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Question: Could you give us a rundown on the tanker that was detained in the Gulf? Mr. Foley: Yes, I can. I think you'll find that the operational details will be made available at the Pentagon today. I don't necessarily wish to empty the room as I just begin my briefing, but I understand that P.J. Crowley's briefing would have begun a few minutes ago. So you may have to check with your colleagues about some of those operational details. What I can tell you is that yesterday a U.S. Navy ship operating within the MIF, the Multinational Maritime Interception Force, stopped a Russian tanker in international waters off the United Arab Emirates. As the multinational force has done for the last nine years, the tanker is being inspected to determine whether it is carrying contraband. I was informed before coming in here that the decision has been made by the MIF to divert the ship for further inspection but, again, I'd refer you to the Pentagon for up-to-the-minute details on the MIF's actions. Under the authority of UN Security Council Resolution 665, the multinational force routinely intercepts and inspects ships to ensure compliance with UN sanctions on Iraq. Question: Have you received a protest from the Russians? Mr. Foley: Well, we've seen public declarations out of Moscow in this regard. I don't know whether those have been conveyed through diplomatic channels in any kind of a formal way, but what I can tell you is that we have been in regular contact with Russian officials, both here and in Moscow, for almost one month on this issue. We have spoken with the Russian ambassador here in Washington several times in January prior to the interception of the vessel. The focus of these discussions were suspicions that the MIF had regarding the activity of vessels belonging to certain Russian firms. The Russians have told us that this ship is privately owned and that an investigation on the Russian side is underway. The Russians have not provided us thus far with the results of their own investigation. The Russian Government has also requested consular access to its Russian nationality crew on the tanker and consular access has been granted. We are working now to make the necessary arrangements. Question: Can you tell me, aside from this ship which has been seized and one other which was in the area--you said that you talked to the Russian ambassador several times in January. Mr. Foley: Right. Question: About this. Was this about these particular ships or other ships which were in the area and suspected of smuggling? Mr. Foley: I think it's the particular case we're talking about. Question: Okay. Can you say--you all brought out pictures on, I believe it was December 10th, showing a larger number of ships than usual--at Basra, I believe--that you believed were engaged in smuggling activity. Do you have any information about whether that up-tick in activity continues? Mr. Foley: Yes, that indeed is our understanding that that up-tick that we brought to your attention in December is continuing. I may have some information on that, if you'll bear with me for a moment. The amount of illegal Iraqi oil smuggled by maritime routes has virtually doubled since the resumption of oil smuggling in late August of 1999. Now, this is indicative of Iraqi attempts to circumvent current sanctions that limit Iraq to the legal export of oil via the Mina al Bakr oil terminal. You remember during that briefing I pointed out the various locations, including the terminal and the tankers that were receiving off-loaded gas oil. Obviously, we have stressed the point that Iraq is able to gain more from the profit of illegal sales since they go directly to the Iraqi regime; they're not controlled, by definition, by the United Nations. We believe the recent surge in smuggling activity can be attributed, at least in part, to the increase in the price of oil that obviously increases the profits that smugglers enjoy and also more money for the Iraqi regime. So, yes, we've seen a significant up-tick in this kind of activity over the last several months. Question: Did the Secretary talk about this in her meeting with Putin? Mr. Foley: Well, as I said, we've been discussing this issue with Russians in Moscow and here in Washington at a variety of levels. I'm not going to go into the details of her meetings in Moscow. Question: Jim, there's another regime that benefits from the smuggling, and that's the one that controls the waterways that these ships go through--and that's Iran. And I wondered if you all have asked Iran to clamp down on this, if you've made any sort of protest to the Iranians. Mr. Foley: Well, as you know, all countries are bound by the relevant UN Security Council resolutions, are bound to respect and, indeed, to enforce the sanctions regime. The United Nations is aware that the smugglers route often hugs or goes along the Iranian coastline, and it's our information that the UN Sanctions Committee has raised this issue with Iran in the past and we expect that it will be doing so again. I have, by the way, just I think a little bit more in the way of statistics about the nature of the up-tick, again in response to your question. Illicit oil exports via the Persian Gulf averaged about 50,000 barrels a day for much of 1998. Oil smuggling increased sharply in the Fall of 1999 and has now reached about 100,000 barrels a day. Question: My first question is: How do you know that? Is that because it's been confiscated? Mr. Foley: Well, this is, obviously, the responsibility of the multinational force to enforce the embargo and enforce the sanctions, and they are able to make determinations on the basis of the observations they make and on the basis of their inspection and boarding activities. I can give you some figures, if you're interested, in connection with the kind of work that the multinational force has been performing. Since 1990, the interception force has queried more than 28,000 vessels. This is done by radio. They have boarded more than 12,000 vessels and diverted 700 for violating UN sanctions. I may have statistics covering the last year, if you'll bear with me again. In 1999, there were 2,422 queries, 700 boardings, and 19 diversion to various ports of call. I might add also that this is not the first case of an interception of or diversion of a Russian vessel. The facts in this regard are the following. Russian-flagged vessels have been implicated in the illegal export of Iraqi oil in the past. This is not a new event but it is unusual in the sense that we've not seen very large numbers of violators and a significant pattern of such activity. It's not new; it is somewhat unusual. Again, the MIF routinely intercepts ships of any nationality suspected of carrying contraband. The last time a Russian-flagged vessel was boarded was on the 31st of August 1998. The last time there was an actual diversion of a Russian-flagged vessel was on January 5th, also in 1998. Question: You said that you've been talking to the Russian ambassador and other Russian officials about this for over a month and talking about these specific cases, or in a sense that's what I thought you said. Mr. Foley: Yes. Question: And so if you've been tracking this for a while, I mean, was there a conscious decision made to wait until the Secretary had left Moscow before boarding the ship? Mr. Foley: No, not to my knowledge. Again, this is something that has been tracked, but this is an operational question. I'd have to refer you to the Pentagon. But the multinational force acted when it was in a position to do so, is my understanding. Question: Are there any countries who can tell you that you also have this kind of contact about suspicious vessels? Mr. Foley: What was the first part? Question: Other countries, perhaps, besides Russia? You only gave us Russia as the name of a country which you have boarded and intercepted. Mr. Foley: Well, I gave you statistics about large numbers of queries, of boardings and of diversions. I don't have a breakdown on the nationality of the flags of the various vessels. You know, I think it's important to stress here that these are, in many cases, vessels that employ flags of convenience, and you can't necessarily point to a given flag and assume that a particular government is responsible for what's going on. And in fact, even when you're talking about the littoral states--I think I made this point in December--some of this activity can occur unbeknownst to them. It's the job, obviously, of all nations to meet their responsibilities under Security Council resolutions, including the littoral states. As I noted a few minutes ago, this Russian flagship is privately owned and we, again, have not drawn the conclusion that the Russian Government in any way is supportive of efforts to smuggle or to overcome or subvert the sanctions regime. But this is something that they told us that they're looking into. And as I said, we'd not been informed of the results of their own investigation. Question: You mentioned about diversions. What happens when it is proven that it is smuggled oil? Is it confiscated then? Mr. Foley: Yes, my understanding is that the contraband is confiscated. The proceeds of the contraband are deposited into UN accounts. Question: Where does the diverted oil go? Mr. Foley: What was the question? Question: The oil that is smuggled, where is it sold? Where is it off-loaded? Mr. Foley: It's off-loaded I think in a number of the littoral states along the Persian Gulf. Question: Is anyone aware where this ship was going? And then I have another question too. Mr. Foley: You'd have to ask the Pentagon if they have that information. Question: And the figures you gave, does that cover only illegal exports by sale, or does it also cover the fairly extensive, I believe, shipment exports through--across the land border to Iran which are then shipped from Iranian ports? Mr. Foley: I'd have to take the question. I'm not sure if the figure encompasses merely that transported by sea or whether it captures all of the illegal smuggling that is occurring. Question: So you're leaving open the possibility that this Russian vessel was working on behalf of another foreign company or a foreign government? Mr. Foley: I didn't say that at all. I said that the Russians have told us that this is a privately owned company. They're investigating on their side the suspicions that we brought to their attention. I have not said anything about whether they're under the authority of a foreign government or not. I don't see how you would draw that conclusion. Question: You said earlier that the Russian Government was supportive of this activity. Mr. Foley: No, I said that we've not drawn that conclusion. Question: So then why is it wrong to draw--to speculate at least that this vessel was operating on behalf of another--of a foreign government, non-Russian, or a foreign non-Russian company? Mr. Foley: I wasn't implying that this vessel was under the authority of any government, be it Russia or another government. I think the fact of the matter is that as I indicated, that a lot of this illegal smuggling occurs on the part of, on behalf of, private interests, private smuggling interests that use flags of convenience. Question: Not to establish where you think the oil goes when it's being smuggled, you said to the "littoral states", so I don't understand why "littoral states" were important. Mr. Foley: The oil eventually disappears into the international marketplace. You lose trace-- Question: You said the tankers were being monitored. So they're presumably being monitored to their final destination. It's their final destination which I'm asking you about. Mr. Foley: Of this particular ship? Question: Of the ships that are being monitored. Mr. Foley: I don't have a list of all the littoral states. You can take a look at the map. They're along the Persian Gulf is normally where they're often located. Question: Sorry. I'm not trying to be disingenuous, but you're saying that the ships are being monitored to their final destination, presumably. I don't understand why ships should take crude oil from Iraq and sell it to littoral states. I mean where is the market? Where are they selling it to? Mr. Foley: I don't really understand your confusion here. The gas oil is taken out of Iraqi waters. My understand is that these tankers hug the coastline, and they off-load where they can at points of convenience. Question: (Inaudible) send oil, for example, to a littoral state in the Gulf? It doesn't make sense. Mr. Foley: Well, but they're able then to take possession of it and sell it on the open market. Question: Okay. So are we saying that littoral states are taking part in the smuggling operation? Mr. Foley: I think you weren't listening to me a few minutes ago. I repeated what I said in December, which is that our understanding is that basically much of this occurs unbeknownst to many of the littoral states. That's not necessarily always the case. That's why it's necessary to remind the littoral states of their responsibility. The UN Sanctions Committee has done that in many cases. We have done so bilaterally as well. Question: Is Iraq understood to be getting the full amount of--is this a black market in that they're underselling this oil and, therefore, getting only a fraction of what a country--a producer would get on a legal market, or are they just getting whatever any country would typically expect to get for a shipload of-- Mr. Foley: Well, you can take the global figures that I mentioned. We believe the smuggling is in recent months occurring to the tune of about 100,000 barrels a day. And that, I'm told, equals in the vicinity of $25 million a month. But obviously if you're dealing with middlemen, rogue tankers that are off-loading this stuff and selling it on the market, you have different levels of middlemen--the transporters, those who are buying it, those who are then taking it and selling it perhaps through second and third parties--that the profits may be eaten away as you go. But, nevertheless, we believe this is an important and serious violation of the sanctions regime; that the money that Iraq gets, whatever portion of that figure is in a given instance, is money that goes directly to the Iraqi regime. It's not controlled by the United Nations and, therefore, can more easily go toward the nefarious purposes that the Saddam Hussein regime is using its revenues for. Question: Just to clarify, a follow-up. The reason that hugging the coast is important is because that is how you get through the embargo, is that right, and that's how you get through the net? Mr. Foley: I believe that the MIF--and you'd have to ask the Pentagon--operates in international waters. [end of excerpt] Full transcript of Daily Press Briefing on 2/3/00
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