Posted on 09/08/2001 5:21:33 AM PDT by pttttt
Wednesday September 5, 2:01 pm Eastern Time
US shift clears Iraq to buy French phone equipment
By Irwin Arieff
UNITED NATIONS, Sept 5 (Reuters) - The United Nations has cleared a long-stalled purchase by Iraq of nearly $75 million of telecommunications equipment from French company Alcatel after the United States lifted its objection to the sale, U.N. officials and diplomats said on Wednesday.
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Washington had blocked the sale for more than two years in the U.N. Security Council's committee on Iraqi sanctions, fearing the equipment would be used to bolster Baghdad's military capabilities.
Washington relented and lifted its ``hold'' on the contracts last month as part of a campaign to show it was doing all it could to alleviate the suffering of ordinary Iraqis under U.N. sanctions imposed after Baghdad's 1990 invasion of Kuwait. The new U.S. stance was first reported by The Washington Post.
Alcatel spokesman Mark Burnworth said the bulk of the equipment consisted of central office switching equipment needed to rebuild Iraq's local telephone network, which was badly damaged during the Gulf War, when a U.S.-led coalition drove Iraq out of Kuwait.
The French firm had helped build Iraq's phone network in the 1980s, and ``it was only natural for them to ask Alcatel to upgrade and help make repairs to that system,'' Burnworth said.
Alcatel has worked with the United Nations and the International Telecommunications Union to help assure the equipment would be used to further humanitarian rather than military goals, he said.
``U.N. organizations involved in the oil-for-food program have said a reliable telephone network was important for their distribution of blood, food and other humanitarian needs,'' Burnworth said.
The oil-for-food program allows Iraq to export oil and buy civilian goods under U.N. supervision to offset the impact of the sanctions. Washington has softened its stance against use of the program to purchase goods with possible military as well as civilian applications, in order to build support for a joint U.S.-British initiative to overhaul the creaking 11-year-old sanctions regime, which Baghdad wants ended.
France and China are going along with the plan. But Russia, Iraq's closest ally in the 15-member Security Council, has rejected the entire proposal.
Their ``smart sanctions'' proposal, set aside by the council in July but still under consideration, would make it easier for Iraq to buy civilian goods while tightening controls on oil smuggling and prohibited weapons.
One aim of the overhaul is to counter Iraqi claims that the sanctions create hardships for ordinary Iraqis.
China agreed in June to support the initiative after the United States lifted holds on more than $80 million of contracts for Chinese telecommunications goods.
These included a contract to buy mobile telephone equipment from Huawei Technologies Co., a Chinese firm said by U.S. intelligence officials in February to have helped Iraq upgrade its air defenses with fiber-optic equipment.
The United States dropped its holds on the Alcatel contracts after France asked for the same treatment as Washington had given China, diplomats said.
``The United States put itself in a box when they turned around and approved the Chinese contracts in June after rejecting them in February on grounds they would bolster Iraq's air defenses,'' one diplomat said, speaking on condition of anonymity.
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