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By John Lee.

In its results for the first nine months of 2014, Qatari telecom provider Ooredoo has reported that revenues at its Iraqi unit Asiacell are down 10 percent.

The company gave the following update on operations in Iraq:

"Asiacell continued to face the challenge of political and social instability during the period, allied to the effects of an increasingly competitive market.

"Consequently, revenue for the nine months of 2014 was QAR 4,804 million (9M 2013: QAR 5,309 million), a decrease of 10%; EBITDA was down by 19% to QAR 2,272 million and EBITDA margin was also down to 47% from 53%. Customer numbers increased by 16% to 12.3 million.

"Growing levels of insecurity have impacted corporate and data revenue moderately. Asiacell has continued to focus on a number of cost efficiencies during the period in the face of growing competition. Asiacell continues to monitor the situation carefully and has a range of contingency plans in place to ensure the continued operation of the business."

(Source: Ooredoo)

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Spokesman For Iraqi Kurdish Govt: ‘New US Airbase in Erbil No Threat To Iran’

NIQASH interviewed Safeen Dizayee, the spokesperson for the government of semi-autonomous Iraqi Kurdistan. During a candid and wide ranging conversation, Dizayee spoke about why the US is building a new airbase in the region, where exactly Iraqi Kurdish oil is going and whether refugees in the region are being maltreated.

Over the past few months, Iraqi Kurdistan has come under attack from Sunni Muslim extremists in the group known as the Islamic State, it has become home to over a million refugees and it has also been subject to a “financial blockade” by the Iraqi government in Baghdad.

NIQASH held a wide-ranging conversation with Safeen Dizayee, the spokesperson for the Iraqi Kurdish government in the semi-autonomous northern region and a member of the region’s biggest political party, the Kurdish Democratic Party.

The conversation covered everything from the establishment of a new US air base in Iraqi Kurdistan to whether Iraqi Kurdish authorities were discriminating against Arab refugees. He also discussed whether Iranian and Turkish reactions to Iraq’s security crisis were adequate as well as where exactly Iraqi Kurdish oil was being exported to, and how much of it was going there.

Dizayee also commented on whether Iraqi Kurdish authorities might be getting any closer to resolving their long standing disputes with the government in Baghdad, especially now there is a new Prime Minister in charge.

The conversation has been split into three parts for ease of reading.

On US Plans To Build Air Base in Erbil

NIQASH: Apparently the US has also decided to build a military base – maybe more than one – in Iraqi Kurdistan. What can you tell us about this?

Safeen Dizayee: Discussions are continuing about the specifics of this issue. Nothing has happened on the ground as yet.

NIQASH: Would this base be a substitute to the nearest US base, the Incirlik Air Base in Turkey?

Dizayee: No. Incirlik Air Base is a NATO base and it will remain so. The prospective air base in Erbil is in order to confront the IS group in the nearby area.

NIQASH: Do you think that the Iranians will see this as a threat to their influence in the region?

Dizayee: Incirlik Air Base and other US military bases in the Gulf States - in places like Bahrain, Qatar, Kuwait and the United Arab Emirates – are also close to Iran. The base to be built in Erbil is all about fighting the IS group, not about confronting Iran, or any other country, in any way. We have stressed time and again that we don’t want Iraqi Kurdistan to become a battlefield for major powers in the region.

By John Lee.

Newly-appointed prime minister Haidar al-Abadi has called for an end to the boycott by a number of governorates of products from neighbouring countries, including Saudi Arabia.

He urged those provinces to instead develop their economies through regional cooperation, particularly with neighbouring states.

A number of provincial councils, including Baghdad, Basra and Najaf, had taken a decision to boycott products from Saudi Arabia, Turkey and Qatar and gave merchants a month to get rid of the products without affecting the sale of basic commodities.

Meanwhile, a number of other governorates called for boycotting Iranian products, in protest of Tehran’s meddling in Iraqi affairs.

(Source: Al Arabiya)

(Flag image via Shutterstock)

By Mark DeWeaver.

It’s been lackluster year for the ISX-listed banks. Total pre-tax profit for the 12 non-Islamic lenders that have reported so far fell 12% in the first half on a 3% decline in operating revenue, an 8% increase in operating expense, and a 21% increase in administrative expense.

Earnings dropped at 7 of the 12, with heavyweights Iraqi Middle East Bank (BIME), North Bank (BNOR), Qatar National Bank subsidiary Al Mansour Bank (BMNS), and Burgan Bank subsidiary Bank of Baghdad (BBOB) showing the steepest declines (see chart.)

Falling earnings are unsurprising given the deterioration in the security situation, the central government’s continuing failure to pass a 2014 budget, and, particularly for North Bank, the fiscal crisis in Kurdistan. Months before the fall of Mosul in early June, the banks’ trade finance businesses were already slowing as a result of disruptions to truck traffic from Jordan and Turkey.

At the same time, the budget delay has led to a slowdown in construction—another key sector for the banks—while in the Kurdish region the entire state sector appears to be running out of money.

The direct effect of lost business from branches in what are now ISIS controlled areas is probably quite small, however. For the 14 banks for which earnings breakdowns by province are available, Rabee Securities has calculated that the total contribution attributable to Mosul, Anbar, Kirkuk, Salah Ed Din, and Dyala came to just 2.2% of aggregate pre-tax profit. (Mosul Bank and Economy Bank, where the contributions were 30.9% and 29.6%, respectively, are important exceptions. So far neither has released first half results.)

This suggests that rolling back ISIS territorial gains is not necessarily a prerequisite for a recovery in bank earnings growth. Even with a continuation of the status quo, there could easily be a rebound next year if Parliament passes a budget, payments to the KRG are resumed, and progress can be made in reopening major highways and/or rerouting trade around danger zones.

The hit to bank earnings is likely to be only temporary.

By John Lee.

Hellfire Systems LLC, of Orlando, Florida, has been awarded a $68,721,521 [80 billion Iraqi dinar] modification (P00104) to firm-fixed-price, foreign military sales contract W31P4Q-11-C-0242 to acquire 1,361 Hellfire II tactical missiles in containers and air-to ground missiles: model AGM-114R, AGM-114R-3, AGM-114P-4A, TGM M36E7, and ATM-114Q-6.

The countries involved in this foreign military sales contract are Iraq, Jordan, Indonesia, Saudi Arabia and Qatar.

Fiscal 2012, fiscal 2013 and fiscal 2014 other procurement funds in the amount of $68,721,521 [] were obligated at the time of the award.

Estimated completion date is Nov. 30, 2016. Work will be performed in Orlando, Florida. Army Contracting Command, Redstone Arsenal, Alabama, is the contracting activity.

(Source: US Dept of Defense)

At an international conference in Paris, the five permanent members of the U.N. Security Council, representatives of European and Arab states, and representatives of the EU, Arab League and United Nations, have all pledged to help the government in Baghdad fight against Islamic State militants.

The full statement from the French Ministry of Foreign Affairs is shown below:

Communiqué from the Ministry of Foreign Affairs and International Development

Paris, September 15, 2014

1. At the invitation of the President of the French Republic and the President of the Republic of Iraq, an international conference on peace and security in Iraq was held today in Paris.

2. The conference participants (Bahrain, Belgium, Canada, China, the Czech Republic, Denmark, Egypt, France, Germany, Iraq, Italy, Japan, Jordan, Kuwait, Lebanon, the Netherlands, Norway, Oman, Qatar, Russia, Saudi Arabia, Spain, Turkey, United Arab Emirates, United Kingdom, United States of America, Arab League, European Union, United Nations) expressed their commitment to the unity, territorial integrity and sovereignty of Iraq. They welcomed the formation of a new government under the authority of the Prime Minister, Mr Haïdar al-Abadi, and offered him their full support to strengthen the rule of law, implement a policy of inclusiveness, and ensure that all components are fairly represented within the federal institutions and all citizens are treated equally. All of these measures are necessary in order to successfully combat Daech (ISIL) and terrorist groups, which represent a threat to all Iraqis.

3. The conference participants asserted that Daech (ISIL) is a threat not only to Iraq but also to the entire international community. They condemned the crimes and acts of mass violence that Daech (ISIL) commits against civilians, including the most vulnerable minorities, which may amount to crimes against humanity. They agreed to cooperate and do everything to ensure that the culprits are brought to justice. They confirmed support for the inquiry led by the Office of the High Commissioner for Human Rights to that end.

UNESCO officials concluded a series of meetings held with director generals in Ministries of Education in the central government in Baghdad and the Kurdistan regional government, as well as representatives from local NGOs, to discuss ways to enhance cooperation and accelerate the implementation of UNESCO programmes targeting 10,000 out-of-school children and youth in Iraq.

“UNESCO is committed to extend its technical and financial support to related Ministries to allow 10,000 IDPs children and youth re-enroll in academic institutions”, stated Zulfiqar Ali, Education Project manager in UNESCO Office for Iraq. “Providing a learning opportunity for all children and youth, and making sure that their education is not interrupted by displacement is a main priority for UNESCO in this stage, and a pillar for its projects in Iraq”, he added. UNESCO’ expert’s statement came following his three days’ meetings with the Iraqi officials from 5 to 7 September 2014 in the city of Erbil, in the Kurdistan region of Iraq.

UNESCO’s response is based on two main projects focusing on schools renovation, reconstruction, examination, organizing catch-up classes and providing psychosocial support. With the aim to guarantee IDPs’ children and youth right to quality education, UNESCO Office for Iraq is implementing the “Educate A Child Initiative (EACI) in Iraq” and “Providing access to quality education to adolescents and young adults in conflict affected areas in Iraq”, two pioneering initiatives funded respectively by the governments of Qatar and the Kingdom of Saudi Arabia. These interventions will provide access to education for internally displaced out-of-school children and youth at primary and secondary level in camps, as well as in host communities in Iraq.

Dr. Yousif Othman, Director General of Educational Planning, at the Ministry of Education in the Kurdistan regional government praised UNESCO efforts, and stressed that “schools used as shelter by IDPs need to be evacuated, and UNESCO already committed to renovate and reconstruct secondary schools for IDPs children and youth allowing them to start schooling from new academic year”.

By Patrick M Schmidt.

The United States Treasury has announced that its Terrorism and Financial Intelligence Unit has imposed sanctions on Kuwaiti citizens who are believed to be routing funding to militant groups in Syria and Iraq. The two groups have been identified as the Nursa Front and the Islamic State of Iraq and the Levant (ISIL).

“We and our international partners, including the Kuwaiti government, need to act more urgently and effectively to disrupt these terrorist financing efforts,” said David Cohen, Treasury's Undersecretary for Terrorism and Financial Intelligence.

Mr. Cohen has previously called out Kuwait and Qatar for their roles in funding extremist activity in the region.

The full statement from the U.S. Department of the Treasury is shown below, along with details of the three men:

The U.S. Department of the Treasury today imposed sanctions on three key terrorist financiers under Executive Order (E.O.) 13224.  Two of the individuals designated today, Shafi Sultan Mohammed al-Ajmi and Hajjaj Fahd Hajjaj Muhammad Sahib al-‘Ajmi, are Kuwait-based and support the Syria-based, al-Qaida-linked terrorist organization Al Nusrah Front (ANF); one individual, ‘Abd al-Rahman Khalaf ‘Ubayd Juday’ al-‘Anizi, is a financier and facilitator of the Islamic State of Iraq and the Levant (ISIL), previously known as al-Qaida in Iraq (AQI).

Each has been designated as a Specially Designated Global Terrorist (SDGT).  ANF and ISIL continue to receive donations from private citizens located predominantly in the Arabian Peninsula to fund their operations.  Today’s actions target individuals who play key roles in the external financing and facilitation of terrorists in Syria and Iraq, including particularly dangerous foreign fighters.

“Through fundraising appeals on social media and the use of financial networks, Shafi al-Ajmi, Hajjaj al-‘Ajmi, and al-‘Anizi have been funding the terrorists fighting in Syria and Iraq,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen.  “We and our international partners, including the Kuwaiti government, need to act more urgently and effectively to disrupt these terrorist financing efforts.”

Shafi Sultan Mohammed al-Ajmi

Al-Ajmi operates regular social media campaigns seeking donations for Syrian fighters and is one of the most active Kuwaiti fundraisers for ANF.  In July 2014, he publicly admitted that he collected money under the auspices of charity and delivered the funds in person to ANF.  Al-Ajmi also acknowledged purchasing and smuggling arms on behalf of ANF.

Hajjaj Fahd Hajjaj Muhammad Shabib al-‘Ajmi

Hajjaj Al-‘Ajmi serves as a funnel for financial donations to ANF facilitators in Syria, traveling regularly from Kuwait to Syria to engage in financial activity on behalf of ANF and deliver money to the group.  He agreed to provide financial support to ANF in exchange for installing Kuwaitis in ANF leadership positions.  In early January 2014, he offered ANF money to lead a battlefield campaign in Homs, Syria.

‘Abd al-Rahman Khalaf ‘Ubayd Juday’ al-‘Anizi

Since at least 2008, al-‘Anizi worked with a senior ISIL facilitator and ISIL financial official to transfer funds from Kuwait to Syria.  He also worked with an ISIL facilitator to pay for the travel of foreign fighters moving from Syria to Iraq.  Al-‘Anizi worked to smuggle several foreign fighters from Kuwait to Afghanistan, likely to join al-Qa’ida and was involved in extremist facilitation activities with Iran-based al-Qa’ida facilitators, including the movement of extremists to Afghanistan via Iran.

As a result of today’s designation, any assets these individuals may have under U.S. jurisdiction are frozen, and U.S. persons are generally prohibited from doing business with them.

Identifying Information

Name: Shafi Sultan Mohammed al-Ajmi

AKA: Dr. Shafi al-Ajmi

AKA: Sheikh Shafi al-Ajmi

AKA: Shaykh Abu-Sultan

DOB: 01 January 1973

POB: Warah. Kuwait

Nationality: Kuwaiti

Passport: 0216155930

Address: Al-Uqaylah, Kuwait, Area 3, Street 327, Building 41

Name: Hajjaj Fahd Hajjaj Muhammad Shabib Al-‘Ajmi

AKA: Hijaj Fahid Hijaj Muhammad Sahib al-Ajmi

AKA: Hicac Fehid Hicac Muhammed Sebib al-Acmi

AKA: Hajjaj bin-Fahad al-Ajmi

AKA: Sheikh Hajaj al-Ajami

AKA: Hajaj al-Ajami

AKA: Ajaj Ajami

DOB: 10 August 1987

POB: Kuwait

Nationality: Kuwaiti

Name: ‘Abd al-Rahman Khalaf ‘Ubayd Juday’ al-‘Anizi

AKA: Abu Usamah al-Rahman

AKA: ‘Abd al-Rahman Khalaf al-Anizi

AKA: Abu Shaima’ Kuwaiti

AKA: Abu Usamah al-Kuwaiti

AKA: Abu Usama

AKA: Yusuf

AKA: ‘Abd al-Rahman Khalaf al-‘Anzi

DOB: Circa 1973

(Sources: US Treasury Dept, VOA)

(Terrorism image via Shutterstock)

"Asiacell faced a growing wave of political and social instability during the period, allied to the effects of an increasingly competitive market.

"Consequently, revenue for the first half of 2014 was QAR 3,220 million (1H 2013: QAR 3,502 million), a decrease of 8%; EBITDA was down by 17% to QAR 1,544 million and EBITDA margin was also down to 48% from 53%.

"Asiacell focused on a number of cost efficiencies during the period in the face of growing competition whilst continuing its roll-out programme of network modernisation to ensure Asiacell customers continue to benefit from Iraq's best and most reliable network.

"Consequently, Asiacell'scustomer base grew by 10.6% to 11.6 million compared to the first half of 2013. In response to the political and social situation in the country, Asiacell is monitoring the situation carefully and has a range of contingency plans in place to ensure the continued operation of the business."

(Source: Ooredoo)

By Patrick M Schmidt.

International cargo flights to Kurdistan were set to resume today (Tuesday) following an announcement by the central government this month in reaction to the KRGs move for independence.

The resumption of flights will impact a number of Turkish, Qatari, and Emirati airlines that operate out of the KRGs two main airports in Erbil and Sulaimaini.

Talar Faiq (pictured), director of Erbil International Airport, told Rudaw:

“We have not received any decision about the resumption of (cargo) flights and we are waiting for notification from Iraqi aviation authorities so that we can restart our flights.”

The federal government also did not notify the two airports in Erbil and Sulaimani when it ordered a halt to the cargo flights.

(Source: Rudaw)