KTFA:

Samson:  Election of Iraq to membership in the Commission on International Trade Law (UNCITRAL)

15th March, 2022

The Ministry of Foreign Affairs announced the election of Iraq to the International Trade Law Commission.

The ministry's spokesman, Ahmed Al-Sahaf, said in a brief statement, "Iraq has been elected to the membership of the Commission on International Trade Law (UNCITRAL) for the period from 2022 to 2028."

The Commission on International Trade Law (UNCITRAL) is a subsidiary body of the United Nations General Assembly responsible for helping to facilitate international trade and investment.  LINK

Samson:  Oil prices calm, Brent consolidates above $100 a barrel

03/16/2022 08:25:26

Oil prices witnessed a slight rise today, Wednesday, after sharp declines in the first two sessions of this week, as fears of a supply interruption receded, while a sharp increase in Covid-19 infections in China raised concerns about demand.

Brent crude futures for May delivery rose 0.95% to $ 100.86 a barrel, while US West Texas crude futures rose 0.47% to $ 96.89 a barrel.

Oil prices tumbled more than 6% yesterday, Tuesday, to their lowest level in almost three weeks, and the international benchmark Brent crude contracts ended Monday’s trading session as low as 5.77 dollars, or 5.1%, to record at the settlement of 106.90 dollars a barrel. US West Texas Intermediate crude contracts fell $6.32, or 5.8%, to settle at $103.01 a barrel.

A frenzy of buying pushed the two benchmarks to their highest levels in 14 years after the Russian invasion of Ukraine. Since then, Brent has lost about $40, while US crude has fallen more than $30.

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Samson:  The repercussions of raising the dinar exchange rate on the economy and markets

16th March, 2022 by Dr.. Haider Hussein Al Tohme

As a result of the repercussions of the Corona pandemic, the great closure of the global economy and the sharp decline in oil prices, the value of the Iraqi dinar was reduced in response to the critical financing pressures for the 2021 budget. The value of the dinar was reduced from (1182) to (1450) dinars per dollar, to maximize oil revenues and reduce the government financial deficit.

Despite the economic and social repercussions of the devaluation policy and the preconditions it requires for its success, it remains a familiar policy in many countries, especially emerging ones. 

Markets have responded to the exchange rate shock better than expected. As for raising the value of the currency, it is an unfamiliar policy, given the consequences of that policy on economic growth and stability on the one hand, and weakening the credibility of monetary policy and its role in achieving financial and monetary stability on the other hand.

The following are the most prominent expected repercussions of re-changing the exchange rate (raising the value of the dinar) on the economy and markets.

1- The exchange rate is a basic indicator in the business sector on which price expectations and the purchasing power of future returns are built, and therefore its stability helps in improving the investment environment.

2- The rise in oil prices after 2003 helped to accumulate international reserves and maintain the normal levels of import when the oil price fell. It is unreasonable to bet on high oil prices to change the exchange rate. Rather, the possibility of the opposite is higher, as it may decrease and remain fluctuating around a low average for a long period. Therefore, attention must be paid to the accumulation of central bank reserves when deciding to change the exchange rate.

3- The policy of raising the value of the dinar means providing a subsidy, commensurate with the level of income, from the oil resource for all, affecting the rich many times what reaches the poor[1]. Instead, the benefits of this policy on the poor can be offset by other, more beneficial and focused measures.

4- The repetition of changing the exchange rate within short times leads to disruption of economic and financial activity in the country, and confuses the work of local markets and may lead to economic stagnation.

5- The federal budget is accustomed to an exchange rate of (1450) dinars to the dollar in order to finance public expenditures, especially with the weakness of non-oil revenues. The return of the exchange rate to (1182) dinars to the dollar means reducing oil revenues by nearly (20) trillion dinars, which is a difficult number, which the general budget may not be able to overcome in light of fluctuations in oil prices in global markets.

6- The frequent change of the exchange rate is one of the main motives for speculating on the currency and heading towards real and in-kind assets to preserve value, which increases the prices of these assets at the expense of saving and investing in the productive sectors of the economy.

7- Changing the exchange rate under political pressure may lose the independence of the Central Bank and weaken the credibility of monetary policy and its role in achieving monetary and financial stability in the country.. It is a negative indicator of investment and the international classification of the Iraqi economy.

8- The general budget was a financial channel for the transmission of the shocks of the international oil markets to the local economy due to the large exposure of the budget to oil revenues (90%), especially with the lack of adequate financial space to absorb shocks as is available in the Gulf countries.. This means linking the exchange rate to oil prices. (Devaluing the currency when oil prices collapse and raising it when prices rise) Transferring external shocks to the local economy through the monetary channel in addition to the usual financial channel.

9- It is not expected that local prices will respond to a significant increase in the value of the dinar, since prices are inflexible towards the decline in the exchange rate of the dollar and flexible towards its rise due to the viscosity of prices and the absence of conditions for complete competition in the Iraqi markets. The rise in the prices of some commodities is not due to the high exchange rate of the dollar, but to the rise in global production costs and the doubling of transportation and insurance costs as a result of the collapse of supply chains, as well as the weak ability of some companies and factories to meet the increasing global demand as a result of the recovery of the global economy.

10- The continuous and close change in the dinar exchange rate leads to a loss of confidence of companies and individuals in the banking system, which disrupts the movement of deposits and loans and puts pressure on the Iraqi banking system.

11- Raising the value of the Iraqi dinar means increasing the risks of the non-competitive exchange rate of the dinar on the chances of reviving the non-oil sectors and directing industrialization to achieve economic development. Instead, imports from neighboring countries (Iran and Turkey) are increasing, which depend on the policy of decreasing the local currency exchange rate to encourage exports and win markets. In most cases, the increase in exports of these countries is at the expense of the Iraqi agricultural sector, which provides about (20%) of job opportunities, and where one-third of the population lives in rural areas.

12- Reducing the exchange rate of the dollar increases the burden of the internal public debt on the budget and the economy, especially with the rise in the internal public debt to more than (70) trillion dinars at the end of 2021, and it is a candidate for an increase in light of the government’s appetite for internal public borrowing in order to finance the government financial deficit. LINK

Samson:  Forgery and fraud, worth 123 million dinars, were seized in Umm Qasr

03/15/2022 22:47:16

Forgery and tampering with the details of a completed customs transaction for (55) containers that caused a waste of public money of more than (123) million at the port of Umm Qasr Al-Awsat port.

\The quality control operations carried out by the Border Ports Authority continue with its monitoring and auditing efforts for all incoming goods and merchandise, as the Umm Qasr Al-Awsat Port Port Directorate was able to control (a completed customs transaction) in the control of search and investigation outside the customs precinct, which includes (55) loaded containers (air conditioners with capacities and sizes different). When audited, it was found that there was a waste of public money amounting to (123,843,000) million dinars as a result of evading the payment of the real customs and tax fees for the value of the materials. 

A fundamental seizure report was organized and the materials and customs treatment were referred to the Umm Qasr Al-Awsat police station for the purpose of presenting them to the investigative judge to take legal measures against the violators.   LINK

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Samson:  The Iraqi judiciary adopts the “parallel financial” investigation into money laundering crimes

03/16/2022 11:51:29

 Money laundering crimes are modern and cross-border crimes that are no less dangerous than terrorist crimes, which requires a great effort to combat them.

Iraq has come a long way in reducing these crimes and their effects, which resulted in the country’s exit from the black list and its entry into the “FATF” organization after the great judicial work that culminates now in the adoption of the so-called parallel financial investigation, which is another parallel investigation aimed at detecting, tracking, seizing and seizing the proceeds of crime. confiscate them, punish their holders and prevent the revenue from being integrated into the national economy.

Under the title (Parallel Investigation of Money Laundering Crimes), a symposium was held at the headquarters of the Baghdad Appeal Court, Al-Rusafa Federal, with the participation of judges from criminal courts and investigations from all appeal presidencies.

During the seminar, Judge Imad Khudair Al-Jabri said that "the crime of money laundering is one of the modern crimes against Iraqi society, so the idea of ​​the Supreme Judicial Council holding such seminars is to shed light on the procedures that should be followed by the judges in these crimes."

The head of the Baghdad / Al-Rusafa Court of Appeal added that "Iraq has become among the Financial Action Organization (FATF) and (Minovatif) concerned with (monitoring money laundering crimes in the world), noting that "Iraq was ranked black in the organization's classification, but today we were able to from leaving this rank and moving to the gray rank thanks to judicial decisions and procedures followed by the concerned authorities, and we are determined to move to a rank that befits Iraq's reputation in international forums.

Al-Jabri pointed out that "these crimes are not local, but are cross-border crimes, and therefore this organization monitors how countries reduce these crimes and their mechanism of action, and then it classifies countries and punishes their banks if they do not comply with the instructions issued by the organization in matters of deposit and financing under subject control." For scrutiny and follow-up by the concerned authorities,” noting that in the event of any delay or negligence on the part of Iraq, we may return to the black rank again,” stressing that “exiting this classification depends on the statistics of the Supreme Judicial Council in settlement, confiscation, banking procedures, safety and prevention methods.” taken by the government.

He continued, "The investigative judges must conduct a parallel investigation with the accused in these cases, the first about money laundering and the second to find out where this money went," stressing that "the largest role falls on the investigative judge in two cases in these crimes, according to the nature of each crime and this matter is left to the discretion of the competent judge, which means that these crimes need more scrutiny, as this money may be one of the sources of terrorist financing."

And he indicated that "raising our rank from this list depends on the judges' efforts to deal with these crimes with great accuracy," stressing that "the investigation in the past was limited to the Presidency of the Rusafa Appeal, while today the investigation has become in all appellate presidencies to facilitate and simplify the procedures in the process of combating this crime", indicating that "when Iraqi money goes outside the borders and is confiscated, Iraq is not able to recover it from those countries, so it must work with all force to prevent its exit outside the borders to ensure that those funds are not lost abroad."

For his part, the first judge of the Court of Integrity and Money Laundering in the Federal Rusafa Appeal, Iyad Mohsen Damad, said that “Iraq from (2012 to 2017) applied most of the recommendations and conditions of the Labor Organization (FATF) and (Minovatif), the most important of which is knowledge of the client’s funding sources in Banks, with the addition of specifying a competent judge to look into these cases and the formation of an anti-money laundering council, as well as other administrative and legal procedures.

Judge Iyad Mohsen Damad added that "this file needs political and governmental support in order to move to better ranks than the current rank that Iraq has reached now," noting that "the most prominent indicators of money laundering are the multiplicity of bank accounts as well as deposits in small currencies."

He pointed out that "some of them may wonder why Iraq is interested in this classification, that the world has become linked to each other today, and therefore we are part of this organization whose instructions and conditions should be followed," explaining that "recommendation No. (30) of the (FATF) provided for the existence of authorities a designated law enforcement specialist responsible for ensuring that money laundering, predicate offenses and terrorist financing are properly investigated through the initiation of a financial investigation.

He noted that "the parallel investigation is carried out by the investigation authorities by opening a financial investigation that begins at the beginning of the investigation of the original crime in order to discover the proceeds of the original crime and then seize and seize them, prevent their concealment and prevent the integration of its profits into the national economy," adding that "the objectives of the parallel financial investigation aims to uncover proceeds of crime, tracing, seizing and seizing proceeds, in addition to confiscating the proceeds, punishing their holders and preventing the proceeds from being integrated into the national economy.

The judge added that "the parallel financial investigation will be in two tracks, the first is that parallel financial investigations are conducted to find out the existence of proceeds of the original crimes such as crimes of theft, breach of trust, embezzlement, financial extortion, crimes of financial and administrative corruption, crimes of fraud and human and drug trafficking, while the second track concerns the financing of terrorism to find out who carries out terrorist operations. Whoever manages, possesses and transfers funds owned by terrorist organizations and financed through their activities.”

He stressed that "the parallel financial investigation is important, including strengthening Iraq's position before international residents, considering the parallel investigations as one of the evaluation criteria, as well as measuring the impact and feasibility achieved as a result of criminal investigations in the original crimes. If necessary, and the real estate registration and traffic departments to find out if the accused or one of his relatives owned real estate or wheels after committing the crime, as well as the Central Bank of Iraq to approach all private banks to indicate if there are any accounts and deposits for the accused and his relatives, and then stop all withdrawal movements and deposit.”

He concluded by saying, "A seizure must be placed on movable and immovable funds to prevent the transfer of real estate and vehicles, as well as taking legal measures against the accused and those who are proven to be in possession of the proceeds of crime for the crime of money laundering and terrorist financing."  LINK