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. Last Updated: 07/27/2016

Iraqi Border Move Sparks Trade Hopes

BAGHDAD, Iraq -- In the capital of a country that supposedly is an international pariah, the coffee shop at the Al-Rasheed Hotel buzzes with a remarkable mix of languages -- French, German, Chinese and especially Russian.


The voices belong to businessmen flocking to the Iraqi capital. They seek small deals now in the hope of winning bigger contracts when United Nations sanctions are lifted.


Foremost among them are the Russians, once the Iraqis' main arms suppliers and a key trading partner. They are hoping to gain from an end to the UN sanctions imposed after Iraq invaded Kuwait in 1990.


The visitors eagerly anticipate the day when the sanctions are lifted and rebuilding commences after 14 years of war -- first with Iran and then with the U.S.-led international coalition.


Prospects for lifting the sanctions have faded since last month's standoff over Iraqi troops moving toward Kuwait. But the businessmen are still keen to prepare for the post-embargo era -- whenever that may be -- and Moscow is the loudest voice in demanding the sanctions be repealed.


Moscow has a been a key force behind the effort to lift the sanctions. Foreign Minister Andrei Kozyrev has gone to the UN Security Council, arguing the embargo should be lifted after a new weapons-monitoring system was given a six-month test.


On Tuesday, the Russian Foreign Ministry announced Iraq was ready to bow to a key UN demand and formally recognize Kuwait's borders, a possible step towards the lifting of sanctions.


Russians admit that allowing Iraq to resume worldwide sales of oil -- which once reached 3 million barrels a day -- would help their own cash-strapped government.


Baghdad owes Moscow $7 billion from before the Gulf War, and fresh deals would help newly-privatized Russian companies get on their feet.


"Of course we would like to get our debt from here. For this purpose we have to do something," Russian trade representative Alexander Galanian said. Lifting sanctions "would help not only the Russians, but everybody."


The Russians have been at the forefront of trade with Iraq, which under the sanctions is allowed to purchase food, medicine and humanitarian supplies but has less and less cash to do so.


The UN sanctions committee gave Moscow approval to deliver tractors and harvesters, which would be paid for by future oil sales.


In September, Russia and Iraq even signed a $10 billion agreement for a wide range of industrial and oil projects in Iraq -- but it cannot be implemented until the sanctions are lifted.


Russian officials insist the deals are aboveboard: "We don't supply anything under the sanctions. There are negotiations with some businessmen to prepare some things if the sanctions will be lifted. But it is only some preliminary negotiations," said Galanian.


He said the Russians were trying to resurrect deals to build 11 power stations and some key irrigation projects.


Diplomats report that Americans are among the constant stream of businessman striving to maintain ties with the Iraqi government -- even though Washington has been the strongest proponent of keeping the sanctions in place.