Saban Center for Middle East Policy at the Brookings Institution

Don't Ignore the Sanctions

President Bush is currently pursuing a policy of "regime change" in Iraq. But, by seeking a UNSC resolution that tightens the rules on inspections, the Administration is leaving Saddam Hussein with the option of accepting its new requirements and cooperating for a time with the inspectors. As the President noted on October 14, "It's his choice to make." If Saddam does so, the Administration will then be hard-pressed to avoid returning for a time to a policy of "containment." With new rules of engagement, inspections will become a stronger mechanism for attempting to contain Saddam's WMD threat. But an effective containment regime cannot depend on inspectors alone since at best they can only hope to find existing WMD capabilities and monitor dual-use facilities. Effective containment has always depended on a tightened sanctions system that shuts down Saddam's ability to acquire more WMD capabilities. Without closing off Saddam's $2-3 billion a year smuggling operation, new inspections may strengthen the bars on Saddam's cage only to leave the cage door open.

The Inspections "Trap"

Forced to seek UN cover for a preventative war, the Bush Administration has drafted a UNSC resolution whose real purpose is to demonstrate Saddam's non-cooperation with the inspectors. When that occurs, as the Administration seems to expect, it will then be able to pursue a war to topple Saddam with UN approval.

But what happens if Saddam cooperates, at least for a time, with the new inspection regime? There is plenty of evidence in Saddam's current behavior to believe that this is the course he will follow. He seems to have figured out that making nice to the inspectors and using them to convince a gullible international community that he no longer has WMD is his only way of stopping the Bush juggernaut. He might even allow them to find some evidence of WMD, enhancing the credibility of the inspections along with his own reputation for cooperation.

If Saddam manages to confound our expectations by adopting these tactics of cooperation for the next 6-12 months, President Bush will be hard-pressed not to take "yes" for an answer. Against his better judgment, he will then find himself pursuing a policy of "containment" rather than "regime change." But if it comes to that, the Administration will regret that it didn't use this moment of maximum leverage—when the international community is seeking to stay the President's hand by responding to his demands—to tighten the sanctions regime along with the inspections regime.

The Sanctions "Gap"

After the Gulf War, the Security Council—in resolution 687—obligated member states not to import oil from Iraq or export goods with potential military uses to Iraq. These trade sanctions were designed to be the other arm of a full-bodied effort to prevent Saddam from ever threatening his neighbors again. Inspections and long-term monitoring were supposed to take care of whatever existing WMD capability could be found. Prohibitions on oil exports were designed to deny Saddam the revenue to acquire new WMD capabilities. Prohibitions on exports to Iraq of dual-use goods were supposed to prevent others from selling these capabilities to him.

As long as Saddam remained in power, this "belt and suspenders" approach was judged necessary to ensure that he would not be able to rebuild Iraq's military capabilities. Indeed sanctions, not inspections became the primary tool for preventing Iraq's rearmament once it became clear that Saddam had every intention to thwart Iraq's disarmament.

But this necessarily tough sanctions regime had unintended consequences. It devastated the Iraqi economy and enabled Saddam to blame the suffering of the Iraqi people on the sanctions. Although there were no prohibitions on the importation of food and medicines, Saddam purposely chose not to provide for the basic needs of his people as a means of pressuring the United Nations to ease the sanctions. At the same time, after the abortive effort in 1993 to assassinate the President's father, Saddam turned his intelligence services to a task they proved more adept at: setting up front companies and other arrangements to smuggle oil out of Iraq and import Saddam's requirements into Iraq.

In this effort to subvert the sanctions regime, Saddam was able to take advantage of the dependence of neighboring states on trade with Iraq to induce them to cooperate in his schemes. Jordan was particularly at his mercy because its economy was dependant on an exchange of subsidized Iraqi oil for manufactured Jordanian goods. Recognizing this dependence, the UN turned a blind eye to what developed into a $300 million a year arrangement in which Iraqi oil was trucked into Jordan and goods of all description were shipped back into Iraq.

Similar erosion took place along the Turkish border. The new sanctions regime struck a blow to the economy of Turkey's already impoverished southeastern border region that the Turks were keen to compensate for by allowing smuggling of oil across the border. Since the oil trucks had to pass through Kurdish-controlled territory in northern Iraq, the Kurdish economy benefited dramatically from the cash infusion. Because the U.S. depended on access to Turkey's Incirlik air base to maintain the northern No-Fly Zone that helped protect the Iraqi Kurds, it was in a weak position to demand Turkey shut down the smuggling. And because the illicit oil trade also helped to relieve Kurdish dependence on the United States for humanitarian aid, it was convenient to turn a blind eye to a process that by 2000 was netting Saddam over $500 million a year in uncontrolled revenues.

Iran and Syria also participated in the smuggling of Iraqi oil across their borders adding hundreds of millions of dollars more to Saddam's coffers. Lately, the Syrians have become the worst offenders. Iraqi oil exports through a Syrian pipeline are generating over a billion dollars a year in uncontrolled revenues for Saddam.

And if it proved easy to smuggle oil out, it became just as easy to smuggle goods in. The United States and Britain undertook a range of intensive efforts to press Iraq's neighbors to adhere to the sanctions regime, with mixed results. From time to time, Iran and Syria were convinced to stem the flow. UN monitors were put on the Jordanian-Iraqi border; maritime inspections were conducted on shipping in the Persian Gulf; Lloyds of London maintained inspections at Jordan's Aqaba port. But these fingers in the dyke did little to stop the trade. Turkey would not agree to bring the oil smuggling under UN control. Repeated efforts were made to find alternative sources of subsidized oil for Jordan from Kuwait and Saudi Arabia that would enable it to shut down the border trade. To no avail. Direct appeals by Secretary Powell to the Syrians fell on deaf ears.

Despite the fact that the sanctions were repeatedly loosened to allow UN-controlled export of Iraqi oil and import of humanitarian goods under the "oil-for-food" resolutions, the smuggling only increased. Efforts by Secretary of State Powell to introduce new means to control the smuggling as part of his "smart sanctions" regime also failed. By this year, independent estimates indicated that Saddam Hussein was securing between $2 and $3 billion in uncontrolled revenues that he could use to fund his well-developed procurement machine. This combination of huge amounts of uncontrolled revenues and porous borders means that Saddam has the means at his disposal to pay for and import whatever WMD capabilities his agents can lay their hands on.

In these circumstances, President Bush's concern that if Saddam procured a baseball-sized amount of weapons-grade uranium he could have a nuclear bomb within a year is by no means far-fetched. Yet, in its current approach to the UN Security Council, the Bush Administration has done nothing to address this gaping hole in the sanctions regime. And if the Administration is caught flat-footed by Saddam's acceptance of toughened inspections, this sanctions gap could combine with the inspections trap Saddam is hatching to thwart both regime change and containment. In the worst case, Saddam could keep the UNSC and its inspectors busy chasing down his existing WMD capabilities while exploiting the sanctions gap to build and acquire more WMD on the side.

What Is To Be Done?

It will be difficult now to add new sanctions requirements to the existing draft resolution on inspections because, in the give and take amongst the Security Council members, the U.S. would then be expected to yield on some other important issue in return for adding new language. Instead, the U.S. should insert a reference in the inspections resolution to the need to prevent the thwarting of other parts of the UN resolutions that relate to the sanctions regime. Then a new resolution should quickly be submitted as soon as the current one is passed that would do the following:

  • Require all Iraq's neighbors who import Iraqi oil (Turkey, Iran, Syria and Jordan) to place all those imports under UN monitoring with the revenues escrowed under the "oil-for-food" arrangements but reserved for purchase of goods from these particular countries. In this way, the importing countries would not lose the economic benefits.

  • Establish a robust UN inspections force that would be deployed at all the important border crossing points to scrutinize all goods flowing into Iraq (not just those going in under the "oil-for-food" contracts).

  • Invoke Chapter VII language to remind all member nations of their obligations under the UNSC resolutions to adhere strictly to the sanctions regime.

  • And establish a regular reporting mechanism that would apprise the Security Council of those nations that failed to abide by the tightened sanctions arrangements, threatening them with UN-imposed penalties for non-compliance.

The existing "oil-for-food" arrangements should not be altered to ensure that there would be no credibility to Saddam's claim that the international community was inflicting new damage on the Iraqi people by tightening the sanctions regime. The United States would also have to lead an energetic, international campaign to persuade host countries to shut down Iraqi front companies and to intercept smugglers.

Why should Iraq's neighbors and other countries eager to make a large profit on clandestine sales cooperate with this new, tighter sanctions regime? If they fear the consequences of an American invasion their acquiescence could help make it less necessary. If the United States finds ways to compensate them for their economic gains foregone, this could provide additional leverage. And significantly enhanced UN monitoring of trade across Iraq's borders could impede the smuggling enterprise.

However, at best these are only stopgap measures. They can enhance the effort to slow down Saddam's acquisition of WMD but sooner rather than later the sanctions will erode again. Simply put, Saddam has a greater will to thwart them than the international community has to maintain them, just as he has a greater will to conceal his WMD capabilities than inspectors have to find them. But for as long as the Bush Administration finds itself forced by circumstance to play along with Saddam's inspections cooperation game, it had also better pay more attention to the much neglected sanctions dimension of the containment regime.