U.S. backs away from blocking Iraqi oil sales


WASHINGTON -- Pulling back from its opposition to lifting any anti-Iraq sanctions as long as Saddam Hussein stays in power, the United States will consider letting Iraq sell oil to pay reparations and meet legitimate humanitarian needs, a senior State Department official said yesterday.

"Our position is that once we are satisfied that Iraq has a legitimate need for the money, that income earned by the sale of oil would be used for appropriate civilian purposes, then we would be willing to entertain the lifting of that particular sanction against the sale of oil," Assistant Secretary of State John Kelly told Congress.

Until now, the Bush administration has said publicly that not only will relations never be normalized until Mr. Hussein departs, but that the United States would oppose any lifting of sanctions before then.

President Bush said May 20: "At this juncture, we do not want to lift these sanctions as long as Saddam Hussein is in power."

Mr. Kelly, assistant secretary of state for the Near East and South Asia, reiterated that policy at a congressional hearing yesterday.

But on further questioning by Representative Lee Hamilton, D-Ind., he opened the door to a partial lifting of sanctions to allow Iraq to sell oil.

"The sanctions can remain in effect even though Iraq would be permitted by the United Nations Security Council to begin again to sell oil," Mr. Kelly said when asked if Iraq could pay reparations with the sanctions still intact.

The Council continues to block any oil sales because members want to know Iraq's true financial position and exactly what the proceeds would be used for, Mr. Kelly said.

"I don't want to say collectively 'the sanctions,' all of them, can be relaxed, because some of them we don't want relaxed," he said.

Besides assigning a percentage to reparations for Kuwait and other victims of Iraqi aggression, "it would be our view that it should only be used for necessary civilian imports, food and other matters -- other materials necessary for the maintenance of the civilian population of Iraq," Mr. Kelly said.

The official insisted that other sanctions would remain in effect. Still, the policy shift could weaken what many analysts maintain is America's strongest lever to drive Mr. Hussein from power -- his inability to resume exporting oil.

Mr. Kelly acknowledged that Mr. Hussein was now in a stronger position than he was immediately after the war, having "reconsolidated his military" and "regrouped."

It came amid increasing alarm that Iraq retained undisclosed parts of its nuclear-weapons program despite allied bombing, and amid reports from the United Nations that Iraq has far more chemical weapons than the 11,000 missiles, shells and bombs it has reported.

But the previous U.S. refusal to allow Iraq to sell oil clashed with the U.N. determination to exact reparations and other costs from Iraq.

Meanwhile yesterday, Britain's Press Association reported that Iraq had released a British engineer, Douglas Brand, who had been sentenced to life in prison by an Iraqi court for spying. The agency said Mr. Hussein ordered the release after the intervention of former British Prime Minister Edward Heath.

Britain has opposed lifting sanctions until Iraq released Mr. Brand and another Briton.

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