Bush may lift sanctions on his own, despite opposition

The Bush administration is studying whether to lift US sanctions on Iraq unilaterally – a move likely to put it on a new collision course with France, Russia and other members of the UN Security Council.

A legal team led by the National Security Council at the White House is examining such a step and its likely ramifications in international law, the Wall Street Journal reported yesterday.

The sanctions, in force in one form or another since the first Gulf War in 1991, have been caught up in the intricate dispute over the role of the UN in post-Saddam Iraq. This is in turn related to the vexed issue of the former regime's alleged stocks of unconventional weapons, none of which have been found in the four weeks since the fall of Baghdad.

The US has made clear it considers sanctions are irrelevant now that the regime they were designed to punish no longer exists. But Washington's demands that they be immediately lifted have run into strong objections from Moscow and Paris, which insist that they may be scrapped only by the Security Council after UN inspectors have confirmed that Iraq is weapons-free.

The dispute has prompted a legal debate, and the risk of lawsuits over the ownership of Iraqi oil which comes to the market – and which Washington intends to be a major source of reconstruction finance.

An important date is 3 June, when the current extension of the 1995 oil-for-food programme, allowing Iraq to sell oil for UN-approved imports, expires. British and US diplomats are discussing whether to introduce a Security Council resolution to get rid of sanctions as early as this week.

But although France and Russia, as well as Secretary General Kofi Annan, favour lifting them "in principle," there is absolutely no guarantee of quick passage.

For the time being, US equipment that would have been barred under the sanctions regulations is getting through, thanks to a blanket waiver here for government agencies, first and foremost the Pentagon, administering what is described as "humanitarian assistance".

But that state of affairs is unlikely to continue indefinitely. Sooner or later, as reconstruction work led by ordinary commercial companies gets under way, a decision will have to be made as to what is allowed.

One case that could show the way is Bechtel, the San Francisco-based civil engineering group, which won a $680m (£423m) contract – the largest so far issued by the US Agency for International Development (USAID) – for infrastructure projects. But Bechtel is waiting for the legal picture to clear before it moves from surveying work to bringing in heavy equipment for repair and rebuilding work to begin.

With complaints from Iraqis growing louder at the slow return of basic services and reports of hostility to occupying US and British forces, Washington wants to remove all obstacles to the inflow of goods and equipment. "If the UN embargo drags on too long, we will have to find a way out of that system," a senior administration official told the WSJ.