Economist: Budget amendment allowed the region to dispose of revenues without restrictions
Economist: Budget amendment allowed the region to dispose of revenues without restrictions
2-4-2025
Information/Baghdad..
Economic researcher Abdul Salam Hassan Hussein confirmed today, Tuesday, that the budget was designed with excessive flexibility that allows the region to dispose of revenues without restrictions.
Hussein said in a statement to Al-Maalouma Agency, “The constitutional laws in Iraq are clear and do not require interpretation, but political pressures facilitate circumventing difficult articles and passing decisions without strict adherence to the constitution.”
He added, “The latest example of this was the general amnesty law, which was approved in the House of Representatives despite the objection of 90% of the representatives.”
He pointed out that “Iraq is subject to foreign agendas and personal interests, which led to the continuation of crises without real solutions, including the work system in the Kurdistan Region, where financial deductions and the method of managing oil fields continued for more than 22 years without any change, due to political pressures that prevent finding radical solutions to these files.”
Regarding the financial relationship between Baghdad and Erbil, he explained that “Article 13 of the budget law was drafted with great flexibility, which allowed the regional government the freedom to dispose of oil revenues at a time when the central government is committed to transferring funds without clear oversight mechanisms.”
He added, “This flexibility is being exploited by the region to pay off its debts instead of directing funds to develop the economy and achieve justice in the distribution of resources.”
Text of Article 13 of the Budget Law:
First: A- The total revenues of the oil exported and sold locally from the fields located in the region shall be deposited in a single bank account opened by the Federal Ministry of Finance at the Central Bank of Iraq, where all revenues resulting from the export or sale of crude oil and its derivatives shall be deposited without any deductions, with all other similar accounts being closed.
B- The Federal Ministry of Finance shall undertake to finance the region’s dues in accordance with the provisions of this law, whereby they shall be deposited in a bank account approved by the Central Bank, and the Prime Minister of the region or whoever he authorizes shall have the authority to disburse from this account in accordance with the provisions of the law, provided that the account is subject to the oversight of the federal government and the Federal Financial Supervision Bureau.
Second: The Federal Board of Financial Supervision and the Federal Ministry of Oil, in coordination with the Board of Financial Supervision in the region, shall audit and monitor the aforementioned accounts. If this is not possible, an international auditing firm shall be contracted exceptionally to monitor the account movement, and it shall have the right to review the details of contracts, shipments, and financial dues of the contracting companies for the extraction, transportation, and export of oil. The Ministry of Finance and Economy in the region shall also be obligated to provide the Federal Board of Financial Supervision with the monthly trial balance to be audited in coordination with the Board of Financial Supervision in the region and sent to the Federal Ministry of Finance / Accounting Department for approval within the state accounts.
Third: The international auditing company mentioned in Clause (Second) shall review the bank accounts mentioned in Clause (First) with all their income and expenditures, and submit periodic reports to the Federal Financial Supervision Bureau and the Financial Supervision Bureau in the region.
Fourth: The annual and semi-annual financial statements shall be submitted with the signature of the Minister of Finance and Economy in the region and the auditor (international auditing firm), and a certified copy thereof shall be deposited with the Federal Ministry of Finance.
Fifth: A joint committee consisting of both parties will be formed to conduct a comprehensive review of the previous period regarding the oil and gas sector in the region, and to organize the relationship between the federal Ministry of Oil and the region, in order to reach an applicable constitutional vision for the purpose of settling outstanding issues.
Sixth: All items (first, second, third, fourth, fifth) shall be implemented from the date of entry into force of this law until the issuance of the Oil and Gas Law.
Seventh: In the event of disagreements between the federal government and the regional government regarding the rights, obligations and mechanisms contained in this law, a joint committee shall be formed to resolve the outstanding issues and submit recommendations within 30 days. If a solution cannot be reached, the matter shall be referred to the Council of Representatives to take the necessary decision.
Eighth: A- The regional government is committed to giving priority to paying salaries to employees and retirees, in addition to committing to investment spending for the region’s governorates according to the standards stipulated in the law.
B- In the event that the region does not comply with what is stated in paragraph (A), the Prime Minister of the Federal Council shall take the necessary measures to ensure its implementation, including direct funding.
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