Months after lifting Chapter 7 sanctions, Iraq takes delivery of its money from US

By Duraid Salman - March 31, 2014 16:00

Months after Chapter 7 sanctions have been lifted, the Central Bank of Iraq is finally getting ready to lift the American protection on the Iraqi money deposited in the United States of America. This step was welcomed by many but also stirred fear as it might be a qualitative step in the financial Iraqi sector. Will this money become an easy target to some authorities under the pretext of debt?

On May 20, 2014 the American protection imposed on the Iraqi money deposited in “Development Fund for Iraq” will be lifted and the responsibility will be transferred to the Central Bank of Iraq; after the Chapter 7 sanctions have been lifted. However, many fear that “gold digging” countries and traders would file lawsuits before an international court on the grounds that the pervious regime owes them money.

Postponing Protection

“Development Fund for Iraq is financed by oil revenues deposited in the Federal Reserve Bank and 5% of the amount would be deducted as indemnification for Kuwait according to Chapter 7 sanction imposed by the United Nations on Iraq”, says Central Bank of Iraq’s former Governor, Mathhar Mohammad Saleh. “Ever since the Central Bank of Iraq has taken responsibility of the Development Fund for Iraq in 2010; it has become unprotected which pushed Iraq to place it again under the American protection”.

“Iraq agreed with the USA to place this money under the American protection for a full year at the time, ie. until June 2011 after the sanctions were lifted on December 15, 2010 in virtue of resolution 1956; placing Development Fund for Iraq under the bank’s management”, added Saleh.

“This protection extension is the last of its kind”, mentioned Saleh; clarifying that “the protection of the Iraqi money deposited in the American banks is normal even if it wasn’t postpones especially that the Central Bank of Iraq is an independent entity and the money it manages is not used in speculations or trade”.

Putting fears to rest

Central Bank of Iraq’s Acting Governor Abdul Bassit Turky puts fears of wasting away Iraqi money in the US to rest by confirming that “American’s protection of Iraqi money will end on the 22nd of May, 2014”.

“The Iraqi money deposited in the US has been under its protection for 2 years”, clarified Turky pointing out that “people’s claim to the previous regime’s debts are not a threat to Iraqi resources”.

“The important issue that Iraq was facing with the Kuwaiti airlines has been solved. Consequently the issues that might be raised now are far fewer than those possibly raised 5 years ago”, added Turky. “Now, Iraq can defend its resources with the help of lawyers and international councilors and advisors”, he stressed.

Business , Special Reports
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