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. Last Updated: 07/27/2016

Despite Sanctions, Iraq Lures Foreign Business

BAGHDAD -- This isolated city has not heard so many foreign accents in a long time.


Four dozen Frenchmen led the way, streaming into Baghdad in two separate delegations peppered with corporate honchos. Japanese, Italian and Spanish businessmen also showed up in the past month or so, as did a German parliamentary delegation, a Pakistani aviation official and a Chinese deputy foreign minister, Wang Changyi.


These visits, along with an increasing number of high-level trips abroad by senior Iraqi officials, are the most illustrative demonstration of the waning international will to maintain the UN trade sanctions imposed on Iraq nearly four years ago when it invaded Kuwait.


Most came to "prospect," as one Frenchman put it, for golden deals believed just over the horizon once sanctions are lifted from this oil-rich country. Even the U.S. interests section in Baghdad is fielding calls from Americans.


"They say, "We got this invitation to visit from the Iraqi government,'" one source said, "and the first question they ask is, 'Will they kill us if we come?'"


Iraqi officials are about to launch another blitzkrieg on UN diplomats in New York as the next sanctions review comes up July 18. Diplomats here and UN officials say they expect no significant change at the review and predict the ban on Iraqi oil sales will continue until at least early next year.


Still, the international mood appears to have shifted into one of anticipation that sanctions are nearing an end.


"There is no doubt that there is a trend in favor of Iraq," said a senior diplomat here from a country that fought as part of the U.S.-led allied force in the 1991 Persian Gulf War.


"It's bound to lead to some relaxation or a kind of informal infringement of sanctions," he added.


That "erosion" first broke into the open during a sanctions review in March when key countries such as France, China and Russia wanted a public statement recognizing what Iraq had already done to comply with UN demands.


The United States blocked such a statement. Since then, the waning of support for sanctions has been apparent in other small ways. Turkey negotiated a deal with Baghdad to flush out and repair their joint oil pipeline closed since August 1990 -- seeking Washington's approval for the deal only after the fact.


The project, which will be the first legal sale of Iraqi oil in almost four years, is expected to be approved by the Security Council this month if remaining problems are worked out, Iraqi and other sources here said.


In another development, Russia, owed $6 billion that it hopes to collect one day from Iraq, asked to be allowed to restart work on a power plant being built when sanctions were imposed. That request was denied.


Diplomats and other Western observers said financial and strategic factors have led to diminished support for sanctions.


Helping Iraq rebuild will mean huge contracts for international firms. In addition, Iraq cannot begin repaying its prewar foreign debt of some $70 billion, or claims for compensation arising from the war, until it can again sell oil.


Others argue it is time to admit that the "hidden agenda" of the sanctions has failed. "If you look underneath at what was the real purpose of the sanctions, it was to get rid of (Iraqi President) Saddam Hussein and then, from one moment to another, Iraq will become a democracy," said another senior diplomat here whose country also supported the U.S.-led coalition.