWSLETTER
|
| Join the GlobalSecurity.org mailing list |
|
|
|
