“Region” salaries.. Will localization end the problem?

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[size=52]“Region” salaries.. Will localization end the problem?[/size]

[size=45]The Ministry of Finance and Economy of the Kurdistan Regional Government announced the transfer of non-oil revenues of the Kurdistan Region to the bank account of the Federal Ministry of Finance.
The ministry stated in a statement that today, Thursday, an amount of (74,844,532,000) seventy-four billion, eight hundred and forty-four million, five hundred and thirty-two thousand dinars was transferred as the federal treasury's share of non-oil revenues of the Kurdistan Region.
The statement indicated that this amount is for the year 2024, noting that the General Directorate of Accounting of the Ministry of Finance and Economy transferred it to the bank account of the Ministry of Finance in the federal government, Erbil branch.
Last February, the Federal Supreme Court issued a decision obligating the Council of Ministers of the Kurdistan Region to hand over all oil and non-oil revenues to the Baghdad government.
Press sources reported that the court also decided to deposit the salaries of all employees of government agencies in the center and the region in federal banks.
They added that the Supreme Court's decision also includes "the obligation to submit the monthly budget of the region's employees to the Federal Ministry of Finance."
The beginning of the crisis
The Kurdistan Region had independent sources of funding for years from its oil exports. But since March 2023, those exports have stopped as a result of the decision of the arbitration panel of the International Chamber of Commerce in Paris, which ruled in favor of Iraq in its dispute with Turkey over oil exports from Kurdistan.
Following this decision, the region’s oil sales must pass through the federal government in Baghdad, in exchange for a percentage of the federal budget allocated to the Kurdistan Region.
In the ruling broadcast on state television, Chief Justice Jassim al-Amiri ordered the government in Baghdad to “localize the salaries” of all employees of the region in all ministries and public institutions, as well as retirees and beneficiaries of social welfare, “in federal government banks operating outside the region.”
He explained that these payments “are deducted from the region’s share specified by the budget law for this year and for the coming years.” The judge added that all parties concerned with this new mechanism must “implement” the decision “without referring” to the regional authorities.
Nearly a year after its suspension, oil exports from the Kurdistan Region remain suspended. However, the region, which has borders with Syria, Iran and Turkey, still receives revenues from several border crossings under its administration.
The General Secretariat of the Iraqi Council of Ministers called on the Ministry of Finance to stop disbursing any financial dues to the Kurdistan Region of Iraq, and to recover the funds spent in the past period; due to the region’s failure to pay the financial revenues due from the sale of oil extracted from the region during the past period.
An official letter sent by the General Secretariat of the Council of Ministers to the Ministry of Finance stated that the Kurdistan Region was required to pay the value of sales of no less than 250,000 barrels of oil per day to the Iraqi National Oil Company (SOMO), as stipulated in the federal budget for 2019, which was not achieved according to the confirmation of the national company, which had previously announced that it had not received any money from the Kurdistan Region in exchange for selling oil extracted from the region since 2019 until now.
Pay We pay
The federal budget law stipulates that the region will pay all its financial dues stipulated in the budget in exchange for selling 250,000 barrels of oil extracted from its territory and handing it over to SOMO.
The law also stipulates that any unpaid funds will be deducted from the region’s share of the budget.
In early September, thousands demonstrated in one of the region’s cities to protest the two-month delay in paying salaries, while residents and the regional government hold Baghdad responsible for this delay.
At the end of a cabinet session last year, the government in Baghdad agreed to pay three installments, each worth 700 billion dinars (about $530 million) to the Kurdistan region starting in September, according to a statement issued by the office of Iraqi Prime Minister Mohammed Shia al-Sudani.
These amounts will be paid to the region through loans granted by three public banks, and the Iraqi Ministry of Finance will repay them, according to the statement.
The statement indicated that these amounts aim to “provide financial liquidity to the Kurdistan Regional Government of Iraq, and enable it to pay the salaries of employees, those covered by social welfare, and retirees.”
The statement explained that the Federal Board of Supreme Audit, in coordination with the Board of Supreme Audit in the region, “must audit the numbers of employees, those covered by social welfare salaries, and retirees in the region” within 30 days.
Despite the Baghdad government releasing 500 billion dinars (about 380 million dinars) for the salaries of the Kurdistan Region in early September 2023, correcting the situation requires the monthly release of 900 billion dinars to pay salaries, according to the Erbil government. The
regional government has long accused the central government of not sending funds for the salaries of its civil servants.
At the end of 2019, Oil Minister Thamer al-Ghadhban said that an agreement had been reached with the regional government, stipulating that the region would hand over the value of its oil sales to SOMO starting in early 2020, at a rate of 250,000 barrels per day out of the 450,000 currently produced, in exchange for understandings that would allow the region to have a share in the country’s budget.
Decisions
The Federal Supreme Court (the highest judicial authority in Iraq) decided on 2/21/2024 to oblige both Mohammed Shia al-Sudani, the Prime Minister of the Federal Council, and Masrour Barzani, the President of the Kurdistan Regional Government, to localize the salaries of employees and workers in the public sector in federal banks.
The court also decided to oblige the submission of the monthly budget for the region’s employees to the Federal Ministry of Finance, while obligating the Council of Ministers of the region to hand over all oil and non-oil revenues to the federal government. An
informed source revealed on Thursday (May 16, 2024) the latest details regarding the localization of salaries of employees of the Kurdistan Region, amid the ongoing controversy and discussion over an accounting project.
The source said that “a delegation from the regional government will visit Baghdad to discuss the latest localization procedures, and branches of the Iraqi Trade Bank will be opened inside the region.” He
added that “according to the information, the Iraqi Trade Bank will localize 75% of employees’ salaries, while other banks in Kurdistan and the government exclusively bear the other percentage, with the Iraqi Trade Bank to begin localization in the coming days.”
Recently, the Kurdistan Regional Government announced that the Trade Bank of Iraq has joined the “Hisabi” project, which includes 6 different banks so far, while the number of employees whose salaries are domiciled in the “Hisabi” banks has reached 300 thousand employees out of more than one million employees in Kurdistan.
However, the Trade Bank of Iraq confirmed in a statement that its participation will be among the government banks based on the decision of the Federal Supreme Court to domicile the salaries of employees of the Kurdistan Region, without referring to the “Hisabi” project, indicating that it is still waiting for the Kurdistan Regional Government to send lists of the names of employees whose salaries will be domiciled with it, attached with supporting documents, in order to begin and implement the process. The
Federal Ministry of Finance began sending the salaries of employees and retirees of the Kurdistan Region last May, and the regional government began distributing salaries gradually.[/size]
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