The New York Times
 By DOUGLAS FRANTZ
 30/03/2001

ABUR, Turkey — Deep in the dusty southeastern corner of Turkey, closer to Baghdad than
to Istanbul, a line of 200 aging tanker trucks stretches for half a mile along the highway as
drivers wait to unload Iraqi diesel fuel at a depot run by the Turkish government.

The trucks are returning from Iraq with full tanks on the last leg of a journey that openly
flouts the United Nations economic embargo against Baghdad. It is sanctions- busting
smuggling regulated and taxed by the Turkish government and tolerated by the United
Nations and the United States.

Estimates on the volume of Iraqi oil and diesel fuel passing through Habur Gate, the only
legal crossing between Iraq and Turkey, range from $300 million to $600 million a year.
Western diplomats calculate that the illicit business puts $120 million a year in the pocket of
President Saddam Hussein.

"This trade is outside the sanctions system," said a senior Turkish government official, who
spoke on the condition his name not be used. "But I would say it is indispensable for Turkey,
and we are sensitive not to allow it to help Iraq acquire weapons of mass destruction."

There is, however, no way to monitor what Iraq does with the revenue.

Western diplomats say the trade has increased as oil prices have climbed.
They justify turning a blind eye because the money helps the battered economy in this
volatile region of Turkey, an important American ally. The trade also is the chief source of
income for northern Iraq's Kurdistan Democratic Party, which opposes Mr. Hussein.

Because of the political considerations, the smuggling continues and underscores a quandary
confronting the Bush administration as it shapes its sanctions policy.

The United States and Britain have been under pressure from other members of the United
Nations Security Council to ease the sanctions. One contention is that the borders are porous
anyway; experts say illegal goods and oil flow overland from Jordan and Syria and by boats
in the Persian Gulf. Another argument is that the sanctions have inflicted the most damage
on the Iraqi people and neighboring countries.

Turkey has been hard hit by the embargo. Iraq was not only a major trading partner, but also
a conduit for getting Turkish agricultural products into the Middle East. Turkish officials
say the embargo has cost the economy $35 billion to $40 billion, and the country's current
economic crisis has increased pressure to expand trade with Iraq.

Secretary of State Colin L. Powell is trying to develop sanctions that will allow more
consumer goods into Iraq and tighten the rein on Mr. Hussein's ability to buy weapons. But
any attempt to loosen controls is likely to face opposition from hard- liners at the Pentagon
and conservative Republicans in Congress.

Edward S. Walker Jr., assistant secretary of state for Near East affairs, traveled to Ankara
this month to assure Turkish officials that the administration is studying ways to reduce the
impact of sanctions on Iraq's neighbors. "It's going to mean that we're going to have to
change the way we deal with the border," Mr. Walker said.

Iraq is allowed to sell oil under United Nations supervision only through a pipeline to
Ceyhan on Turkey's Mediterranean coast, and by ship through Mina al Bakr, a Persian Gulf
port. Proceeds go into an account administered by the United Nations to buy food, medicine
and other goods and pay war reparations.

To gain more control over its oil revenues, Iraq has been sending oil through an
unauthorized pipeline to Syria. It also increased sales of low- grade fuel oil and diesel fuel to
the truckers who ply their trade through Habur Gate.

Turkish and Western government officials as well as truckers said the oil and diesel fuel
were sold by Iraq to the Kurdistan Peoples Party, despite its opposition to Baghdad. The
party is an independent force that controls the border on the Iraqi side.

Masoud Barzani, the head of the Kurdish party, marks up the price, adds a tax and resells it
to truckers. The revenue helps Mr. Barzani cement his control over the border area and
makes it relatively prosperous, diplomats said.

A 31-year-old Turkish truck driver said he paid 14 cents a liter for diesel fuel in Iraq,
including a 2-cent tax. He said he often waited at least three days to load because the lines
were so long.

Once loaded, truckers said, 2,000 or more trucks are often lined up at the border because
Turkey allows only 450 tankers a day back into the country. officials said the limit was
necessary so trucks can be inspected for other smuggling.

The volume of tankers remains far below pre-embargo levels, and the landscape is dotted
with thousands of rusting tankers, described by an official as "martyrs to the embargo."
Officials estimate that 40,000 to 50,000 trucks now haul oil and diesel fuel from Iraq into
Turkey.

By 1999, the illegal trade accounted for a quarter of Turkey's diesel fuel consumption, and
that was when the government stepped in to institutionalize the smuggling with new
regulations. Truckers who had made at least a trip a month were limited to one every three
months. Instead of selling diesel fuel on the open market, they were required to unload at the
government depot in nearby Silopi and pay taxes.

The government profited two ways — by taxing the fuel and reselling it to distributors at a
higher price. The depot collected $74 million in taxes in its first four months in late 1999,
but officials said more recent figures were not available.

Customs inspections were also toughened. The diesel fuel or oil is weighed and tested and
matched against a computerized list to make sure that the driver has not exceeded the
allotted number of trips. Empty tankers and trucks hauling goods to Iraq also are inspected
to make sure any Iraq-bound material complies with the sanctions.

"With our controls, it is almost impossible to get anything through," Abdullah Erin, the
deputy governor who runs the customs gate, said as he strolled through a lot filled with
trucks awaiting examination.

Mr. Erin and Huseyin Baskaya, the provincial governor, insisted that the trade operated
within United Nations sanctions. Mr. Baskaya even said he was establishing a company to
take part in the business, with profits earmarked for civic projects.

It is fiction. A senior Turkish official in Ankara acknowledged that the trade was
outside the sanctions, though he defended its economic necessity.

The truckers chafe at the restrictions and taxes. They can earn $2,000 to $3,000 a year, a
good income in the southeast, but it often must support several large families.

Any relaxation of sanctions would be welcomed in the region, where unemployment exceeds
60 percent. After years of civil war between the Turkish government and Kurdish separatists
and the effects of the embargo, the biggest hope many see is opening the border, something
unlikely to happen in the near future.

"Turkey is a loyal friend of the United States, and absolutely the embargo should be lifted so
we can begin to make a living," said Kutbettin Arzu, an official with the Chamber of
Commerce and Industry in Diyarbakir, the regional capital.

In the meantime, the line of trucks continues to run from Iraq to the Turkish depot in Silopi.
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The Kurdistan Observer
www.kurdistanobserver.com