By John Lee.
Iraq's Supreme Judicial Council (SJC) has issued a clarification on ongoing proceedings related to a large-scale tax deposit fraud case, detailing convictions, asset seizures, and efforts to recover public funds.
According to the SJC, foreign companies operating in Iraq are required to deposit five percent of a project's value with the General Authority for Taxation as a guarantee of completion. They are entitled to withdraw the deposit within five years of project completion. Two Iraqi follow-up companies - Al-Qanit, owned by convicted defendant Nour Zuhair Al-Qanit, and Al-Mubdi'oun - withdrew these deposits using irregular procedures, triggering legal action against the companies' owners and the civil servants who facilitated the withdrawals.
The SJC said that Al-Qanit was released on bail under an agreement with the former prime minister and with the approval of the investigating judge, in exchange for repaying the funds in instalments against a reduction in sentence. Under this arrangement, IQD 365 billion (USD 279 million) was recovered out of a total of IQD 1.618 trillion (USD 1.24 billion) owed by Al-Qanit's two companies. The total amount withdrawn from Rafidain Bank by all companies involved in the fraud amounted to IQD 3.831 trillion (USD 2.92 billion).
Al-Qanit subsequently left Iraq and ceased repayments. An in absentia sentence of ten years' imprisonment was issued against him, and files have been submitted to Arab and international police directorates for his extradition.
Following amendments to the Amnesty Law, Al-Qanit's lawyers applied for him to be covered by the law in exchange for completing repayment of the outstanding balance. The Ministry of Finance, as the injured party, was consulted for its approval of a repayment mechanism, but has not yet responded. The application for amnesty remains pending until an agreement is reached.
In related proceedings:
- Twelve General Authority for Taxation employees received custodial sentences in absentia for facilitating the irregular withdrawals; they are currently serving their sentences, with the possibility of amnesty subject to payment of compensation to be determined by the Ministry of Finance.
- In absentia sentences were also handed down against the then-director of the prime ministerial office and a number of advisers; extradition files and arrest warrants have been issued.
- Custodial sentences were issued against non-civil-servant individuals who used connections with the then-finance minister to facilitate the withdrawals; their movable and immovable assets have been confiscated, including properties in Kuwait.
- The prime minister in office at the time of the fraud was investigated; proceedings were closed due to insufficient evidence.
The SJC also addressed a separate case involving North Refineries Company and detained defendant Adnan Al-Jumaili, along with a number of members of parliament. The SJC stated that the same procedures will apply if the offences were committed before the Amnesty Law came into force, provided the amounts owed are repaid to the relevant ministry. Offences committed after the Amnesty Law entered into force will be handled under different procedures, as they are not covered by the law. The SJC said it is working with the prime minister to develop a roadmap consistent with constitutional and legal mechanisms to achieve both the prosecution of offenders and the recovery of public funds.
(Source: Supreme Judicial Council)
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