Prepared for the
Conference of Presidents of Major American Jewish Organizations

in association with the Fairness Project
by the Jerusalem Center for Public Affairs
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June 3, 2002

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In-Depth Issue:

How Iraq Subverts UN Sanctions

  • Reimbursement for goods exported to Iraq under the "Oil for Food" program includes a 10% "pricing transfer" that is transferred in cash to the Iraqi treasury.
  • Some commodities imported under the UN program are not needed for local markets and are re-exported by the government to earn illicit cash.
  • Oil traders, often from Qatar, buy smuggled Iraqi oil at a discounted price, then arrange a new "certificate of origin" and sell it on international markets.
  • Other smugglers sail their ships at night through the Shatt Al-Arab waterway between Iraq and Iran, claiming to be heading for Iranian ports, then turn north and pick up oil at Iraqi terminals.
  • Traders who want to do business with the Iraqi State Oil Marketing Organization pay a special surcharge of $0.25-0.40 per barrel, though this is officially illegal under the UN sanctions regime.
  • The Wall Street Journal (May 2, 2002) reports that Iraq receives at least $1 billion annually from its oil exports to Syria.
        On May 14, the Security Council approved a revised sanctions regime on Iraq. Yet Iraq may be expected to continue to subvert the system and generate illicit revenues. (Al-Hayat [UK]/MEMRI)

    Useful Reference:

  • Twenty Facts about Israel
  • Myths & Facts: A Guide to the Arab-Israeli Conflict

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  • Speeches
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  • News Resources - USA and Europe:
  • Military Raids are Best Path to Security, Israelis Say
    Defense Minister Benjamin Ben-Eliezer said repeated intelligence-driven raids by the army into areas under Palestinian control were now Israel's preferred mode of operation. Ben-Eliezer was responding to a suggestion by Israel's Shin Ben security service chief Avi Dichter that the army remain in Palestinian cities until effective barriers are erected to block infiltration into Israel by Palestinian suicide bombers. (New York Times)
  • Muslim Gangs Attack Jews in Belgium
    Eli Fallick and his son were attacked by a gang of 20 Arab youths while on their way to the Belz synagogue in Antwerp. A few days later Fallick's 10-year-old daughter was assaulted on her way back from school. In Europe, 2,000 anti-Semitic incidents have been reported since September 11, an average of 18 a day. (Daily Telegraph)
  • Top D.C. Lobbyists Facing Heat Over Saudi Ads
    Partners at one of the nation's most powerful lawyer-lobbyist firms, Patton Boggs, are seeking to drop Saudi Arabia as a client in the wake of a controversial ad campaign by Qorvis Communications, in which Patton Boggs owns a 15% stake. The ads were intended to boost the image of the kingdom, battered by the September 11 attacks which were perpetrated by Saudi exile Osama bin Laden and 15 Saudi nationals, and by the Saudis' refusal to let U.S. forces use Saudi bases for attacks on Al Qaeda and the Taliban. (Forward)
  • News Resources - Israel and Mideast:

  • U.S., Israel Debate Arafat's Future
    During his current visit to the region, U.S. Assistant Secretary of State for Near Eastern Affairs William Burns spoke of the importance of implementing reforms in the PA and said Arafat was the one to give the changes legitimacy in the eyes of the Palestinian public. Prime Minister Ariel Sharon replied that "With Arafat, there won't be any reforms and even if there are, they won't be trustworthy....With Arafat in power, the terror will continue. We will not view Arafat as a partner and we will not be able to take risks as long as he is there." (Ha'aretz)
  • Arafat Offers Hamas to Join His Government
    Yasser Arafat and Fatah leaders have held talks with members of opposition groups concerning the formation of a new cabinet. Hamas sources say the group is considering an offer to join the PA cabinet for the first time, but there are indications that Hamas may reject the offer. (Jerusalem Post)
  • German Foreign Minister Fischer Promises to End German Boycott of Merkava Tank Parts
    Responding to the personal request of Prime Minister Sharon and Defense Minister Ben-Eliezer, German Foreign Minister Fischer has promised to use his influence on German companies to provide Israel with the necessary equipment for developing the Merkava tank. A German boycott underway for more than six months has held up development of the Merkava Mark IV. (Maariv)
  • IDF Destroys Two Explosives Laboratories Near Nablus
    A large explosives lab was discovered in the Balata refugee camp in the house of a senior Tanzim terrorist who was killed in an IDF operation two weeks ago. The lab contained gas cylinders, two cone charges, an anti-tank missile, hundreds of pipe bombs, and large quantities of potassium and containers of acid. The second laboratory was located inside a restaurant, a few feet from a Palestinian Navy facility. Inside were an explosive belt ready for detonation, mortar bombs, bags of TATP explosives, and switches for detonating explosive belts. (IDF)
  • Israel, China Resuming Defense Ties
    An Israeli military delegation recently visited China, signalling the end of the crisis over the aborted Phalcon early warning plane sale to China that was cancelled due to U.S. pressure. (Ha'aretz)
  • Global Commentary and Think Tank Analysis (Best of U.S., UK, and Israel):

  • Arafat's Goal: Palestinian State Absorbing Israel and Jordan - Ehud Ya'ari
    Today's conflict is not a popular uprising but a premeditated war. The Palestinian state that Arafat is building will be a hostile state, for which the 1967 borders mean nothing. Palestinians today speak of reversing the results of 1948 and of absorbing Jordan.
        Arafat is preparing a long term political coalition between Hamas and the Tanzim. This is a partnership in terror with dangerous implications for Israel.
        We finished up with a draw in the first intifada. This time, a draw constitutes disaster. Israel must decisively win this round of conflict. (BESA Bulletin)
  • War of Ideas - Thomas L. Friedman
    On May 8, the Saudi-owned Arabic daily Al-Sharq Al-Awsat ran an essay by an anonymous Arab diplomat who asked: "What would happen if every Arab country had, since 1948, turned its attention to building itself up from within, without making Palestine its main issue? What would happen if every Arab country focused on educating its citizens, and on improving their physical and emotional health and cultural level?" (New York Times)
  • A Palestinian Cry for Reform - Chip Reid
    Marwan Kanifani, who represents Gaza in the Palestinian Legislative Council, insists that most people there are more focused on domestic issues than on the struggle with Israel. In Gaza, many say Arafat's devotion to (or “obsession with”) the conflict with Israel and Palestinian statehood has led him to ignore domestic issues or to delegate them to a group of powerful appointees, commonly believed to have looted the government of millions. (NBC)
  • Palestinian Anti-Personnel Bombs Wreak Havoc on Israeli Victims' Bodies - Mandi Steele
    Suicide bombs are packed with spikes, nails, screws, nuts, bullets, ball bearings, and even rat poison. Dr. Michael Messing, a radiologist from Evanston Northwestern Healthcare in Illinois, saw one young man with 300 individual metallic fragments imbedded in his body from head to toe. [Note: This article includes photographs of x-rays and CT scans.] (
  • Talking Points:

    A Hint to the Saudis? - Former Secretary of State George Shultz
        (Arlington, VA, May 29, 2002)

    • Another front that needs our attention is that of the regimes of Arab and Islamic countries. Over the years these regimes have made their deals with the terrorists. They have paid them off, propagandized them to focus on external enemies, or sought to use them to build up the religious legitimacy of those regimes.
    • They have created a monster. They may have bought some time for themselves, but they are sealing their own doom if they keep on this path.
    • Since September 11th, some of them have come to their senses. These regimes have to take responsibility as states, and they must be held accountable. They have to stop playing the double game. They should be encouraged and supported if they work seriously to put their states and societies on the right track.
    • But I have to say, when money is collected to reward the families of suicide bombers, that is support for terrorism. There is no other way to describe it.

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