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Credit cards, crime gangs' path to "black money orders"
Iraq 2023/05/15
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Hoda Al-Azzawi
As part of its monetary policy to facilitate the needs of citizens traveling abroad, the Central Bank of Iraq issued a set of instructions, including the possibility of feeding credit cards and prepaying amounts in hard currency. Smuggling a large group of cards out of Iraq and withdrawing the available amounts in dollars, which leaves great effects on the Iraqi economy and the local market.
The Advisor to the Prime Minister for Financial Affairs, Dr. Mazhar Muhammad Salih, said in an interview with "Al-Sabah": "After the central bank controlled its quiet monetary policy firmly, facilitating external transfer in accordance with international compliance controls, and the great role played by the state's financial and economic policy in facilitating import tasks." Without restriction, we noticed that the exchange rate began to improve and the parallel exchange rate approached the official rate.
He added, "Unfortunately, organized crime gangs exploited travelers' credit cards, which are considered one of the means of financing and the traveler's need for foreign currency through a prepaid card or credit cards, as it allowed gangs to use citizens' passports illegally and unknown to generate cards that are smuggled out of Iraq." Its resources are withdrawn to create (black transfers) or smuggle money, and this is one of the methods of organized crime and money laundering that is punishable by law.”
And he indicated that "this process led to a temporary disturbance in the exchange rate, and in front of international compliance institutions with monetary policy," and indicated that the state's policy, deterrent measures, and the force of imposing order have played their role today to reduce this dangerous phenomenon and the manipulation of citizens' security as a result of economic crime, "stressing that" the situation It will be better in the coming days, and the Iraqi dinar is strong, and the exchange rate will improve again, as it started a few months ago.
Saleh continued, "The monetary authority is responsible for stabilizing exchange rates and communicating with international compliance communities to achieve ease and ease in the money transfer process while using cards in accordance with legal principles and in accordance with the required international compliance methods. form, which led to its exploitation by some weak-minded people,” noting that “there are institutional arrangements that will properly regulate relations until the parallel market exchange rate approaches the official one.”
For his part, the expert on economic affairs, Dr. Jaafar Baqir Alloush, said in an interview with "Al-Sabah": "The smuggling of credit cards is going in two directions; the first is by some merchants who evade the restrictions of the Central Bank and its new standards, and the second is by speculators who trade in capital." (dollars) with the intent of achieving capital profits from the price difference between the official and the parallel," pointing out that "trading in these cards is not only done by transferring them abroad or smuggling them, but also takes place inside Iraq."
He added that "the process is considered one of the illegal economic activities, and it even reaches an extent that can be likened to money laundering, in addition to the fact that the involvement of finance and exchange companies in the process of granting (dollar) credit cards expands the base of illegal operations, and contributes to the smuggling of dollars abroad under the pretext of financing trade." Ministry of Foreign Affairs," explaining that "these cards are directed towards countries that have intermediary banks to transfer Iraqi funds and are located in the UAE and Jordan."
and Turkey.”
In order to limit this pattern, Alloush indicates the possibility of "setting conditions for foreign trade, especially with regard to import controls related to the type of financing and restricting it to concerned official and legal authorities, in addition to the fact that the multiplicity of financing outlets creates opportunities for fraud by major local financiers who have relationships finance with foreign banks in the mentioned countries.
He noted that "this process falls within the circle of (the black financing market) and the state must deal with it with flexible and efficient means, just as government agencies, especially security ones, must monitor the communication networks from which smuggling tools and mechanisms feed," usually that "financing foreign trade is not a shameful matter, but To take the (black dye), as here lies its risks to the movement of domestic capital, and therefore (dollar) savings go abroad, and here the economy is infected with what we call negative savings.
Regarding the damages of these operations, Alloush stressed that they lead to "the erosion of national capital and the weakening of local investment capabilities, and may also affect the exchange rate gap remaining large and for longer periods than the monetary authorities can bear, and therefore the central bank has no choice but to increase the local money supply, and the issuance may be Cash is one of its tools, which exacerbates inflation rates.
Edited by: Muhammad Al-Ansari
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