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Ukraine: Businessmen Seek To Bolster Trade With Iraq

Prague, 10 November 1998 (RFE/RL) -- Ukrainian officials say they have lost lucrative business due to the continuing U.N. sanctions against Iraq.

But the sanctions regime has not prevented Ukrainian politicians and industrialists from talking business with Iraqi officials. And now, some Ukrainian legislators are increasingly raising the issue of a unilateral lifting of the sanctions.

The latest high-level discussions took place late last month (Oct. 26) when the Iraqi Ambassador to Russia, Ukraine and Kazakhstan arrived for a visit to the Ukrainian industrial city of Kharkiv.

The ambassador, Hasan-Fakhmi Djumaa, was welcomed by Yuriy Orshansky, the president of the private firm Montaz Elektro, who is also the honorary Iraqi consul in Kharkiv. Accompanying the ambassador was Volodymyr Petrenko, a communist deputy of the Ukrainian Parliament and the head of the parliamentary subcommittee on investments.

Together, the three attended a meeting of Kharkiv businessmen and the heads of large industrial enterprises and research institutes. In attendance were officials from Turboatom, a firm which was prevented earlier this year from selling Iran turbines for nuclear power stations capable of producing high-grade nuclear fuel for weapons.

At the press conference which followed, Montaz Elektro's Orshansky mentioned that during a recent visit to Baghdad by a large Ukrainian delegation, agreements were reached on more than 100 contracts. They included many under which Ukraine would supply Iraq with heavy machinery, turbines, boilers, and other equipment. Orshansky said the total value of these contracts was over $14 billion.

In turn, the Iraqi ambassador used words likely to please Kharkiv's nearly bankrupt state-owned military industrial enterprises, proclaiming: "We are ready to purchase anything Ukraine produces."

But there is an obstacle blocking any of these contracts from taking force -- the wide-ranging U.N. sanctions imposed on Iraq after its 1990 invasion of Kuwait. The United Nations insists the sanctions will remain in place until its inspectors verify Iraq has abandoned all efforts to develop weapons of mass destruction.

Iraq currently faces military threats because of its decision on Oct. 31 to halt cooperation with U.N. weapons inspectors.

Petrenko, the Communist parliamentarian, said that in addition to the U.N. sanctions, business deals are also being blocked because the Ukrainian government is bowing to U.S. pressure.

As an example, Orshansky stated that two months ago his firm was given permission by the UN to purchase 300,000 tons of Iraqi oil in exchange for Ukrainian products. However, he said the Ukrainian Ministry of Foreign Economic Trade blocked the deal on the grounds that the Ukrainian government is avoiding contacts with Iraq.

In a recent interview with RFE/RL, Petrenko claimed that Ukraine cannot "stand by while millions of Iraqi children starve because of the imposed embargo." He stated that Ukraine above all wanted to provide food products for Iraq.

Petrenko added that Ambassador Djumaa had met with the head of the Ukrainian Communist Party, Petro Symonenko, and the Deputy speaker of the Parliament, Adam Martyniuk, also a Communist, while visiting Ukraine. He mentioned that a meeting of parliamentarians from CIS countries had recently taken place in Moscow where the question of lifting sanctions was discussed.

Ukrainian media reports have quoted Petrenko as saying that he supports a unilateral lifting of sanctions against Iraq by the Ukrainian Parliament. A large Ukrainian delegation of parliamentarians and heads of enterprises is due to visit Iraq in the near future.

Asked to comment upon the visit by Ambassador Djumaa, Ukraine's Deputy Foreign Minister Anton Butejko told RFE/RL that "Freedom has a price and Ukraine has to be prepared to work with the world community in upholding the embargo on Iraq." Ukrainian officials have said the embargo has cost Ukraine billions of dollars in lost revenues. Butejko said the world community must begin dealing with this aspect of international sanctions.