THE CENTRAL BANK OF IRAQ CLARIFIES THE MECHANISM FOR DEPOSITING OIL REVENUES ABROAD
Economy Baghdad News
The Central Bank of Iraq revealed the mechanism for depositing oil revenues abroad, in response to a parliamentary question on the subject.
The document stated that the legal basis for depositing oil revenues in the IRAQ2 account with the Federal Reserve Bank of New York was the expiration of the extension of the US President’s Executive Order 13303 put in place in 2003, which granted immunity to Iraqi funds deposited in the DFI account.
The Deputy Governor of the Central Bank, Ammar Hamad, explained that the “IRAQ2” account is used to deposit Iraqi crude oil export funds, and they are transferred to the Central Bank of Iraq account with the Federal Reserve Bank within 24 hours of receipt.
This mechanism ensures that funds are not subject to creditors’ claims, he said, as they belong to the Iraqi government from the export of crude oil.
He added that a memorandum of understanding signed between the Iraqi Ministry of Finance and the Central Bank of Iraq in 2014 regulates the work of the “IRAQ2” account, and that this memorandum is the legal basis for the establishment of the aforementioned account.
He noted that the immunity granted under the memorandum of understanding covered sovereign funds only, not funds used for commercial purposes.
He explained that Iraq’s foreign reserves are deposited with several external parties, including central banks and financial institutions, and are not limited to the Federal Reserve.
He pointed out that the interest rates on these deposits vary according to the investment segment, the duration of the investment and the institution with which the investment is made.
Finally, he explained that the company transporting dollars from the Federal Reserve Bank to Baghdad International Airport is Orient, and that the insurance amount for one shipment is 414,000 US dollars, and that the transportation fees are 216,310 US dollars.
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