Annan said the United States and Britain closed their eyes to Iraqi oil smuggling to Turkey and Jordan, because those two countries are allies.
He also noted that most of the money Hussein's regime made illegally while under UN sanctions was from oil smuggling, not from kickback schemes under the "oil-for-food" program.
Annan's comments came as U.S. federal prosecutors in New York yesterday charged an American businessman, a Briton, and a Bulgarian with allegedly paying millions in secret kickbacks to Hussein's regime to secure oil deals as part of the oil-for-food program (see UN: Three Charged In Oil-For-Food Kickback Scheme).
In a separate case connected to the oil-for-food program, a South Korean was charged with accepting millions of dollars while operating as an unregistered agent for Hussein's government in the United States.
For the latest news and analysis on Iraq, see RFE/RL's webpage on "The New Iraq".