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Last Updated: Friday, 15 April, 2005, 22:46 GMT 23:46 UK
Row deepens over UN oil scandal
UN Secretary General Kofi Annan
Mr Annan has become embroiled in the oil-for-food scandal
The US and the UK have rejected allegations by UN chief Kofi Annan that they turned a blind eye to oil smuggling by Saddam Hussein's regime.

Mr Annan suggested the two had inadequately policed UN sanctions against Iraq, enabling the regime to earn huge amounts in illegal deals.

UK Foreign Secretary Jack Straw said the charges were "inaccurate", while Washington was also dismissive.

The UN has itself been under fire over the so-called oil-for-food programme.

The $60bn (32bn) programme allowed Saddam Hussein's Iraq to sell oil in order to buy civilian goods - including medicine - and thereby ease the impact of UN sanctions imposed after Iraq's 1990 invasion of Kuwait.
The bulk of the money Saddam Hussein made out of smuggling was on the American and British watch
Kofi Annan
UN Secretary General

US Senate investigators have alleged that the Iraqi regime received some $4bn (2.13bn) in illegal payments from oil companies involved in the programme.

But $14bn (7.5bn) allegedly came from "sanctions-busting" - the illegal sale of oil to neighbouring states such as Jordan and Turkey.

Overland route

"The bulk of the money that Saddam [Hussein] made came out of smuggling outside the oil-for-food programme, and it was on the American and British watch," Mr Annan said.

"Possibly they were the ones who knew exactly what was going on, and that the countries themselves decided to close their eyes to smuggling to Turkey and Jordan because they were allies."

In his statement, Mr Straw said: "I regret to say that suggestions that the United Kingdom ignored smuggling of oil from Iraq to Jordan and Turkey are inaccurate."

An Iraqi oil field worker checks pipes at the West Qurna oil field in Iraq
Iraq made billions of dollars from illegal oil sales and bribes

He also turned the spotlight on other unnamed UN Security Council members for their "ambiguous approach... to the Saddam regime".

The US spokesman at the UN, Richard Grenell, said Washington did not know of any oil smuggling at the time.

"There is a fundamental difference between oil smuggling, which was happening without our knowledge, and the very public waiver which was granted to some countries," Mr Grenell said.

"We informed Congress and publicly acknowledged our desire to grant these certain countries an exemption.

"This exception was given before the oil-for-food programme even began."

But Newt Gingrich, who heads a US Congressional task force on UN reform, said the UN was not solely to blame and that the whole affair reflected badly on members of the Security Council and the major powers, including Washington.

The former US House of Representatives speaker has long been a vocal critic of the UN.

Mr Annan also admitted smuggling to Jordan and Turkey had been accepted as a way of compensating them for lost trade with Iraq.

The BBC's Jim Muir says it was inconceivable that the Americans were not aware of the smuggling.

HAVE YOUR SAY
Gross incompetence has cost the UN any and all credibility it could possibly have
Drew, Trinidad, West Indies

Together with the British, they ran a military co-ordination committee in northern Iraq and their planes regularly patrolled the area, our correspondent says.

A decision had clearly been taken to turn a blind eye to the lucrative trade, he says.

The oil-for-food programme has been the subject of several corruption investigations.

Mr Annan was recently criticised over his son's work with the programme.

On Thursday, a Texan and a Bulgarian were arrested in the US and indicted for bribery.

A third accused man, Briton John Irving, has vigorously denied any involvement.



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