Select Committee on Economic Affairs Minutes of Evidence

Examination of Witnesses (Questions 140 - 154)



  Q140  Lord Kingsdown: Do you think that either the UK or the European Union or the United Nations has the institutions and procedures and the staffing needed to make targeted sanctions effective?

  Mr Ross: I have not done a recent comprehensive survey so I cannot claim to be an authority, but my sense is that they have not.

  Q141  Lord Kingsdown: If they do not have, what explains the failure to put the required arrangements in place in the past, and what are the priorities for action now? What is the prospect for targeted sanctions in these circumstances?

  Mr Ross: My own view is that the UN should be told to build up a special unit, or part of the Secretariat, devoted solely to this question. The Security Council Secretariat at present is responsible for sanctions administration through the various committees that are set up by the Security Council and I think they should be instructed by the Security Council to develop a body of expertise on financial sanctions, travel sanctions, all the different aspects of targeted sanctions. That expertise is out there and it can be accessed and they should be encouraged to do that. I think also that the British Government should be encouraged to set up a similar cross-ministerial body in Britain. At the moment, I think it is the United Nations department, or what used to be called the United Nations department of the Foreign Office, that still co-ordinates sanctions policy across Whitehall. I am sure they do that very well, but it might be better, given the experience of Iraq, to set up some kind of cross-ministerial unit which has a more permanent nature to it. One of the problems I have found is a very simple problem, that desk officers in the foreign ministries, certainly in the Foreign Office, rotate through desks every 18 months or two years and so the expertise is constantly forgotten and relearned, and I do not think this is right for a subject of this complexity.

  Q142  Lord Sheppard of Didgemere: You have touched on a lot of this, on various subjects, with examples from Iraq, and so on, but, dealing with the generalisation, are there any particular problems associated with monitoring of targeted as opposed to general economic sanctions?

  Mr Ross: Absolutely. There are manifold problems with all kinds of sanctions; none of them is easy. Targeted sanctions are but a subset of comprehensive economic sanctions. One of the curiosities of comprehensive economic sanctions was that we actually neglected those subsets. Things like asset freezes and targeted financial measures against the regime were actually very low on our list, in terms of the policing of comprehensive economic sanctions. So, paradoxically, we gave it much less attention than perhaps we could have done if it had been just a targeted sanctions policy against the regime. As I say, I think the expertise in these things is quite hard to find. There are forensic accountants, people who are skilled in tracking hidden assets, that kind of thing; those are the people you need for this kind of work and they should be identified.

  Q143  Lord Lawson of Blaby: I am puzzled slightly still, because everything you have said, from your own experience, suggests that economic sanctions not only do not work in achieving their objectives but probably they are counterproductive, unless, of course, the objective is a very, very trivial one, like the surrender of the two Libyans who were implicated in the Lockerbie bombing. We are usually more ambitious than that, what we are talking about here, in the case of Iraq, possibly even in Iran, indeed, and North Korea, would be much more ambitious than that, and yet you seem to cling on to the idea that there is some Holy Grail of sanctions that work. For example, you actually go so far as to say in your written evidence that if the thing had been done efficiently, technically, properly, and so on, with asset freeze, and so on, then the regime would have been severely weakened and perhaps would have collapsed. Do you really believe that?

  Mr Ross: Yes, really I do.

  Q144  Lord Lawson of Blaby: With what evidence? Where has this happened?

  Mr Ross: There is no similar example to Iraq, where you had a regime that was so wholly dependent upon one particular commodity for its survival, and that commodity was oil. We knew that Iraq was illegally exporting oil and thus garnering income for the regime, and I and other officials in the British and American Governments frequently argued that if we made an attempt to stop those flows that would severely undermine the regime from within. I do not think anybody disputed the logic of that argument in our Governments, but the practical measures to implement that were not taken, for the reasons I have explained to Lord Oakeshott.

  Q145  Lord Lawson of Blaby: You say there is nothing else like Iraq, but countries have other sources of income always. If you take Cuba, for example, in Cuba, Castro has been in power for well over 40 years, despite American sanctions designed to bring him down, and almost certainly would not have been in power for that length of time had sanctions not been there. This was not through smuggled oil revenues. He got a certain amount of money from the sugar which was sold in the Soviet Union, but that was not what kept him afloat. What kept him afloat was that he could always blame the Americans for any economic hardships or humanitarian difficulties which they suffered, and even to this day, and I was there not so long ago. Just an example of how totalitarian regimes work, which it seems to me was simply not grasped by the Foreign Office, if I may say so. In Cuba there are great hardships, a shortage of medicines. Médecins Sans Frontie"res and a number of other do-gooding agencies sent all sorts of drugs into Cuba. It is not happening now; those drugs never reached the people, because the Government control everything. If you are a tourist it is very convenient; if you are a tourist you can get the most wonderful medical care immediately in Cuba because Castro needs the foreign exchange, he needs a good tourist trade, and the poor Cubans, and you can talk to poor Cubans in the street, will say how their children are dying because they cannot get the drugs which you, as a tourist, can get. These are from Médecins Sans Frontie"res, and some people blame Castro for that, most of them blame the sanctions for all the hardships they suffer. The idea that somehow there is some Holy Grail, as I say, of sanctions that will work is not, I think, supported by the evidence in the real world. It is a nice little fairy tale which you and your former colleagues used to like to tell yourselves, that if only the British and the Americans were sensible they could do it properly and it would work. I do not think there is any evidence to support that, is there; if so, tell me?

  Mr Ross: I hold no brief to defend the Foreign Office these days.

  Q146  Lord Lawson of Blaby: We may have gathered that.

  Mr Ross: I dare say that I think the two examples are very different, and I think for important and significant reasons, which actually support my thesis rather than yours. Iraq was guilty of an egregious act, which was to invade Kuwait, and it was also found to be developing nasty weapons, and that was felt, by the international community, and not just America and the West, to be a very bad thing and that something should be done to stop them behaving in that way. At the outset there was enormous international support for control measures on Iraq, through the UN Security Council. Sanctions on Cuba, by contrast, are not supported by anybody except the US, and Cuba trades openly and widely with lots of other countries, so the pressure on Cuba is not very likely to succeed in overthrowing the regime or securing any other form of change in Cuba. I think that rather reinforces the thesis that I put in my evidence, that if you are ever going to be successful with sanctions you have got to have a wider international legitimacy for it. The case for Iraq, I think, does show that actually it was possible for a time—there was a period in the 1990s, and I think that period lasted quite long, into the late 1990s—where we could have secured wide international support for measures which targeted just the regime. I do not think Saddam, despite the claims of French and Russian allegiance to him, had any real allies in the world, and none that would have stood up and supported him in the Security Council. If we could have designed a package of measures which targeted the regime effectively and backed that up with very tough, coercive diplomacy with Saddam's neighbours, I think that had a chance of being successful, and I do not think that was a naïve view. I think, personally, that should have been given a try before sending 150,000 men in to invade. I think at least that would have been a reasonable thing to have attempted before going to war. It was never attempted, even though it was frequently suggested by the officials concerned.

  Q147  Lord Lawson of Blaby: Incidentally, you were aware that during that time Total, the great French international oil company, was busy getting all sorts of concessions in Iraq. I know this because at that time I was a member of the International Advisory Board of Total, and indeed my American opposite number was Paul Wolfowitz who resigned on that very issue because they were doing that. I think that the French definitely had a very different perspective right throughout?

  Mr Ross: They did, but they still voted for the sanctions measures in the Security Council; they did not feel justified in voting those things down, Total or no Total. There were particular clauses of the resolutions we called the Total Clause, because we were so aware of the French commercial interest in having particular measures passed. I think we allowed the political capital, which undoubtedly we had, to be wasted in the 1990s through a very crude and blunt instrument, namely comprehensive economic sanctions, which did not have as precise an effect as perhaps it could have done if we had taken a little bit more care with the engineering and enforcement of it. I do not think it is just about clever design and idealistic thinking about targeted sanctions. I do think it is also about a very consistent and muscular approach to diplomacy, where, as I argued in my evidence, sanctions enforcement over the years slowly dropped down the list. Even though our ministers claimed that containing Iraq was a primary security concern, very rarely did they raise the issue of sanctions enforcement with the countries concerned, particularly those countries breaching sanctions. I think that we should have developed a much more comprehensive and co-ordinated approach diplomatically to do that, and I do not think that is naïvety, I think it is pure pragmatism, and it could have been done.

  Q148  Lord Skidelsky: I feel that you do have a tendency in your evidence to suggest that better design and better technique could actually solve political problems. You say that sanctions should have pure objectives against which you can judge success and failure, but if you look at the sanctions imposed on Iraq, technically there was SCR 687, which required complete disarmament and it laid down what Iraq should do and would judge its behaviour according to those. That was the explicit objective, but the substantive objective was simply to disarm him, whether or not he complied with every dot of the resolution, every i and t. Then there was another objective, which was to get rid of him, so there was never any possibility, I would have thought, of getting a clear set of objectives out of the conflicting aims of the powers. On the first criterion the sanctions failed, on the second they succeeded, on the third they failed, because he was still there, so which was it that was important? I am not talking about the technical requirements that were imposed on him, but the substantive requirement was surely that he should never be a threat again, and in that respect they have succeeded. They were not recognised as having succeeded, because essentially there was a secret agenda.

  Mr Ross: I suppose that is true, but also, in terms of the stated objective, 687 actually succeeded as well. Iraq was disarmed of its weapons of mass destruction and medium-range missiles, as we discovered after the war, and, in fact, we believed before the war, though the Government said the contrary at the time.

  Q149  Lord Skidelsky: What I am suggesting is, so the failure had nothing to do with lack of muscular diplomacy. The failure and what led to the war was that there was a secret objective, which could not have been secured really—or I do not see evidence for it—by the type of diplomacy you are talking about, that is, actually to destroy the regime?

  Mr Ross: I beg to disagree. I think it was achievable. It is a rather complicated, technical argument.

  Q150  Lord Skidelsky: Technical?

  Mr Ross: Yes, in the sense that the regime was dependent upon $1½ billion to $2 billion worth of illegal oil imports. We knew exactly where these things were going out. They were going through a pipeline in Syria, they were going through trucks to Turkey, they were going through another pipeline to Jordan and they were going in ships, through the Gulf. We knew exactly where it was, we had satellite evidence of it, we talked to the oil traders who were buying it, we knew which companies were purchasing it, we knew which countries were supporting it, Turkey, Jordan, some of the Gulf countries, etc., etc. Yet when my Foreign Minister, or my Prime Minister, went to visit those countries he did not raise it. Tony Blair went to Syria, I think, in early 2002. He did not raise the pipeline, the illegal smuggling by Syria. Why did he not? Surely that was a possibility to shut down Saddam's source of illegal revenue; this surely was something that could have been done. I do not think it was na-£ve or impossible, far from it; we felt it was eminently possible. I felt, in the build-up to the war, that the Governments concerned were very dismissive of sanctions. I remember George Bush talking about sanctions being as full of holes as Swiss cheese. That was not our private view at all, in the State Department and in the Foreign Office. We felt that sanctions had been very effective in stopping Iraq from rearming, but they could be made even more effective in terms of denying funds to the Iraqi regime. And yet the hard technical work to make that a reality and the consistent and organised diplomatic work to enforce the embargo and finally get the neighbours to stop the illegal smuggling was never done. I do not see why it was so hard to persuade Turkey, for instance, to stop the smuggling over its border, especially if you offered them the binary alternative of a war. Which do you think Turkey would have preferred, the same for Jordan, or for the Gulf?

  Q151  Chairman: We have reached the point where perhaps it is not a good idea for you to be asking us the questions, rather than the other way round.

  Mr Ross: My question was purely rhetorical.

  Q152  Lord Lawson of Blaby: You were just saying that Saddam required export markets to get his funds, and therefore if you had stopped these markets somehow that would have had an effect, but your actual proposition in your written evidence is a two-part thing, that the funds then which had accrued overseas could have been seized and used to help the humanitarian effort in Iraq. Surely that is not suspect because there is no reason why Saddam would hold his funds in countries where he thought those assets would be seized, and if he thought they were going to be seized everywhere he would make sure that they were in banks in Iraq. You have this humanitarian problem, to which you alluded right at the beginning, whatever happened, the idea that you could not really have stopped the exports, which is difficult enough, because of the Syrian pipeline, and all of that. But you could actually have seized funds. That it would alleviate the humanitarian suffering really does beggar belief, because why would he allow his funds to be seized?

  Mr Ross: Because he would not have any choice. You would identify where they were, then you would go to the government concerned and say—

  Q153  Lord Lawson of Blaby: It would be repatriated before that? While you are discussing that with the countries, he knows you are discussing it, he will repatriate it?

  Mr Ross: This is one of the problems. You have to do it in secret and you have to do it stealthily and seize quickly. But it can be done. It was done with Milosevic quite successfully. The EU set up a unit that targeted his funds and found his assets and seized them. It can be done. You are slightly confusing the argument, if I may say so. The whole thing about denying him oil revenues was to stop him getting funds in the first place; if you had stopped him selling that illegal oil, that oil would have had to go into the UN escrow account and that would have increased the funds for the humanitarian programme.

  Q154  Lord Lawson of Blaby: It would have stayed in the ground?

  Mr Ross: Actually, it would not have; we looked into that. Once you have set up a certain pumping capacity, actually you have to keep pumping. You cannot just stop, you cannot just leave it in the ground. Otherwise you cause massive damage to your future capacity and we knew the Iraqis were concerned about that.

  Chairman: I think we are getting into more broad detail than our study. Really I think perhaps we ought to bring this to an end. You have given us a fascinating account of the world of which you have got a great deal of experience and we are very grateful to you for that, and thank you very much indeed for coming along.

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