Return to an Address of the Honourable the House of Commons
dated 18 July 1996 for the Appendices to the Report of the Inquiry into the Export of Defence Equipment and Dual-Use Goods to Iraq and Related Prosecutions laid before The House on 15 February 1996*

Volume One
Section D Arms and Defence-Related Exports to Iraq
Chapter 2 Applications of The Guidelines in the period
December 1984 to August 1988

Excerpt:
Specific Cases - (vi) The Iraqi Naval Base at Basra

D2.180 A South Korean firm obtained a substantial contract to construct a naval base at Basra. IMS wanted to bid for a £4 million consultancy contract to supervise the design and construction of the base. The proposals for the base included a 12 berth capacity for the repair and refurbishment of naval vessels. The MOD view was that the base would require a number of years work before it became serviceable and, in view of the negligible Iraqi navy, would represent an insignificant enhancement of Iraq’s naval capability. *269 Mr Lamont, in his letter dated 8 January 1986 to Mr Renton, sought FCO support for approval to be given to IMS to bid for the consultancy contract. Mr Renton, in his letter of reply dated 4 February 1986, had “no difficulty over this project”.

D2.181 DOR(Sea)RST’s advice, given on 18 February 1986, was that “building a naval base at Basra looks more loony every passing day that the Iranians advance.” 270 270 see MOD/9.2.15

D2.182 Permission was, therefore, given to IMS to bid for the consultancy.

D2.183 At a fairly early stage, IMS approached ECGD for credit support for the contract. In a letter dated 24 June 1985 to the Treasury, ECGD recommended that support be refused, first, because the contract was “undoubtedly of a military nature” and, secondly, because the naval base was “within the recognised war zone, thus presenting an unacceptable risk”. The FCO, too, did not consider the contract to be “a suitable candidate for cover under the Protocol” and the Treasury agreed that credit support should not be given. *271 In the event IMS was not awarded the contract *272 and no other UK company became involved. *273

D2.184 For the sake of completeness, I should record that no objection was raised to IMS carrying out the repair work at Iran’s Bandar-e-Abbas dockyard. DOR(Sea)RST advised that the repairs “are unlikely to have any more than a very marginal effect on the Iranian Navy’s operational capacity.”

Endnotes
*269 - see MOD/8.2.245 at paragraph 2(b)

*271 - see ECG/13.4.(Folio 47), ECG/13.4.(Folio 54) & ECG/13.4.(Folio 55)

*272 - see MOD/51.1.57 273 see MOD/1073

* The Full report is available from The Stationery Office Ltd., PO Box 276, London, SW8 5DT.