Moscow and Baghdad are going ahead with a more than $4 billion deal that would make Russia Iraq's second largest arms supplier, Iraq's Foreign Minister said on Friday, contradicting reports the contract was scrapped over possible corruption.

Iraq was a lucrative arms market for the Soviet Union but considered off-limits to Moscow following the 2003 ouster of Saddam Hussein.

“In principle, both sides intend to fulfill this order,” Foreign Minister Hoshiyar Zebari told Interfax.

President Nuri al-Maliki last year announced the cancellation of the deal for military jets, helicopters and missiles from Russia but was then contradicted by the Acting Defense Minister who said the agreement was valid.

Last week the Russian state arms exporter Rosoboronexport said the deal had not been cancelled but had not yet entered into force and was waiting to pass through a series of legislative formalities.

“I think that it is a question of the distribution of money. It is necessary to pay in advance and we have a political crisis. Our budget for 2013 was not yet approved by the parliament,” Zebari said.

The arms agreements are a sensitive issue for Iraq. U.S. military hardware remains key for Iraq's Armed Forces, but the Russian deal appeared to open a way for al-Maliki to push back against U.S. pressure by diversifying his country’s suppliers.

 

Source: Reuters; Interfax