In Peace Bid, US Eases Grip on Jordan Trade

Yesterday the Monitor reported that the Clinton administration had purposely ignored exports of military-related material through Jordan to Iraq.

WHEN Jordan's King Hussein met with United States Secretary of State Warren Christopher in London this past April, the Arab monarch pressed for an end to the US-led interception of ships heading for the Jordanian port of Aqaba. Hussein had long complained that US warships stopping United Nations-embargoed goods from reaching Iraq were damaging to Jordan's already ailing economy.

Anxious to move forward in its regional peace initiative, the Clinton administration acceded to the Jordanian request after the king said it was the only way Jordan would enter bilateral negotiations with Israel.

Critics of the recent US decision, including US Customs and Pentagon officials, charge that it increases the opportunities for Jordan's transfer of forbidden goods to neighboring Iraq, including equipment for Saddam Hussein's military.

There to intercept contraband cargo, the US ships had diverted vessels from delivering prohibited goods since the sanctions were imposed against Iraq in August 1990. Jordan claims this action has cost the Hashemite Kingdom more than $1 billion.

This month, in a Jordanian-US agreement, the London-based Lloyd's Register assumes its role as neutral examiner of Aqaba-bound ships. Verifications of the cargo will not be done, as before, aboard ships at sea, but on land, where Jordanian port and customs officials will assist the Lloyds agent in ``monitoring,'' not ``searching,'' the cargo, according to Jordanian officials.

A senior administration official who tracks compliance with sanctions against Iraq fears that the new inspection agreement ``could significantly alter that [sanctions] picture'' by providing Jordan-based firms the opportunity to conceal a greater amount of cargo and to transport it more quickly to Iraq. He in fact contends that Iraq has been able to resupply and fine-tune its weapons-of-mass-destruction program of late, largely with supplies coming through its border with Jordan.

Robert Gates, Central Intelligence Agency director during the Bush administration, says evidence suggests that Jordan is the major point of entry for military goods bound for Iraq. He calls the new Lloyds agreement ``tantamount to lifting the embargo against Iraq.''

Indeed, that appears to be what many foreign suppliers are banking on. According to import-export merchants and intelligence sources, Amman is the center where foreigners are using their embassies as commercial outposts for re-exports to Iraq. According to a Mideast businessman, ``They are using Jordan as a conduit and importing for re-export everything Jordan normally imports, including high-technology equipment, trucks, tires, fertilizers, and chemicals'' - all of which Iraq desires for its nuclear, biological, and chemical weapons programs.

Jordan's infractions have been documented in US courts and in on-going US Customs investigations that reveal US-based Jordanian nationals transferring forbidden materials to Iraq through Jordanian holding companies - but the Clinton administration has decided not to take action in many of these cases.

In fact, to entice King Hussein into a face-to-face meeting with Israeli Prime Minister Yitzhak Rabin, now scheduled to take place July 25 in Washinton, the US has offered debt relief and military assistance to Jordan.

``This [US] government is aware of the lack of total cooperation we get from the Jordanian government, but you can only push so far,'' a Pentagon official says. ``This is an administration that is afraid of confrontation. We're aware of the [Jordanian] front companies, but there has been little or no action to get the front companies to shut down.''

The only reason they would shut down is if there were no financial incentives to keep operating, the Middle Eastern businessman says. While the Iraqis are in a money crunch, he says, ``they are still paying off [some very high-level] Jordanians,'' to form front companies.

Iraq's need for hard currency has led it to aggressively seek outlets for oil exports. Again, the White House has remained silent to a proposal that would provide Iraq with more foreign exchange.

Under the proposal, Jordan could sell a portion of the 60,000 barrels of oil it is allowed to import daily from Iraq under the UN embargo to West Bank and Gaza Palestinians. At present, the Iraqi oil helps pay down an old debt to Jordan; the Hashemite Kingdom pays for part of the oil mainly with bartered goods.

A senior member of Clinton's foreign policy team who was present at a Paris donors' conference for Palestinian aid several weeks ago recounts that a proposal was made to ship Iraqi oil through Jordan to the Palestinians. It struck him as a possible violation and he reported it when he returned to Washington.

A source close to the king insists that the request for the oil, which came straight from the Palestine Liberation Organization, has become a ``very politically embarrassing issue.'' He says, ``We told them we are not an oil-producing country, but that we are getting our supplies from Iraq.'' Jordan's refining capacity is small, and the country refines what it needs, and no more, he says. ``We are not in a position to provide it to others.'' Besides, he says, ``there is no sound basis for it now. I am not going to not observe UN resolutions pertaining to the sanctions.''

Jingzhang Wan, special aid to the UN Sanctions Committee, along with other UN officials, has heard a lot of discussion about the possible oil deal. But, he says, ``no country has complained or asked us to investigate this, so we have taken no official action.''

Amman is home to a new front company for the illegal export of Iraqi oil, according to Al-Sharq Al-Awsat, an Arab newspaper in London. It reported last month that ``Baghdad has begun to implement a new marketing strategy for its oil sales ... which relies on Iraqi-Iranian cooperation in connection with export facilities and on a network of front companies owned by the Iraqi government.'' It reported that the Iraq oil ministry has set up two broker companies abroad under Iraqi names, one of which is in Amman.

Iraq is currently violating the sanctions by selling oil, according to a Saudi Arabian official. He says US intelligence has shared aerial photos with the Saudis that reveal truck movements across the Iraqi-Iranian border as Iraq exports some 25,000 barrels of oil per day. Iran has been selling it at a profit on the spot market and moving it to Sudan, which has sent Iraq food and livestock in return, the Saudi official says.

His country strongly opposes any relaxation of the embargo against Iraq, and is impatient with Washington's failure to clamp down on the Jordanians. The Saudi official says Riyadh advised against the recent US decision to change the inspection sites for ships at the Aqaba port. ``The administration can force the Jordanian government to put an end to [sanctions violations], but it has looked toward the peace process, which is its overriding concern,'' he says. The result is that ``the US [has] closed an eye'' as Iraq rebuilds its military strength.