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Published on Nov 10, 2012 by RussiaToday
FULL STORY http://on.rt.com/v4hvop
The Iraqi Defence Minister has denied that the country has cancelled a major arms deal with Russia. It's in response to the Prime Minister's spokesman who'd earlier said corruption concerns caused the scrapping of a deal sealed only a month ago, to sell Iraq more than 4-billion-dollars' worth of military hardware.
RT talks to government and business consultant, Christoph R. Horstel.
Iraq buys $4.2 billion in Russian weapons-document
Tue, 9 Oct 2012 19:05 GMT
Source: reuters // Reuters
* Big boost for Russia as arms seller
* U.S. State Department says not concerned by deal
By Olesya Astakhova
GORKI, Russia, Oct 9 (Reuters) - Russia announced on Tuesday it has signed $4.2 billion in arms deals with Iraq, making it the largest weapons supplier to the Middle East country after the United States.
The deals, disclosed in a Russian government document issued at a meeting between Prime Minister Dmitry Medvedev and Iraqi Prime Minister Nuri al-Maliki, give Russia a big boost at a time when the future of its arms sales to Libya and Syria is uncertain.
Iraq had been all but off limits for Russia's defence industry after the U.S.-led invasion of 2003 which ousted Saddam Hussein, one of Moscow's biggest weapons customers.
President Vladimir Putin had vocally opposed the invasion and Moscow has struggled to claw back a share of the markets in energy, arms sales and infrastructure projects in Iraq.
"After the fall of Saddam Hussein, it looked like the country was lost forever" as a Russian arms customer, said Ruslan Pukhov, director of the Russian security and defence think tank CAST. "This is absolutely sensational."
The contracts will help Russia maintain its position as the world's second-biggest arms seller after the United States, Pukhov said.
In Washington, the U.S. State Department signaled it was not overly concerned by the Russian deal.
"Iraq overall has initiated some 467 foreign military sales cases with the United States. If all of these go forward, it will be worth over $12.3 billion, so obviously our own military support relationship with Iraq is very broad and very deep," State Department spokeswoman Victoria Nuland told a news briefing.
The contracts were signed during visits to Russia by Iraq's acting defence chief in April, July and August, the document showed. It gave no further details and the state agency in charge of the weapons trade could not be immediately reached.
The Russian newspaper Vedomosti reported late last month that contracts worth $4.3 billion were being agreed ahead of Maliki's visit. It said they included deals for 30 Mi-28NE combat helicopters and 42 Pantsir-S1 mobile rocket launchers.
A spokesman for Russia's state-controlled arms exporter, Rosvooruzheniye, said it never discusses content of arms deals.
The contracts comprised the third biggest package of deals for Russian arms sales since the 1991 Soviet collapse, after a $7.5 billion agreement with Algeria in 2006 and a $6 billion sale to Venezuela in 2009, CAST said.
Russia delivered about $13.2 billion in weapons last year, said Konstantin Makiyenko, an expert at CAST.
Pukhov said the Iraq deals showed the government there "is ready to pursue an independent foreign and defence policy", but that the United States could have tacitly supported them to appease Russia, which scrapped a deal to sell air-defence systems to Iran citing U.N. sanctions over Tehran's nuclear programme.
Russian officials also have said Russia lost about $4 billion in arms deals with Libya because of the fall of longtime leader Muammar Gaddafi, and the future of Russian sales to Syria is uncertain because of the conflict there.
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UPDATE 3-Iraq scraps $4.2 bln Russian arms deal, cites graft
Sat, Nov 10 15:35 PM EST
* Maliki cancels arms deals over suspected corruption
* Acting defence minister denies charges
* Russian deals seen helping Iraq with US pressure
By Suadad al-Salhy
BAGHDAD, Nov 10 (Reuters) - Iraq said on Saturday it had cancelled a $4.2 billion deal to buy military jets, helicopters and missiles from Russia, citing possible corruption in the contract.
In a confusing exchange, the announcement by Prime Minister Nuri al-Maliki's office was immediately contradicted by the acting defence minister who denied the corruption charges and said the Russian arms deals were still valid.
The arms agreements were a sensitive issue for Iraq. U.S. military hardware remains key for Iraq's armed forces, but the Russian deal had appeared to open a way for Maliki to push back against U.S. pressure by diversifying his arms suppliers.
The Russian sale was agreed just as Washington warned Maliki, who is close to Shi'ite Iran, to curb Iranian flights ferrying weapons through Iraqi airspace to aid Syrian President Bashar al-Assad in his fight against a revolt there.
Maliki's media adviser Ali al-Moussawi said the decision to renegotiate the agreements was taken after the prime minister was informed about possible wrongdoing in the contract.
"Our need for weapons still stands so we will renegotiate new contracts," Moussawi said. "This is a precautionary measure because of suspected corruption."
But acting Defence Minister Sadoon al-Dulaimi, who negotiated with the Russians, dismissed the corruption charges and said the deals would go ahead.
"We have not transferred even one dinar, there was no agent, no contract was signed. These were just technical and financial offers," he told reporters in Baghdad.
Russian arms exporter Rosoboronexport declined to comment. Russia's Interfax news agency reported the Russian embassy in Iraq said it had not been informed the deal had been scrapped.
The initial announcement about the deal itself was unusually released in a Russian government document issued to reporters during Maliki's visit to Moscow in October. The document said deals were signed with Iraq's acting defence minister in April, July and August.
Russia's daily Kommersant said the contract envisaged the delivery of surface-to-air missile and anti-aircraft artillery weapon systems, MiG-29M/M2 aircraft as well as armoured vehicles and attack helicopters.
NO. 2 IN IRAQ
The deals would have made Russia the second largest military supplier to Iraq after the United States, which has sold Baghdad billions of dollars in arms including F-16 fighters and tanks since the 2003 invasion that ousted Saddam Hussein.
But the Russian agreements fit into the wider context of Maliki's juggling interests over the war against Syria's Assad. Iran and Russia support Assad, while the rebels fighting him are backed by Saudi Arabia, Turkey and Western powers.
Maliki relies on the United States for military aid, but also depends on Iranian influence at home to keep control over Shi'ite allies in his fragile cross-sectarian government of Shi'ites, Sunnis and Kurds.
"One should not rule out pressure from the United States, which certainly does not want to let the Iraqi government - a buyer of American arms or arms from suppliers that are U.S. allies - out of its zone of control," said Ivan Konovalov, a military expert in Moscow.
News of the cancellation also came at a time when Russia has been entangled in a series of corruption scandals involving its defence ministry and its space ministry.
On Friday, President Vladimir Putin fired the chief of his military staff, days after sacking the defence minister over a corruption and sleaze scandal. [ID: nL5E8M97F1]
Iraq had been off limits to Russian defence contracts after the U.S.-led invasion that overthrew Saddam Hussein. The Sunni dictator had been one of the biggest customers for Russian arms.
=====
Iraq denies cancelling $4.2 bln arms deal with Russia over 'corruption concerns'
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Published: 10 November, 2012, 14:41
Edited: 11 November, 2012, 00:12
TAGS:
Arms, Military, Russia, Iraq, Corruption, Sean Thomas, Lucy Kafanov
Russia's Prime Minister Dmitry Medvedev (L) shakes with his Iraq's counterpart Nouri Al-Maliki during meeting in the Gorki residence outside Moscow, on October 9, 2012 (AFP Photo / RIA Novosti / Pool / Yekaterina Shtukina)
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Iraqi Prime Minister's spokesperson Ali Mussawi told RT that the deal hasn't been cancelled, it is simply under review. He also confirmed it was because of earlier allegations of corruption from the Iraqi side.
Iraqi Defense Minister Saadun al-Dulaimi also confirmed that there was no cancellation of the agreement.
"The deal is going ahead," he said.
Earlier, media reports claimed the deal – which would have made Russia Iraq’s second-biggest arms supplier after the United States – was cancelled.
“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,”Iraqi Prime Minister Nuri al-Maliki's spokesperson Ali Mussawi said.
The deal – which was signed by Russian Prime Minister Dmitry Medvedev and Maliki in October – will either be go through or be cancelled only after the Iraqi anti-corruption committee presents it findings.
Officials in Moscow have not yet commented on the matter. The Russian embassy in Baghdad said it has not received word from the Foreign Ministry, and was not informed about the cancellation by Iraqi officials.
The sale was signed by Russian Prime Minister Dmitry Medvedev and Maliki in October, and would have made Russia Iraq’s second-biggest arms supplier after the United States.
The deal is one of the largest in both the modern history of Russia and for postwar Iraq.
Experts speculated that the package likely would have included shipments of aircraft, helicopters, armored vehicles and air defense weapons.
Though the details of the deal were kept secret, military analysts believe it was competitive enough to spark concerns in Washington, the primary arms dealer for Iraq.
Military experts speculated that the deal may be cancelled due to pressure from Washington, and may result in punitive sanctions.
Director of the Center for Analysis of World Arms Trade Igor Korotchenko told RIA-Novosti news agency that if the deal does get axed, it would be an unprecedented event in the history of Russia's arms trade
“Self-respecting states and governments don’t act this way,” Korotchenko said.
RIA-Novosti also quoted an unnamed arms expert who warned that Iraq may incur harsh sanctions for the move: “If the deals were drawn up in a proper way from the legal point of view, the Iraqi side may suffer multi-million dollar losses by paying off punitive fees.”
The expert went on to add that statements about suspected corruption have never been a legitimate basis for the annulment of contracts, especially in military-technical cooperation.
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