The Telegraph
Since 1st March, 1999
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Iraq to demand $3-bn assets kept in Syria

Baghdad, Dec. 3 (Reuters): Iraq is preparing to demand repatriation of $3 billion of cash assets held in Syrian state banks under deals struck with the government of Saddam Hussein, Iraq’s finance minister said today.

In Damascus, an official Syrian source said the figure was not accurate, saying it amounted to hundreds of millions of dollars, not billions. The move by the US-installed Iraqi government will put Syria under more financial pressure after the United States imposed sanctions on the country for backing the Lebanese guerrilla group Hizbollah and a number of Palestinian groups.

“All of the money belongs to Iraq. An Iraqi delegation will travel in the next few weeks to Damascus,” Kamel al-Gilani, finance minister in Iraq’s US-backed provisional government, told journalists. The $3 billion amounts to 20 to 30 per cent of Syria’s gross domestic product and is slightly less than Iraq’s self-generated liquid funds, which are controlled by the US.

Gilani said Syria accumulated the money by selling oil on behalf of Iraq in contravention of UN sanctions and selling non-military goods to the Iraqi Military Industrialisation Organisation, which was under the direct control of former Iraqi leader Saddam Hussein. “We do not recognise these deals,” he said.

But Syria questioned the figure. “The amount (Iraqi assets) is in hundreds of millions of dollars. This has been made clear to an Iraqi delegation who visited for talks on the assets,” the official source said in Damascus.

“There is an ongoing clearing process... there are amounts owed to Syrian businessmen who had business transactions with Iraq and have not been paid,” the source added.

Syria has been a political enemy of Iraq for decades and does not recognise the present Iraqi government.

Saddam was forced to resume relations with Damascus after Jordan — Iraq’s main outlet to the world — turned against Baghdad after the 1990 Gulf War, eventually backing the US invasion that toppled Saddam in April. Iraq started pumping oil to Syria through a pipeline in recent years, border movement was eased and Syrian consumer products flooded the Iraqi market.

Syria has argued that the pipeline that had been shut for two decades was being tested and not used commercially.

Iraq’s banking, however, was still mainly conducted through Jordan and Lebanon.

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