Posted on 05 July 2011.
Further to the recent news regarding the transfer of control of the Development Fund for Iraq from the UN to Iraqi control, full details of the final meeting of the International Advisory and Monitoring Board (IAMB)‘s last meeting in Amman, Jordan, on 30th June, are attached below.
(Source: International Advisory and Monitoring Board)
Posted in Banking & Finance
Posted on 01 July 2011.
The passing of control of the Development Fund for Iraq (DFI) to the Iraqi government may make the assets vulnerable to seizure.
A lawyer for Kuwait Airways told Bloomberg in an interview that “the class of assets against which we can seek enforcement has expanded.”
Christopher Gooding (pictured), a partner at London-based Fasken Martineau, said:
“Despite pleas to the contrary, Iraq is an extremely rich country … Its trading assets are available worldwide, and it remains our intention to seize Iraqi assets whenever and wherever they are available.”
Iraq amassed about $130 billion in debt under Hussein; it owes Kuwait about $21 billion and carries a significant debt to Qatar and Saudi Arabia. It continues to pay into the UN compensation fund.
“For anyone with unpaid debts with Iraq, this is a very significant development,” Stephen Fietta, a solicitor at Volterra Fietta in London, said in an interview.
Most legal jurisdictions recognize the ability of creditors to seize debtors’ assets as a means of debt enforcement. A sophisticated creditor may be able to track Iraqi cargo and try to seize it as it enters a port, or upon its discharge, he said.
“The risk might be minimized if the legal title was transferred by the Iraqi government before the oil was shipped,” Fietta said. “So there are ways around this, but the constant risk of seizure and enforcement can become a real headache for sovereign debtors, just as for private ones.”
(Sources: Bloomberg, UPI)
Posted in Industry & Trade, Oil & Gas
Posted on 01 July 2011.
The United Nations Security Council welcomed the Iraqi Government’s assumption of full autonomy, with effect from 1st July, over the proceeds of a development fund set up after the 2003 United States-led invasion to meet the country’s humanitarian needs, economic reconstruction and infrastructure repairs.
In a press statement, the Council welcomed the Government’s establishment of a successor arrangement for the transition of the Development Fund for Iraq, in line with the United Nations body’s resolution 1956, adopted last year.
“The members of the Security Council noted that, in this regard, oversight of the full proceeds from the Development Fund for Iraq has been transferred from the International Advisory and Monitoring Board to the Government of Iraq’s Committee of Financial Experts, which will exercise authority in accordance with its terms of reference approved by Iraq’s Council of Ministers,” according to the statement, read out by Ambassador Alfred Moungara Moussotsi of Gabon, which holds the Council’s presidency in June.
The Council reiterated its appreciation of the ongoing efforts and commitment of the Iraqi Government to ensure that oil revenues are used in the interest of the country’s people, and to ensure that transition arrangements remain consistent with the constitution and with international best practices with regard to transparency, accountability and integrity.
“The members of the Security Council underscored the importance of Iraq’s continued compliance with relevant [Security Council] resolutions,” the statement added.
The Council set up the trust fund in May 2003 so that oil and other revenues could be paid into it, to be disbursed at the discretion of the then US-led Provisional Authority for humanitarian and economic reconstruction, replacing the previous oil-for-food programme that allowed the sanctions-bound government of Saddam Hussein to use some oil revenues for the monitored purchase of humanitarian supplies.
(Source: United Nations)
Posted in Banking & Finance, Oil & Gas
Posted on 29 June 2011.
There was more sabre rattling on the Iraqi political scene this week, as the Speaker of parliament, Osama al-Nujaifi, hinted at the possibility of a break-away Sunni state.
His statements follow indications, finally, from Prime Minister Nouri al-Maliki to the effect that ministerial heads may metaphorically roll as a result of their poor performance.
These stories, against a background of increasing violence, have perhaps distracted attention from the fact that the Development Fund for Iraq (DFI), which was set up after the 2003 war to handle oil and other revenues, reverts to Iraqi control from tomorrow, 30th June.
The sums involved are immense, and it is essential that they are handled professionally. We can expect some clarification from the International Advisory and Monitoring Board (IAMB) on Thursday regarding the future management of the fund.
Posted in Politics