Wednesday, December 4, 2024
HUGE RISE IN DOLLAR SALES.. WHAT IS HAPPENING IN IRAQ?, 4 DEC
HUGE RISE IN DOLLAR SALES.. WHAT IS HAPPENING IN IRAQ?
After the Iraqi currency auction sales exceeded $65 billion by the end of October 2024, economists expressed concerns that the correspondent banking system adopted by Iraq to finance foreign trade would turn into a new method of currency smuggling and money laundering through “inflating the value of invoices.”
“This huge figure is expected to reach $75 billion by the end of the year, the highest in Iraq’s history,” Nabil al-Marsoumi, a professor of oil economics, told Alhurra. This means that the new measures taken to curb currency smuggling and money laundering “did not succeed.”
According to data issued by the Central Bank of Iraq, its sales of foreign currency have witnessed a clear increase during the current year, exceeding 6 billion dollars last October, or about 274 million dollars per day.
These figures raised reservations among Iraqi economic experts, as they are completely different from what Iraqi Prime Minister Mohammed Shia al-Sudani stated in February 2023, when he appeared on the official Al-Iraqiya channel at the beginning of his assumption of office, protesting the size of currency auction sales at the Central Bank of Iraq.
During that interview, which coincided with the start of work on the electronic platform and the SWIFT system, Al-Sudani said, “We always talk about the existence of fake invoices and the exit of money abroad through smuggling, and this is a reality,” expressing his surprise at imports that were worth about $300 million per day.
He expressed his belief that “this explains why the currency was being smuggled abroad, and this has been a chronic problem for years,” noting that this money was being taken out “with forged invoices.”
Conflicting numbers… and doubts
Knowing the size of Iraq’s imports is a dilemma. According to estimates by the Central Statistical Organization, Iraq imported $24.6 billion worth of commodities and petroleum products in 2023, an increase from $21.9 billion in 2022.
These numbers are much lower than the Central Bank’s foreign currency sales in 2023, which amounted to $40.9 billion, and lower than its sales in 2022, which amounted to $48.5 billion.
In contrast, the German company “Statista”, which specializes in market and consumer data around the world, revealed the value of Iraq’s imports for the year 2023, which reached $95.53 billion. Meanwhile, the Iraq Future Center spoke of imports that reached $67.25 billion.
These financial and import flows were addressed in a study titled “The Role of Currency Auctions in Illicit Financial Flows in Iraq,” which concluded that the currency auction was a key window for illicit financial flows in Iraq. It said that more than $132 billion out of the total sales of $350 billion between 2007 and 2013 were smuggled through it.
In a report published by the Integrity Commission entitled “The Role of the Financial Control System in Preventing the Phenomenon of Foreign Currency Smuggling,” which relied on the sale of currency in the Central Bank of Iraq as a model, it was concluded that there are many major violations and breaches in the instructions and laws issued by the Central Bank, as a result of deliberate negligence that led to serious violations that resulted in the phenomenon of currency smuggling as one of the most important aspects of corruption in Iraq.
SCARY IMPORT
The US administration excluded a large number of Iraqi banks during 2022 and 2023 from dealing with the “foreign exchange window” and imposed sanctions on them due to suspicions of corruption surrounding them. And began dealing with an electronic platform through which banks raise their dollar requests in coordination with international bodies, in order to tighten and organize the operations of the foreign exchange window, ensuring effective control over it.
However, the problem that occurred is that: “The mechanism has not changed much except for the stimulation of balances, meaning that we are back to dealing with the old mechanism before the platform, the difference is that the enhancement process is audited by American banking institutions,” as economist Abdul Rahman Al-Mashhadani told Al-Hurra.
Al-Mashhadani points out that the World Trade Center, which issues an annual report on the volume of trade, “talks about $85 billion, the value of Iraqi imports for the year 2023.”
This is a problem that comes from the fact that Iraq is an “importing country, and we do not have a manufacturing process to reduce the volume of imports. This comes because we do not have a source of funding for the budget other than oil, we only have oil revenues.”
Another fact that Al-Mashhadani points out: “The real import figures only come from outside Iraq when those countries disclose the size of the imports, and we find that they are large and terrifying numbers.”
According to Al-Mashhadani, the questions that should be raised today relate to “the extent of Iraq’s actual need to import materials at these amounts in one year and the accuracy of these numbers. We must investigate whether there is inflation in the invoices. Here we need to pause to scrutinize whether these goods that were announced have entered Iraq or not.”
Al-Mashhadani’s statement here is consistent with the Integrity Commission report, which cited several aspects of currency smuggling, the most important of which is the inflating of “invoices for fictitious commodity imports,” which it said amounted to only 1% of the materials entering Iraq in a sample of the lists reviewed by the report.
COMPLEX ISSUE
Speaking to Alhurra, Professor of Economics and Banking Sciences, Ahmed Hithal, criticised the Central Bank’s postponement for many years of implementing the platform for transferring dollars, which would identify the final beneficiary of foreign transfers to finance foreign trade, “on the pretext that we cannot control the banking system, and that the banking system is backward and does not have sufficient flexibility to implement electronic automation in the issue of transferring dollars.”
Despite the implementation of the electronic platform: “The transfer issue is still very complicated by the Central Bank, and there are still invoices from merchants, and there are still credits from banks stating that these invoices are being fabricated and inflated, so that the highest possible amount of dollars can be sold through the platform and correspondent banks.”
Hedhal justifies his opinion by saying, “It is illogical that the dollar has been sold daily for five days a week during the past few days for more than $250 million.”
Hedhal believes that this number is “very large,” and expresses his belief that these amounts of dollars “do not match the size of actual imports,” noting at the same time that “many foreign transfers and registered goods and services do not enter under their real names.”
Which means: “There is a significant inflation of imports by certain groups, and these are linked to the importing countries and the intermediary countries that feed these remittances.”
MONEY LAUNDERING IS “OVER”
The Prime Minister’s financial advisor, Mazhar Mohammed Saleh, rules out the possibility of smuggling or money laundering through the foreign currency auction “because it is almost over, and there are now financial reinforcements to American correspondent banks that have the ability to comply and monitor money laundering operations.”
What is happening today, according to what Saleh told Alhurra, is that “Iraqi banks that are not sanctioned can open accounts with foreign correspondent banks that are able to monitor and know the final beneficiary of the transferred funds. Therefore, the compliance rules have changed and become stronger.”
However, Saleh agrees with what the economic experts have said: “Iraq does not need these huge sums that are followed by another story related to the size of the large imports, and the variety and multiplicity of goods that are imported without imposing controls on them. Especially the luxury or trivial goods that we see in the markets and on which foreign currency is spent.”
Therefore: “We must set priorities in the import process, and prevent the entry of goods that have no economic value.”
As for the difference between the volume of imports that are announced and those that are not commensurate with the materials that are imported, he says: “There are goods that are exempt from taxes for investors, and there is a different customs policy in the region than in the rest of Iraq. There are also goods that are delayed in arrival, or arrive in the form of flows that require a longer period of time.”
THE SOLUTION?
For all the reasons mentioned, Iraq, according to the Prime Minister’s financial advisor, “needs a major balancing act, especially with regard to revitalizing the industrial sector, and studying the imported goods and commodities.” We must also “move to an automated system for recording incoming goods, so that we can see which goods are actually arriving and which have been supplied to trade with hard currency and dinars purchased from them.”
In addition to “subjecting the border crossings and treating them as one region. All of this needs time, and Iraq has started taking steps today to achieve this.” He concludes his speech by saying: “In my estimation, there are two gaps, the first related to the process of organizing the type of goods entering Iraq. The second related to reducing customs violations so that we can obtain correct estimates of the volume of imports.”
In turn, Hathal believes that there is great importance in “knowing the primary beneficiary of the transfer through the platform, through cooperation between the relevant authorities, namely the Ministry of Commerce and Planning, the Central Bank, Customs, and the Ministry of Finance, through the Skoda system.”
He points out that economists “have often called for the implementation of this system, which is in place globally, to determine the real imports and the amounts that must be paid.” He noted that “it is not logical that we have about 60% of trade that is not organized, meaning we have unorganized traders who do not have legal status and who put pressure on the internal exchange rate and cause it to rise, and they are the beneficiaries of the external transfer without having legal status.”
Resolving the conflicting import figures and increasing the volume of the Central Bank’s dollar sales to finance foreign trade, as Al-Mashhadani sees it, requires “swift and deterrent government measures, as those who carry out these operations are corrupt whales of merchants who finance parties that influence the decision.”
There are also “influential political parties involved, and hotbeds of corruption that require political will and strong decision-making to combat, noting that the law exists, but it is not strong enough to strike the biggest whales of corruption.”
FIREFLY: "It's either very soon before or right after that of the closing of the auctions we have to see a new rate." , 4 DEC
Frank26
[Iraq boots-on-the-ground report]
FIREFLY:Mr Sammy wants to tell you that the day when we stop the currency auction and deal no more in dollars in these auction but all in payout of dinars, it's either very soon before or right after that of the closing of the auctions we have to see a new rate...
FRANK: You're 100% correct Mr. Sammy. You know what they're going to do. They're going to lift the value...Stopping of these auctions will require a new exchange rate...They're going to stop them on December 31, 2024.
ANALYST: AMERICA WILL INVENT EXCUSES TO CONTINUE THE PRESENCE OF ITS FORCES ON IRAQI SOIL, 4 DEC
ANALYST: AMERICA WILL INVENT EXCUSES TO CONTINUE THE PRESENCE OF ITS FORCES ON IRAQI SOIL
Political analyst Qasim Al-Tamimi believes that the American side will use the power cards it possesses against Iraq in order to find a pretext for the continued presence of its forces on Iraqi soil.
Al-Tamimi told Al-Maalouma, “The security of the Zionist entity is a priority for Washington, as the deployment of its bases in the eastern Syrian Euphrates, Al-Tanf, Anbar and Kurdistan was not random, but rather came in a deliberate manner to provide protection for the usurping entity.”
He added, “Despite America’s failure to use these bases to protect the Zionist entity from the resistance’s missiles, it uses them as a center for its intelligence and espionage operations and to carry out assassinations inside and outside Iraq.”
He explained that “the American side will seek to find pretexts for the continued presence of its forces on Iraqi soil, by using some cards that Washington considers a factor of strength for it against Baghdad, especially what is related to the dollar and oil revenues, With the aim of achieving its goal of continuing its presence on Iraqi soil.”
MNT GOAT: " Al-Alaq has told us he strongly supports the dinar of the past and will bring it back to its “glory days”, 4 DEC
MNT GOAT
☹ In another article today titled “WARNING AGAINST CANCELING THE ELECTRONIC PLATFORM: IT MAY END THE BANKING SYSTEM IN IRAQ“ we see this example of not understanding the “unconventional” financial reform strategy of Al-Alaq.
The researcher and specialist in financial and banking affairs, Mustafa Hantoush, says that the Central Bank of Iraq, by not finding real solutions for transfers and moving towards stopping the (fitr) platform and handing over the Iraqi dollar to (4) correspondent banks owned by investors and banks.
He claims, the Central Bank of Iraq is failing in one of the most important banking policies, which is the policy of achieving competition in the banking sector and preserving banking sovereignty.
Therefore, we demand that the Central Bank come up with specific solutions, including extending the work of the (Fitr) platform in coordination with the new administration of the United States of America.”
He continued by saying, “It is necessary to guarantee the Iraqi banks to open an account for them in the correspondent banks in dollars (Citibank/JP Morgan) as the countries of the region have done.”
He pointed out that “it is also necessary to determine and announce the mechanism for cooperation and auditing with Ernst & Young regarding transfers in currencies other than the dollar (euro – yuan – lira – dirham).”
What I have to say about this article, with opinions by Hantoush, is that he does not understand the necessity to get the IQD reinstated and do it as soon as possible to allow the movement ahead in the economic reforms part of the reform and reconstruction of Iraq. Al-Alaq remembers the 2012-2013 attempt and so understands the necessity. He is taking flack now from these economic experts in moving ahead with this plan for the end of the year.
Could Al-Alq wait even longer until more agreements are made with many more of the correspondent banks, as Hantoush suggests? Yes, Al-Alaq could but he is moving ahead and he has told the citizens this new FITR platform and I quote “announced the Central Bank’s success in implementing the transition plan for foreign transfers, in line with international practices and standards”
So, what is this dream of Al-Alaq? We read article after article years ago when Al-Alaq has told us he strongly supports the dinar of the past and will bring it back to its “glory days”. This is the ultimate goal of all these financial reforms and “pillars” Iraq keeps talking about. They are all just a means to the end. The end is the reinstatement, a by-product of all this hard work of financial reforms.
The coming Era of Gold:
Let us research and then sit back, relax during this holiday season of Christmas that has begun. God through His profits also keeps telling us there is going to be a wealth transfer.
Does this mean our RV or is this just the tip of the iceberg of what He has planned for this nation?
If you recall Kim Clement also talks about California and gold in many of his prophecies in the same tone. What does God mean by all this talk of gold. Now more recent prophecies talk about a shaking of California in both a literal and metaphorical sense. They say sometime in July. What does God mean by these words?
This is going to be an interesting summer of 2025.
Could it be that a huge vain of gold is about to be exposed by an earthquake in California and this gold is the catalyst that brings the U.S. back to the gold standard, along with ways to resolve the national debt issue?
I am not telling just asking…. Who knows the answers to these questions. But I will say that if you are patient enough you will hear and then see the outcome of these prophecies. God does not just jabber for nothing and chat with prophets for nothing…lol..lol..lol..
Instead, He talks to his prophets and every word is of importance sooner or later. Remember too He told His prophets that “in the coming period the U.S. would see prosperity and abundance like NEVER before the history of the nation”.
Oh…. what the heck does this mean? How will He bring all this about? If you are paying attention (and I hope you are) you can see just the very beginning signs, the seeds being talked about of what is to come in this area that God talked about so many times and continues to tell us. I firmly believe it will be the Trump administration and those that follow this administration that will bring in this new era.
Just one more note. Didn’t Kim Clement in his “Hypnotic November” prophecy, tell us about a December surprise. What can this surprise be? Is it the dinar RV or something else of great abundance and gifts? I still have the video below posted once again in this Newsletter. You might want to replay it again or watch it for the first time.
The important part, I believe, is to keep praying and to let God know that you are trying to understand and want to know. He wants us to know His great glory. He wants us to affirm that it is Him who brings all things good to us. Pray and tell the Lord that you will appreciate anything that He may bring and you welcome all that He is offering to us.
https://mntgoatnewsusa.com/latest-mnt-goat-newsletter/
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