Learn about the risks that the central bank will face in the event of US sanctions
Learn about the risks that the central bank will face in the event of US sanctions
06:39 – 11/01/2020
Baghdad – Mawazine News
revealed a member of the Finance Committee, Magda Al-Tamimi, on Saturday, about what happened in the committee’s meeting with the governor of the Central Bank and the head of the Financial Supervision Bureau and the Deputy Minister of Finance and the Iraqi Trade Bank (TBi).
Al-Tamimi said in a statement received by / Mawazine News / a copy of it, that “the attendance of the government side made a presentation on the possible risks in the event of sanctions against Iraq by the United States of America.”
The penalties are as follows:
1_ The possibility of stopping the supply of Iraq with the dollar in cash, which is an easy measure to take by the United States, as the countries have full sovereignty over their currency, and this would negatively affect the rise in the price of the dollar against the dinar, and here Iraq has no choice but to go to deal in other currencies, which will need a period Not short, for example, the shift to dealing in the euro currency, which means entering into negotiations that are not easy with European banks such as France and Germany …. etc., since most international banks have difficult conditions and restrictions for dealing with Iraq as an unstable country and have many problems and will be dealt With him With great caution, in addition to the conversion to other currencies requires changing the commercial behavior of the country, and the question that arises is whether the country concerned has the ability to provide Iraq with the amount of currency that it will need in cash, as these countries may not have this ability to pump large amounts of currency Cash. ”
2_ The United States of America may go to deny certain parties in Iraq from carrying out their activities or may issue a ban on dealing with them by most international companies because of their influence on these companies (directly or indirectly) governed by the interests of those companies, for example, a ban on dealing with Certain companies specialized in the marketing of Iraqi oil.
3_ Another danger is the inclusion of certain entities in the ban, these entities may be (people, companies or banks), as the American Treasury provides a list of specific names to prohibit dealing with them in dollars, or it may freeze their assets.
Here we refer to the committee formed in the General Secretariat of the Council of Ministers, including the Deputy Governor of the Central Bank, the ban books are sent to them, and then measures must be taken against them and the circulation of their names and in the event that these measures are not taken, it will negatively affect the level of the international classification for Iraq by the International Financial Action Group Financial Action Task Force (FATF), as this organization is concerned with checking country classifications according to periodic periods.
4_ The other possibility is to submit requests by the creditor parties to press for an immediate payment of their debts (countries or individuals) and immediately and here we point out that Iraq owes (28) billion dollars in foreign debt other than the odious debts (the debts of the Gulf states) amounting to (41) billion Dollars under the United Nations Convention on State Immunities and Property from Jurisdiction in 2004. Al-
Tamimi explained Article 21 as follows:
Article 21, paragraph C of which has been achieved immunity from the reserves of the Central Bank (currency cover).
The following is the text of Article 21 and paragraph C thereof: The
property of the central bank or other monetary authorities in the state.
Specific classes of property
1. The following categories, in particular, of a State’s property are not property used or intended to be used specifically by the State for purposes other than government non-commercial purposes under subparagraph (c) of Article 19.
C of Article 21 of the Bank’s property Central or other monetary authorities in the state ”
If the danger lies in government reserves and other Iraqi deposits, they are subject to seizure according to Article 19, Paragraph C,
Article 19, and Paragraph C of it:” The immunity of states from the following compulsory measures for the issuance of the ruling
Compulsory measures may not be taken following the issuance of the judgment, such as seizure, provisional attachment, and executive attachment, against the property of a state in connection with a lawsuit before a court of another state, except in the following cases and within its scope:
(c) Or if it is proven that the state uses these properties or intends to use them on Specifically for purposes other than government non-commercial purposes, and that they exist in the territory of the state of the court, provided that subsequent measures for the issuance of a judgment are limited to property related to the entity against which the lawsuit is directed. ”
The size of potential commercial creditors’ claims can be estimated as much as the Iraqi funds. N (2_3) billion dollars, and if paid, it will be subject to the terms of the Paris Club.
If the government’s decision to withdraw the Iraqi money from the United States of America and deposit it in the banks of other countries will be of the same degree of danger, as international banks implement the decisions of the United States of America because of the direct and indirect effects on them, in addition to that most of the international banks are not ready to deal with Iraq because of the high The degree of risk in it and it must be noted that all payments to Iraq are in the currency of the dollar, it will lose the status of the transfer to other currencies (losses of the conversion difference).
It is worth noting that the budget for the year 2020 in which current expenditures increased significantly, in addition to increasing the burdens that the budget will bear, especially in the salaries clause, as the employee compensation paragraph jumped from (43) trillion in the 2019 budget to (53) trillion dinars in the 2020 budget
Here, we note that the economic embargo imposed on Iraq in the 1990s and how to manage it and manage the funds needed to pay the obligations cannot be compared with the current situation in Iraq, which cannot bear such shocks, as there is a big difference in the numbers of employees and then salaries, as well as the presence of industrial companies Rabhah then used her profits to cover salaries.
Taking into consideration the amount of documentary credits, which are expressed in dollars, and the presence of (14) billion dollars in sums reserved for the purpose of covering government sector imports and the guarantees of the Ministry of Finance.
Accordingly, the situation and the potential dangers to Iraq must be studied extensively in preparation for making sound decisions and putting alternatives based on achieving the interests of Iraq first and foremost. This is what the rational reference indicated in its sermon on Friday, 10/1/2020 when it confirmed that Iraq is the master of itself and the necessity of providing a happy life. And for the Iraqi to live in dignity and safety and enough of the wars and adversities he suffered at various levels during decades of time, the parties concerned will meet the national responsibility and look at a comprehensive vision for the future of the people and solve the current crisis by responding to the requirements of the reform map in order to avoid the country’s dangers. Scenarios that may not be ominous “29 .anthy / h
mawazin.net
