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Russian-Iraqi arms deal under threat of annulment

November 12, 2012, 18:13 UTC+3 Alexandrova Lyudmila

MOSCOW, November 12 (Itar-Tass) — A 4.2-billion-U.S. dollar arms deal between Moscow and Baghdad, the biggest one in the past decade, is out on a limb. The scandal flared up over a contract on the supplies of Russian arms to Iraq. It looks like this contract is going to be cancelled. The news has drawn a wide response in Russia: analysts are trying to guess the reason for that – either corruption in Iraq or pressure exerted on Baghdad by the United States and other Russian rivals on the arms market.

Contracts worth 4.2 billion U.S. dollars on supplies of 42 Russian-made Pantsir-S1 surface-to-air missile systems and 30 Mi-28NE helicopters to Baghdad were signed by Prime Ministers Dmitry Medvedev of Russia and Nuri al-Maliki of Iraq in October 2012. The side also agreed that further on Russia might sell to Baghdad MiG-29M/M2 fighters and armoured vehicles.

The contract was the first large-scale deal with Iraq after the regime change in that country and was considered as a kind of compensation for the military hardware Russia failed to supply to Damascus because of the war in Syria. Some even said Russia was going to regain its positions on a very important weapons market it withdrew from after the Gulf war. After that war, Moscow wrote off Baghdad’s eight-billion-U.S. dollar debt for the weapons supplied to Saddam Hussein. The deal, when realized, would make Russia Iraq's second-biggest arms supplier after the United States.

But, Iraqi prime minister's adviser Ali al-Mussawi said on Saturday that the Russian-Iraqi arms contract would be called off. “When Maliki returned from his trip to Russia, he had some suspicions of corruption, so he decided to review the whole deal... There is an investigation going on, on this,” he said. However, Iraqi acting Defence Minister Saadun al-Dulaimi insisted shortly after that no deal had been cancelled. “We are still in negotiations," he told reporters.

According to Russian media, there are real grounds to expect that the deal might be cancelled. Opponents of the deal seek to persuade Baghdad that the contract price is unreasonably high.

The Kommersant newspaper cites sources in the Russian government saying that Iraq came under strong pressure from Russian rivals on the arms market – the United States and Ukraine. They were pushing the idea that the contract was overpriced and hinted to its graft-motivated nature.

“The United States is taking much effort to avert the deal,” a government source told the newspaper. “I would not be surprised to know that they will make attempts to wreck or complicate the deal post factum.” According to a source close to Russia’s system of military technical cooperation, Ukraine was the first among the post-Soviet republics to win a foothold on the Iraqi defence market, but Russia proved to be more agile. Kiev could not help feeling jealous.

Iraq’s former ambassador to Russia Abbas Halaf told the Moskovsky Komsomolets newspaper that as a matter of fact the information about the cancellation of the deal had not be refuted. It looks like that the government and parliament are simply making contradictory statements, he clarified his words. The contract, in his words, is very much likely to be cancelled. “But the reason is no corruption but pressure on Iraq from the United States,” he said.

According to Abbas Halaf, the key goal of al-Maliki’s visit to Moscow in October was to intimidate the United States. Washington has recently banned the use of some types of American weapons in Iraq, so it was designed as a defiant gesture to come to Russia to sign a contract.

Shortly after al-Maliki was back from Moscow, a United States military technical cooperation envoy was in Iraq to force the Iraqis into a supplement agreement of purchases of American planes, the diplomat said.

“Now the Russia side has no idea of what is actually going on in Iraq,” he stressed.

Khaled al-Alwani, a member of Iraqi parliament’s anti-corruption committee, told the Arabic-language Anba Moscow website that al-Maliki is under severe pressure from lawmakers, who signed an appeal urging to suspend the arms deal with Russia.

At the same time, Hassan Jihad of Iraqi parliament’s security and defence committee said the country’s government planned to send a new delegation to Russia to sign a new contract.

Nezavisimaya Gazeta cites experts as saying the deal is on the brink of wreckage, since the Iraqi government is divided over a bonus to be paid to go-betweens for a large-scale arms contract. Some say the sum amounts to at least 500 million U.S. dollars.

“The contract has not yet been officially cancelled,” said Pavel Felgengauer, an independent military expert. “It seems that it will be considerably rewritten. The reason is corruption in Iraq.”

According to the Kommersant daily, Russia will seek official explanations from Baghdad. “We are in talks with the Iraqi side to clarify their position, including on the recent ambiguous statements,” a source in the Russian government told the newspaper. “We have not been informed about any changes in Baghdad’s plans or its worries.”

Neither the Russian Federal Service for Military Technical Cooperation nor Russia’s biggest arms trader Rosoboronexport has been notified about the annulment of the contract. No information about the cancelled deal has come through diplomatic channels either.