According to the letter, Iraq maintained this account with the US Federal Reserve Bank, allowing it to receive oil revenues in dollars and utilize them to cover essential expenses in accordance with agreements with the United States.
A picture taken on March 25, 2024, shows the entrance of the Central Bank of Iraq in the capital Baghdad. (Photo: AHMAD AL-RUBAYE/AFP)
Iraq [url=https://www.kurdistan24.net/en/tag/central bank of iraq]Central Bank of Iraq[/url] CBI [url=https://www.kurdistan24.net/en/tag/oil revenue]Oil Revenue[/url] DFI [url=https://www.kurdistan24.net/en/tag/united states]United States[/url]
ERBIL (Kurdistan 24) – In a recent development that has raised concerns over the stability of the Iraqi economy, ""the United States has closed the account through which Iraq collects revenue from its oil sales"".
This revelation came to light through a letter addressed to the Finance Committee of the Iraqi Parliament, dated March 18, 2024.
The letter, signed by Ammar Khalaf, Deputy Governor of the Central Bank, outlines the closure of the account known as the Development Fund for Iraq (DFI), which has been operational since 2003.
The DFI, under the supervision and protection of the United Nations and the United States, served as a crucial mechanism for Iraq to collect and manage its oil revenues.
According to the letter, Iraq maintained this account with the US Federal Reserve Bank, allowing it to receive oil revenues in dollars and utilize them to cover essential expenses in accordance with agreements with the United States.
However, with the closure of the DFI account, """Iraq's oil revenue is now being directed to a new account, referred to as IRAQ2""". This transition raises concerns among experts, including finance and banking specialist Kamaran Qadir Yaqub, ""who warns that the protection previously afforded to Iraq's revenue may no longer be guaranteed.""
Yaqub emphasizes the risk that IRAQ2 could be vulnerable to potential interference or manipulation by the United States, posing a significant threat to Iraq's financial stability.
In addition to the closure of the DFI account, the letter also sheds light on a contractual arrangement between Iraq and a US company for the transportation of dollars from the United States to Iraq. Under this contract, Iraq paid a security deposit of $441,000, with a transportation fee of $216,310 for each convoy of dollars.
The closure of the DFI account and the implications for Iraq's financial security highlight the complex dynamics of international financial relations and the vulnerability of countries reliant on oil revenue. As Iraq navigates these challenges, stakeholders closely monitor developments to assess the impact on the country's economic stability and future prospects.
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KPMG audit. United Nations Resolution 1483 transferred the authority to authorize expenditures from Iraq's oil revenue from the United Nations to the Coalition Provisional Authority. It also created an international body to monitor the Coalition's expenditures from Iraq's oil revenue, the IAMB.
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The Central Bank of Iraq clarifies the mechanism for depositing oil revenues abroad
Central Bank of Iraq
Baghdad
The Central Bank of Iraq revealed the mechanism for depositing oil revenues abroad, in response to a parliamentary question on the subject.
The document stated that the legal basis for depositing oil revenues in the “IRAQ2” account with the Federal Reserve Bank in New York is the expiration of the extension of Executive Order issued by the US President No. 13303 in 2003, ""which granted immunity to Iraqi funds deposited in the “DFI” account"".
Deputy Governor of the Central Bank, Ammar Hamad, explained that the “IRAQ2” account is used to deposit funds for Iraqi crude oil exports, and they are transferred to the Central Bank of Iraq’s account at the Federal Reserve Bank within 24 hours of receiving them.
He stressed that this mechanism ensures that ""the funds are not exposed to creditor claims"", as they are funds belonging to the Iraqi government derived from the export of crude oil.
He added that a memorandum of understanding was signed between the Iraqi Ministry of Finance and the Central Bank of Iraq in 2014 regulating the work of the “IRAQ2” account, and that this memorandum is the legal basis for establishing the aforementioned account.
He pointed out that the immunity granted in accordance with the memorandum of understanding includes sovereign funds only, and does not include funds used for commercial purposes.
He explained that Iraq's foreign reserves are deposited with several external parties, including central banks and financial institutions, and are not limited to the Federal Reserve Bank.
He pointed out that the interest rates on these deposits vary according to the investment segment, the duration of the investment, and the institution with which the investment is made.
Finally, he explained that the company transporting the dollar from the Federal Reserve Bank to Baghdad International Airport is Orient, and that the insurance amount for one shipment is 414,000 US dollars, and that the transportation fees are 216,310 US dollars
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There is an interesting time frame involved here. Faud Hussein arrived in the USA on the 20th of March real close. The Development Fund for Iraq was effectlvely closed prior to that day on or about March 18, 2024. This action exposes Iraq to creditors from the past for debts owed. They are from my understanding extremely large.
I am not sure if there are protections in place that they have not spoken about yet. But, the fact they have made this move may be a very big indicator Iraq may have the ability to pay back debts owed in one way or another and it is no longer a concern for Iraq, as her financial situation is likely about to change significantly.
Notice in the data below where the DFI talks about currency exchange. Does the closing of the DFI account now allow for Iraq to have freedom to change her exchange rate to be incompliance with IMF Article VIII? We are about to find out. imo
We can see where the money came from to pay for things too, like infrastructure, energy, salaries, equipment, security forces, etc.. It is amazing to see just how complex this study is and has been over the many years. There are many things that become exposed over time, we never knew about.
Many quesitons get answered in our Patreon Forum with Militia Man & Crew and in their vibrant DISCORD Militia Man's chat room. Come and see they value they have to offer. ~ MM
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10:25 - 03/21/2024
A high-level Iraqi delegation headed by Foreign Minister Fuad Hussein arrived in Washington, DC, yesterday. (Note that would be 03/20/2024)
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03/26/2024 Snippet:
Hussein said in an interview followed by News that, “We had a frank meeting with the US Treasury, and they are not talking about sanctions on Iraqi banks, """but rather they are talking about taking some measures and reforming the banking system in Iraq,""” noting that “the delegation accompanying the Prime Minister, they will talk about this aspect."
He pointed out that "before the arrival of the Iraqi Prime Minister, there will be various committees to discuss energy issues, which include oil, gas, and electricity, committees on financial and banking issues, committees on how to provide services in the field of transportation, and a committee in the field of higher education, as well as in health." According to Fouad Hussein.
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03/30/2024 Snippet:
At the conclusion of the letter, the representatives demanded “""not to allow further transfers in US dollars to Iraq, until the Treasury Department confirms that such transfers do not benefit the Iranian regime or its agents.""”
Iraqi Foreign Minister Fuad Hussein conducted a visit that he considered “"successful"” in paving the way for common issues of concern to the two countries, after meetings with American officials.
""The minister considered the Iraqi talk about a “security and military partnership” between the two countries a change in the Iraqi government’s position on the issue of the future of American and international coalition forces, and ""a retreat from the demand for “immediate withdrawal.”"
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THE DEVELOPMENT FUND FOR IRAQ
General. The attached charts reflect information on the account balances, sources and uses of the Development Fund for Iraq (DFI), which is managed by the Coalition Provisional Authority (CPA), in consultation with the Iraqi Governing Council, the Iraqi Minister of Finance, and the Governor of the Central Bank of Iraq.
Background. United Nations Security Council Resolution 1483, dated 21 May 2003, sanctioned the establishment of the Development Fund for Iraq. http://www.un.org/Docs/journal/asp/ws.asp?m=s/res/1483(2003)
Resolution 1483 and the laws and usages of war, authorized the Coalition Provisional Authority as the administrator of the Fund. At the request of the CPA Administrator in May, 2003, the U.S. Federal Reserve Bank of New York established the "Central Bank of Iraq-Development Fund for Iraq" account. The DFI is held on the books of the Central Bank of Iraq. The corpus of the DFI is held in the account at FRBNY for the Central Bank of Iraq. A portion of the fund has been transferred to Baghdad, Iraq and used to establish a DFI-Baghdad account at the Central Bank of Iraq, for the purpose of meeting cash payment requirements in country, for the benefit of the Iraqi people.
International Advisory and Monitoring Board. The purpose of the International Advisory and Monitoring Board (IAMB) is to promote the objectives set forth in United Nations Security Council Resolution 1483 (2003) of ensuring that the DFI is used in a transparent manner for the purposes set out in paragraph 14 of that resolution and that export sales of petroleum, petroleum products and natural gas from Iraq are made consistent with prevailing international market best practices. The IAMB has the responsibility to approve the independent public accountants selected and appointed by the CPA to audit the DFI as required by UNSCR 1483. In this regards, the IAMB will perform functions similar to those of an external audit committees for the CPA. The IAMB website is: http://www.iamb.info/
Disbursements. To date, disbursements from the DFI have been in support of the wheat purchase program, ""the currency exchange program"", the electricity and oil infrastructure programs, equipment for Iraqis security forces, and for Iraqi civil ""service salaries and ministry budget operations"". | | | |
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