Al-Amarah Member of the Parliamentary Legal Committee, Independent MP Raed Al-Maliki, revealed that the Governor of the Central Bank, Ali Al-Alaq, responded to a parliamentary question he submitted, regarding the legal basis for continuing to deposit the proceeds of the sale of Iraqi oil with the Federal Reserve Bank, and the justifications for that, and the reasons for increasing investment in treasury bonds.
Al-Maliki said: “Al-Alaq answered that the legal basis for depositing oil revenues in an account with the US Federal Reserve Bank is a memorandum of understanding between the Iraqi Ministry of Finance and the Central Bank of Iraq, according to which an alternative Iraq 2 account was established for the account of the Development Fund for Iraq.”
He added: “Al-Alaq justified the filing by the expiration of the extension of the order to grant immunity to Iraqi funds issued by the US President, as well as the end of the United Nations’ protection of Iraq’s funds, which was imposed by Security Council Resolution No. 1483 of 2003.”
He continued, “? Oil revenue money is transferred to the central bank’s account with the Federal Reserve within 24 hours to ensure that it is not exposed to creditors’ claims. This account enjoys immunity for all the money deposited in it based on «The United Nations Convention on Judicial Immunities of States and Their Property, and the United States Code of Laws issued in 1976».
Al-Alaq indicated in his response that closing the Iraq account with the Federal Reserve Bank could expose Iraq to the risk of international claims, in addition to the inability to settle payments in US dollars without having this account or an account with another US bank.
He explained: “The governor explained that the Central Bank of Iraq is working to diversify investment in foreign reserves, and is not limited to buying US Treasury bonds and the reason for increasing investment and buying US Treasury bonds is the result of the high balances of the Ministry of Finance and the Central Bank with the Federal Reserve,” stressing: “The answer of the Governor of the Central Bank will be subject to scrutiny to ensure the accuracy of what is contained in it.”
Source: National Iraqi News Agency