Smuggling Into Iraq Continues Despite War : Embargo: Officials cite 700 cases worldwide of attempts to sell goods to Baghdad. There are 20 in U.S.

Law enforcement and intelligence agencies have detected more than 700 cases in which firms and individuals worldwide have attempted to sell munitions and other goods to Iraq, including at least 20 cases since August in the United States, government sources have told The Times.

The efforts to circumvent the 5-month-old international embargo are believed to be continuing even in the midst of war--hostilities that pose greater dangers to smugglers, but also potentially higher profits.

The current estimates represent a marked increase from only a few weeks ago, when the sources said they had evidence of about 500 violations.

“There are sleazeballs out there who are out to make a buck,” said U.S. Customs Service spokesman Dennis Shimkoski. “It’s even more than (breaking the overall) embargo. We’ve got people trying to profit by sending munitions.”

Officials say that the cases they have detected may represent only a fraction of the violations.

It is unclear how many of the cases being investigated in the United States involve American businesses attempting to profit by trade with Iraq. Officials say they believe that foreign firms--particularly in Western Europe--are responsible for the vast majority of embargo violations.

“We have a long way to go to make these economic sanctions effective,” said Rep. Doug Bereuter (R-Neb.), a member of the House Intelligence Committee. “It is clear to me, on the basis of information that I have seen, that companies have violated the embargo in important ways.”

Nonetheless, officials insist, the embargo is proving tighter than any similar international effort in recent history, cutting off 90% of Iraq’s imports and 97% of its exports. Also, officials add, many efforts to violate the embargo have failed.

Over the past six weeks to two months, officials say, they have also noticed a marked change in the nature of items that Iraq is trying to secure from illicit suppliers--a shift that could indicate new areas where the international embargo is pinching the Iraqi economy.

Where Iraq’s initial smuggling efforts involved mostly food, investigators now are detecting attempts to procure an array of manufactured goods, ranging from ballpoint pens to steel.

U.S. Customs, which has jurisdiction over cases in this country, has 40 “ongoing investigations” involving Iraq, spokesman Shimkoski said.

Even before the gulf crisis erupted last August, it was illegal for U.S. firms to sell Iraq arms or other strategic items without a license. About half the 40 ongoing investigations were already under way before Iraq’s invasion of Kuwait, said Andrew Garlichs, acting director of strategic investigations for the Customs Service.

Violating the sanctions is a felony offense that could be prosecuted under numerous U.S. laws.

The Customs Service refers such cases to the Justice Department for prosecution. Asked whether it is looking into violations of the embargo, the department departed from its strict no-comment policy on pending criminal investigations to issue a statement that it has “for some time been centrally tracking cases which are pertinent to the Iraqi situation.”

While no indictments have yet been returned, the department promised a “strong and aggressive prosecutive response.”

Other agencies were similarly tight-lipped on the sensitive issue of tracking down and punishing embargo violators--a global law-enforcement problem that could put strains on the delicate international alliance against Iraq.

Officials, fearing that their intelligence-gathering methods might be compromised, also declined to be specific about the sources of evidence in the cases they have under investigation. However, much is believed to come from telephone and facsimile communications that are monitored by the government.

Garlichs said the Customs Service also relies upon information it gets from U.S. manufacturers of high-technology equipment and munitions, who often contact the agency when they suspect they have received an order from a source who plans to sell it illegally.

Garlichs also said that “some of our more clever inspectors” have spotted false documentation that disguises the true nature of some shipments and their ultimate destination.

German companies, accused of helping Iraq build such vital military assets as chemical weapons and even President Saddam Hussein’s bunker before the gulf crisis erupted, are also believed to be some of the most frequent violators of the embargo.

In December, the United States gave the German government a secret list of 50 German companies suspected of trying to sell Iraq items ranging from meat and milk to weapons parts. In recent weeks, complaints by the United States and other countries have more than doubled that list to 110.

In initial investigations, the German government cleared 25 firms of wrongdoing, and is expected to issue similar findings against another 30. Only nine of the cases have been referred for official investigation.

“We’ve had continuing problems with Germany,” said Rep. Bud Shuster (R-Pa.), another member of the House Intelligence Committee. “We are very disappointed.”

Shuster said a number of other countries are “leaking like sieves. Jordan, for example.”

Jordan, which shares a border with Iraq and has large numbers of Iraqi sympathizers among its population, was slow to apply the sanctions last August. Jordan’s King Hussein subsequently promised to vigorously enforce the international embargo.

Rep. Dave McCurdy (D-Okla.), another Intelligence Committee member, said he has seen evidence of “a lot of ground traffic” between Jordan and Iraq, which he assumes to be deliveries of Iraqi oil. However, McCurdy said he does not believe any such oil sales are large enough to significantly ease the financial bind that the sanctions have placed on Iraq.

Many analysts have noted that it would be impossible to completely shut off traffic into Iraq, which has thousands of miles of hard-to-patrol borders.

Bereuter noted that public reports have uncovered numerous examples of large quantities of food, produced after the embargo, appearing on Iraqi store shelves. If such bulky, low-profit goods can be shipped into the country, he said, “it is obvious that high-value small things could come in quite easily.”

Times staff writers Sara Fritz in Washington and Tyler Marshall in Berlin contributed to this report.