[casi-analysis] financial bodies

[Daniel O'Huiginn <do227@DELETETHIScam.ac.uk>]

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Dear list, Below are the results of a somewhat painful attempt to work out
who is in charge of the money in Iraq, based as much as possible on
official documents, and secondarily on the media and hearsay. I've also
included some information on current officials, and their pesonal and
institutional bias, and brief accounts of what the bodies have been doing,
if they have been doing anything in public. I began writing this because I
was confused by all the acronyms and institutions, and I'm still pretty
baffled (it took me quite a while to notice tht the IRRF and the IRFF
aren't the same thing, for example). Unfortunately there isn't an 'Iraq for
Dummies' book yet, and producing this was the best alternative.

Also, apologies for the fact that this plain-text version is probably all
but unreadable (e.g. the footnotes seem to be completely ruined, and the
headings are indistinguishable from the rest of the text). If you want a
readable version, I'll can send you a something in pdf or word format, but
I can't send attachments via this list.

Some caveats
 - the below is not complete. There isn't, for example, an entry for the
Governing Council, or for the US and UK governments, and there's very
little on what the CPA's been up to. I could go on for ever adding more
information. Conversely, the fact that information is here doesn't mean
it's important. I've jammed in information that isn't entirely significant
here for the sake of having somewhere to put it. In so far as there is any
scheme, I've listed the main audit/oversight bodies, the funds which
control the money, and the main policy-setting institutions.
 - I don't know what's really going on. This information is based largely
on official documents, plus a smattering of media reports. I have no idea
what's going on in the ground in Iraq (or Kuwait, or wherever all these
phantom bodies are based)
 - I am not a lawyer. I am not an economist. I am not an Iraqi. So there
are almost certainly hideous mistakes below. If you find them, please let
me know!
 - There are no dramatic revelations or insightful critiques here – I'm
having enough trouble getting my head round who's doing what.

In continued bewilderment,
Dan

Ministry of Planning and Development Cooperation This was the ministry of
planning until CPA regulation 7 (5 December 2003) renamed it and defined
its functions (order 7, section II.3). It is expected to: " promote
international assistance to iraq, liaise with donors. " develop procedures
for allocation of donations geographically and by sector (these are
presented as proposals to the Iraqi Strategic Review Board, 'with the
concurrance of the ministry of finance'). These should
 form an efficient, comprehensive and integrated plan. Monitor
 international assistance to ensure prioritization and equitable
distribution " Represent Iraq to UN/World Bank trust funds (together with
the Iraqi Strategic Review Board). Also responsible for all other (non-IMF)
IFI assistance (reg 7, 5.1.b) " 'work closely with the ministry of finance
and the central bank of Iraq to ensure that assistance from the
international financial institutions is allocated consistently with the
national budget' " work with CPA's Program Management Office to take into
account existing commitments and the US Governments apportionment of funds
" chair the Council for International Coordination The current minister of
planning is Mahdi al-Hafiz of the Independent Democrats Movement. His name
is also spelt Mehdi Hafedh. Hafiz, a Shi'ite, worked in the Iraqi Oil
Ministry from 1975 to 1979, and served in the Iraqi delegation to the
United Nations in Geneva in 1978-80. He represented Iraq at 2004 World
Economic Forum, where his biography described him as: “BSc in Chemistry; MA
in Sociology; PhD in Economic Science. Formerly: Special Adviser of UNIDO;
Director-General and Senior Expert with UN Agencies, UNCTAD, ESCWA, UNISCO;
Minister Plenipotentiary at the Iraqi Mission in Geneva. Currently,
Minister of Planning and Development of Iraq. Chairman, Iraqi Strategic
Review Board for the Reconstruction of Iraq. Founder, Arab Organization for
Human Rights. Adviser, Arab Thought Foundation. Professor of Economics in
Iraqi universities. Former President, Arab Society for Economic Research.
Former Member of the Board, Arab Thought Forum, Amman. Author of many books
on Arab affairs and economic and social issues.” Ministry of Finance
Responsible for IMF assistance (CPA reg 7, 5.1.a) The minister of finance
is Kamil Mubdir al-Kaylani: Sunni Arab; b. Baghdad, 1959, a businessman
with a degree from Mustansariyya Uni in economics who ran a contracting
firm in Baghdad. Was reportedly installed on the urging of the Iraqi
National Congress. Kaylani is a liberaliser, and in September apparently
went beyond his brief by advocating complete liberalization, and was
criticised for it by the Governing Council . (). Juan Cole passes on some
gossip about his appointment: “An informed reader wrote me that she was
told that "Kaylani was brought in as minister specifically with the plan to
announce this [economic liberalization plan]. He was the Iraqi National
Congress's nominee as minister." The sentiment among some high Coalition
officials is that the plan is "ridiculous" insofar as it lacks any
restrictions on the export of profits abroad. Kaylani is also said to have
fired several very able persons in the Finance Department.“

Ministry of Trade Minister is Ali Allawi. WEF bio describes him as: “1968,
BSc in Civil Engineering, MIT; 1969, MSc in Regional Planning, London
School of Economics; 1971, MBA, Harvard Business School. 1971-77, joined
the Young Professional Program and later became Investment Officer,
IFC/Capital Markets Department, World Bank Group; 1977-78, Consultant, Arab
Fund for Economic and Social Development, Kuwait; 1978-87, Managing
Director, Arab International Finance, Merchant Bank, London; 1987-92,
Chairman, Intercapital Group, Investment Services, London and Switzerland;
1992-2003, Chairman, FISA Group, Investment Management, London; since 2003,
Minister of Trade of Iraq.” Other ministries All ministries submit programs
to the Ministry of Planning and Development Cooperation, which presents
them to the Iraqi Strategic Review Board. The ministries of public works
and Housing and Construction are likely to have a significant role here.
CPA reg 7 (Section 5) requires the ministry of finance, the central bank,
and the ministry for planning to consult regularly on IFI assistance Note
that there is a CPA presence within each ministry. It is hard to know how
significant this is, but various media reports and second-hand word of
mouth suggest they're fairly influential. Glen has a useful list of CPA
senior advisers. Iraqi Strategic Review Board Established 5 Dec 03 by CPA
regulation 7: “as the Iraqi organization, operating under the authority of
the Governing Council or its successor, that will work on behalf of the
Iraqi people to forge a strong partnership among the interim Iraqi
administration and contributing governments, international organizations
and other entities that provide grants, loans, guarantees, or other
financial or technical assistance in support of Iraq's relief, recovery and
development efforts” Membership: 5 members. 2 from Governing Council, 1
from CPA, Minister of planning and development cooperation, and minister of
finance The current chair is Mehdi Hafedh (also spelt Mahdi Hafez),
Minister of Planning and Development Cooperation. The CPA representative is
director of economic policy Marek Belka. Mahmoud Ahmed Uthman, chairman of
Al Khair Financial Investments Company is also a member

Functions:
 - “provide overall policy guidance” on international assistance
 - take action on recommendations from the ministry of planning and
development cooperation for allocation of international assistance. Must
accept, reject or query recommendations within 10 days
 - “shall work closely with the Ministry of Planning and Development
Cooperation and the Ministry of Finance to ensure that international
assistance for Iraqi is actively fostered, properly allocated against Iraqs
prioritized needs, effectively utilized and monitored, and integrated into
the Iraqi national budget”
 - chairman of board participates in International Reconstruction Fund
Facility

As of late January 2004, the board was inactive [], but by late February
had “set up a plan covering the most urgent projects according to
priorities, where donors could be of assistance in the next 12 months.”
Council for International Coordination (CIC)

From CPA public notice 'regarding the Council for International
Coordination' “The Council will be the CPA's focal point and coordinating
body for international assistance in the relief, recovery and development
of Iraq. The Council will encourage the international community to provide
funds and other forms of assistance to Iraq and will coordinate assistance
provided by States, non-governmental organizations and international
organizations. In carrying out its responsibilities, the Council will work
closely with the UN Special Representative and his designees and otehr
organizations involved in the relief, recovery and development efforts”

Originally chaired by Prof. Marek Belka (former deputy prime minister of
Poland), with Australian official Andrew Goledzinowski as vice-chair. Since
December 2003, chaired by Ministry of Planning and Development Coordination
(CPA reg 7, II.3.i). Other members appointed by the CPA from potential
donor nations.

Iraqi Inspectors General

CPA Order 57 (dated 2 Feb 2004, but not put on the CPA website until March)
establishes these as: “an effective program of audit, investigation and
performance review to provide increased accountability, integrity and
oversight of the ministries and to prevent, deter and identify waste,
fraud, abuse of authority and illegal acts. It establishes independent
Offices of Inspectors General to conduct investigations, audits,
evaluations, inspections and other reviews in accordance with generally
accepted professional standards” Each ministry gets an Inspector-general's
office, with an official appointed by Bremer for a five-year term. The
inspector-general has extensive powers to investigate departmental affairs,
reporting to the government at a high level. This appears to replicate the
system of departmental Inspectors-General in the US (can any Americans shed
more light on this?) Central Bank of Iraq The first post-war legislation on
the CBI was CPA order 18, which prevented the bank from lending to Iraqi
ministries, and removed it from the control of the Ministry of Finance. By
CPA order 56 (6th March), the functions of the central bank are: “achieving
and maintaining domestic price stability, fostering and maintaining a
stable and competitive market-based financial system, and promoting
sustainable growth, employment, and prosperity in Iraq” I've not read the
full order, on the grounds that it's pretty long and I've never read
another banking law with which to compare it. I do understand (via Mike –
have I got this mixed up, Mike?) that it was drafted in London: you can all
insert your own stereotypes about the British political climate vs. that in
Washington or Baghdad. The 'appointing authority' of the bank is the
Administrator+Governing Council, then the Governing Council alone. In a
surreal touch, Paul Bremer will act as a one-man 'legislature' with respect
to the central bank. Senior bank officials (governor, deputy governor,
board members) are nominated by the governing council and approved by the
CPA. These nominations are due by April 6th. The existing governor of the
bank is Sinan al Shabibi, whose WEF biography described him as: “1966, BSc
(Hons) in Economics, College of Economics and Political Sciences, Baghdad
Univ.; 1970, Diploma in Advanced Studies (Economic Development), Univ. of
Manchester; 1971, MA in Economics, Univ. of Manchester; 1975, PhD in
Economics, Univ. of Bristol. 1975-77, Head, Importation and Marketing
Section, Ministry of Oil, Iraq; 1977-80, Chief, Plan Preparation and
Coordination Div., Ministry of Planning, Iraq; 1980-2001, Senior Economist,
United Nations Conference on Trade and Development (UNCTAD). Consultant on
Trade, Debt and Finance. Has undertaken research on financial flows,
economics of disarmament, balance of payments, external debt,
globalization, and the Iraqi Economy. Has managed projects for the
implementation of policy, analytical and institutional aspects of debt
management including the implementation of UNCTAD's Debt Management and
Financial Analysis System (DMFAS) in several Arab countries. Coordinated
UNCTAD's work on OPEC financial flows to other developing countries
resulting in the production of numerous reports on the subject. Various
teaching experience: Baghdad Univ.; Mustansiryah Univ., Iraq; Webster
Univ., Geneva; Geneva Univ. Currently, Governor, Central Bank of Iraq.” CPA

Since January 2004, the CPA has released weekly reports on its economic
activities CPA orders and regulations concerning financial management are
listed in Appendix A.

There doesn't seem to be much consensus within the CPA on who is in charge
– different factions in Baghdad and Washington with different agendas and
personal loyalties. This is mainly American politics, so I'm a little lost.
The CPA does seem to have access to more expertise on economics and
financial policy than on Iraq, with any number of government and other
experts putting in their opinions. So they managed to put out a 60+-page
bank law in September (order 40), while other laws were a few pages of
vague statements. In general, their policy is heavily skewed towards
liberalization. For example one CPA position is 'Director of Private Sector
Development', which includes “specific responsibility for helping the
state-owned enterprises resume normal operations” and seems to be
interpreted by the current occupant, Thomas C. Foley, as chief advocate of
privatisation. Mr. Foley, incidentally, has made significant donations to
the Republican party , and is a friend and supporter of George Bush . To
add to the mix of roles the office's email is
foreigninvestment@orha.centcom.mil.

The CPA website lists its economic priorities as: "Build financial market
structures "Develop transparent budgeting and accounting arrangements
"Develop framework for sound public sector finances and resource allocation
"Pay reform for public employees "Private sector initiatives "Commence
reform of tax systems "Remove subsidies/develop social safety net
"Implement policy towards State-owned Enterprises (SOEs) "Design oil trust
fund "Lay foundations for an open economy "Pursue national strategy for
Human Resources Development This represents part of the CPA's wider target
of improving security, essential services, the economy, governance and
strategic communications.

CPA Regulation 7 (5/12/03) appears to devolve to the Governing Council a
good deal of responsibility for coordinating external financial assistance:
“The CPA recognizes that, as stated in Resolution 1511, the Governing
Council and its ministers are the principal bodies of the Iraqi interim
administration, which, without prejudice to its further evolution, embodies
the sovereignty of Iraq during the period of transition, and that,
consistent with Resolutions 1483 and 1511, these bodies have the authority
to carry out the functions and responsibilities set forth in this
Regulation. Any additional authority the CPA has with respect to such
functions and responsibilities is hereby delegated to the Governing
Council, for further delegation as it deems appropriate, consistent with
this Regulation” This may not be as sweeping as it seems, for several
reasons: 1.It does no more than say 'we'll abide by the security council
resolution'. Any ambiguities there are simply carried on 2.There are plenty
of ambiguities in UNSCRs 1483 and 1511. Not only were they, like most
resolutions, drafted to allow plenty of ambiguity, but these documents
quickly become irrelevant in such a fast-changing context. 1483 was passed
back in May, when there was no governing council and the 'Authority' was
the only body on the ground to which power could be devolved. 1511 does
determine that the GC and cabinet “are the principal bodies of the Iraqi
interim administration” and encourages international donors to work with
them. But it doesn't transfer control of specific economic instruments such
as the Development Fund for Iraq. 3.A good part of the money involved comes
from the US, either directly or via the IMF, World Bank, etc. US policy
will still have an extremely loud voice in Iraq. 4.“The functions and
responsibilities set forth in this regulation” refers only to International
Donor Assistance. The CPA continues to see itself as in charge of wider
financial management – just this week they've introduced a new law
governing the Central Bank (order 56) CPA Program Management Office “The
Iraq Program Management Office (PMO) manages the $18.4 billion appropriated
by the US Congress to support the reconstruction of Iraqi infrastructure.
In broadest terms, this office is responsible for all activities associated
with program, project, asset, construction and financial management of that
portion of the reconstruction effort undertaken by the US” The figure of
$18.4 billion apparently refers to the $18.649bn appropriation made through
the 'Emergency Supplemental Appropriations Act for Defense and for the
Reconstruction of Iraq and Afghanistan, FY 2004' (Public Law 108-106 ),
less allocations of $110 million for Liberia and Sudan, and $100 million
for Jordan. At least $1,275,100,000 is ringfenced for Afghanistan , and
much of the rest is required to support operations in both Iraq and
Afghanistan. Judging from its website and from media reports, the PMO is
noticeably targeted towards an American corporate audience. Most contracts
appear to have been channelled through US-based corporations . The Office
considers that its primary responsibility is “to ensure Americans receive
the best value possible from their investment into the Iraqi infrastructure
for the benefit of the Iraqi people ” The administration of this office
involves an extreme form of outsourcing: “The PMO uses an interesting
management structure where a "nucleus" of U.S. government employees, along
with some representation from Iraq and other nations, represent the
"owner's" interest in the enterprise. Contractors are hired to provide the
program management, both on an overall scale, as well as in each of the
construction sectors. The sectors are oil, electricity, public works &
water, security & justice, transportation & communications, and buildings,
education & health. Other contractors are assigned work within those
sectors to perform the construction tasks. ” The Program Management office
is led by Rear Admiral David J. Nash, a retired Navy engineer and manager
with Parsons Brinkerhoff Construction Services In theory, three deputy
directors are appointed, one US military representative, one from the US
Agency for International Development (USAID), and an Iraqi. The two
American deputies are Major General Ronald L. Johnson and Lawrence
Crandall, respectively. No Iraqi deputy has yet been appointed. The PMO
website contains more organisational information United States Agency for
International Development (USAID) “USAID assists Iraqis in reconstructing
their country by working within the Coalition Provisional Authority (CPA).
USAID programs are implemented in coordination with the United Nations,
World Bank, International Monetary Fund (IMF), Coalition country partners,
nongovernmental organizations (NGOs), and private sector partners. The
USAID Mission in Iraq carries out programs in education, health care, food
security, infrastructure reconstruction, airport and seaport management,
economic growth, community development, local governance, and transition
initiatives. The USAID Mission in Iraq implements programs in four
strategic areas:
 - Restoring Essential Infrastructure
 - Supporting Essential Health and Education
 - Expanding Economic Opportunity
 - Improving Efficiency and Accountability of Government” USAID is the main
US foreign aid agency, and was initially central to US aid operations in
Iraq. USAID's function in awarding reconstruction contracts now appears to
have been passed to the Program Management Office . USAID has awarded
twelve contracts and five grants for reconstruction work in war-torn Iraq.
All of these have been awarded to American companies. Four draft
procurement actions have been announced but not yet awarded. There has been
heavy criticism of the USAID-led contracting process, which initially
restricted contracts to American companies , and then to those from
countries which participated in the Iraq war . The USAID office of the
inspector-general is required to audit US expenditure in Iraq, including
through the Iraq Relief and Reconstruction Fund, and has been allocated a
budget for this by Congress . The Office of the Inspector-general has
produced a number of reports and letters to Congress Iraq Relief and
Reconstruction Fund Section 2202 of Public law 108-106 requires transparent
and fair procedures for the allocation of contracts from the IRRF . Section
2207 of this law required the OMB and CPA to submit by 5 Jan 2004 a report
on the proposed uses of IRRF funds, and quarterly reports after that. This
report gives funding plans for 2004-5: .


Development Fund for Iraq This is an extremely important fund, acting in
effect as the budget for Iraq. Administered by the CPA, with funds held
primarily in New York. There are 2 sources of authority governing the DFI,
UN Security Council resolutions (1483 and 1511) and CPA laws (regulations 2
and 3) Administration UN Security Council resolution 1483: “13. Notes
further that the funds in the Development Fund for Iraq shall be disbursed
at the direction of the Authority, in consultation with the Iraqi interim
administration, for the purposes set out in paragraph 14 below;” Since 19
June 2003, payments from the DFI have been administered by the Program
Review Board (see below). Auditing In theory, the DFI is rigorously audited
by the International Advisory and Monitoring Board (see below). In
practise, the IAMB wasn't set up until 5 months after the DFI, and hasn't
yet got round to doing any auditing, let along moving to Iraq. Indirectly,
the UN secretary-general should be reporting to the security council on the
DFI's work (by para 24 of UNSCR 1483). Some donations have also been made
to the fund. According to an Iraq Revenue Watch report , the DFI had spent
about $1.5billion without any auditing, before the establishment of the
IAMB. In particular: “ Many UN officials believe that Iraqi oil revenue
should not have been spent until the IAMB was functioning. Others are also
dissatisfied with the Development Fund's lack of transparency. Members of
Congress have called for an investigation into allegations that the US-led
Coalition Provisional Authority allowed Kellogg, Brown and Root, a
subsidiary of Halliburton, to purchase $600 million worth of fuel at
inflated prices with Iraqi oil money.” PURPOSES CPA Order 2 and UNSCR1483
use essentially the same language to describe the DFI's aims, “to meet the
humanitarian needs of the Iraqi people, for the economic reconstruction and
repair of Iraq’s infrastructure, for the continued disarmament of Iraq, and
for the costs of Iraqi civilian administration, and for other purposes
benefiting the people of Iraq;” CPA order 2 replaces the last clause of
this with “and for other purposes the Administrator deems to be for the
benefit of the people of Iraq." FUNDS. UNSCR 1483 (para 17) transferred to
the fund $1bn from the Oil for Food account, and any money remaining in the
account after outstanding payments. Para 20 diverts to the DFI all oil
revenue, less 5% in reparations for the 1991 Gulf War. Para 23 requires the
transfer to the DFI of foreign assets of Saddam Hussein, but many countries
have been slow to comply (see the re-iteration of this demand in
UNSCR1511); I'm not sure to what extent this problem has now been solved.
The DFI held about $5 billion in early December 2003 . According to the
CPA, it had dispersed by $5,330,304,430.02 by 5 March 2003 LEGAL STATUS.
UNSCR1483, para 22, confers on the DFI a degree of legal immunity which I
don't really understand: “22. Noting the relevance of the establishment of
an internationally recognized, representative government of Iraq and the
desirability of prompt completion of the restructuring of Iraq’s debt as
referred to in paragraph 15 above, further decides that, until December 31,
2007, unless the Council decides otherwise, petroleum, petroleum products,
and natural gas originating in Iraq shall be immune, until title passes to
the initial purchaser from legal proceedings against them and not be
subject to any form of attachment, garnishment, or execution, and that all
States shall take any steps that may be necessary under their respective
domestic legal systems to assure this protection, and that proceeds and
obligations arising from sales thereof, as well as the Development Fund for
Iraq, shall enjoy privileges and immunities equivalent to those enjoyed by
the United Nations except that the above mentioned privileges and
immunities will not apply with respect to any legal proceeding in which
recourse to such proceeds or obligations is necessary to satisfy liability
for damages assessed in connection with an ecological accident, including
an oil spill, that occurs after the date of adoption of this resolution;”

The CPA has a page on the DFI . On 10 June 2003, Iraq Revenue Watch
released a commentary on the DFI Program Review Board The PRB was
established by CPA Regulations 2 and 3. According to regulation 2, the PRB:
“reviews all competing requirements for the relief and recovery of Iraq,
assesses all available resources, and, in consultation with the Iraqi
interim administration, when established, develops for the approval of the
Administrator spending plans, consistent with a comprehensive budgetary
framework, that identify prioritized requirements for proposed
disbursements from the Fund; considers in this process information provided
by the CPA International Coordination Council, the International Advisory
and Monitoring Board, and other entities, as appropriate” Membership Voting
members. 1.Chairman (appointed by CPA administrator)CPA officials:
directors of Economic Policy, Civil Affairs Policy, Operations, and
Security Affairs, and USAID Iraq mission 2.Representatives of Commander of
coalition forces, Iraqi ministry of finance, UK, Australia, and the Council
for International Coordination. 3.When taking action on any matter directly
relating to the disposition of funds appropriated by the U.S. Congress, the
voting membership of the Board also shall include authorized
representatives of the U.S. Department of Defense, U.S. Department of
Treasury and U.S. Department of State. With approval of the Administrator,
a CPA Director who serves as a voting member may serve concurrently as an
authorized representative of the U.S. Departments of Defense, Treasury or
State. Non-voting members: CPA Comptroller, CPA General Counsel, Program
Coordinator of the Board, Authorized representatives of U.S. Office of
Management and Budget, U.S. Office of the Secretary of Defense,
International Monetary Fund, World Bank, U .N. Special Representative of
the Secretary General, International Advisory and Monitoring Board Duties
·General. The Board shall be responsible for recommending expenditures of
resources from the Development Fund for Iraq and other resources identified
in subsection 6 (3) of this Regulation, in a manner that meets the
interests of the people of Iraq, furthers CPA's policy objectives, and
comports fully with the CPA's stewardship and fmancial management duties
under applicable laws and regulations, including United Nations Security
Council Resolution 1483 (2003). The Board shall not be responsible for
overseeing the manner in which approved spending requirements are executed.
·Funding Plan. The Board shall be responsible for reviewing all identified
requirements for the resources for which the Board is responsible;
prioritizing these requirements; and integrating the prioritized
requirements into a funding plan that forecasts available resources,
recommends allocations of those resources, consistent with the purposes for
which they are lawfully available and the relative priorities of all
identified spending requirements; and sets forth the justification for the
proposed expenditures and the recommended manner in which the expenditures
should be executed (i.e., by contract or otherwise). In performing this
function, the Board shall consider relevant infonnation concerning relief
and recovery efforts in Iraq and related budgeting documents, including the
Iraqi Ministry of Finance budget of Iraqi resources. ·Responsible for:
oFunds appropriated for such purposes by the US Congress oIraqi property
lawfully vested in the US Treasury, to the extent that the Secretary of
Defense is designated with authority to use such property to assist the
Iraqi people and assist in the reconstruction of Iraq oIraqi state- or
regime-owned cash, funds, realizable securities, or other state- or
regime-owned movable property seized in Iraq consistent with the laws and
usages of war oThe Development Fund for Iraq

Administration CPA memorandum 4 (20 August 2003) provides rules for the
activities of the PRB. Day-to-day administration is carried out by the
Program Review Committee. All proposed funding plans require approval from
the CPA administrator Transparency The PRB's activities are recorded in
some detail on the CPA website . This includes minutes of meetings, and
details of disbursements. International Advisory and Monitoring Board “The
purpose of the International Advisory and Monitoring Board (IAMB) shall be
to promote the objectives set forth in United Nations Security Council
Resolution 1483 (2003) (resolution 1483) of ensuring that the Development
Fund for Iraq (DFI) is used in a transparent manner for the purposes set
out in operative paragraph 14 of that resolution and that export sales of
petroleum, petroleum products and natural gas from Iraq are made consistent
with prevailing international market best practices.” UNSCR 1483 required
the establishment of the IAMB: “12. Notes the establishment of a
Development Fund for Iraq to be held by the Central Bank of Iraq and to be
audited by independent public accountants approved by the International
Advisory and Monitoring Board of the Development Fund for Iraq and looks
forward to the early meeting of that International Advisory and Monitoring
Board, whose members shall include duly qualified representatives of the
Secretary-General, of the Managing Director of the International Monetary
Fund, of the Director-General of the Arab Fund for Social and Economic
Development, and of the President of the World Bank;” This was not
implemented until October 2003. In the meantime the USA proposed a set of
terms of reference, envisaging a toothless body with the CPA appointing the
first chair and 5 non-voting members). Unlike the final draft, it does not
propose the creation of a secretariat for the IAMB, an omission which would
have made it reliant on the CPA for administrative support . Under French
and German pressure , UNSCR 1511 (para 23) pushed for the creation of the
IAMB, which was finally established in October. Since then, it has achieved
very little. In 3 meetings so far (9/12/03, 22/12/03, 12/2/04), it has not
appointed auditors, or found qualified Iraqi observers as required in their
terms of reference. As far as I can tell no office has been established in
Iraq (at least, the IAMB is meeting in Kuwait). The IAMB now has a website
at www.iamb.info, although this currently contains very little information.
UNSCR1483 (para 24) requires the UN secretary-general to report to the
security council on the work of the IAMB. I'm not sure whether this has
happened, or in what form – so far, he can't have had much to say.
Membership (dictated by UNSCR 1483, para 12): The International Monetary
Fund: Mr. Bert E. Keuppens, Senior Advisor, Finance Department; The United
Nations: Mr. Jean-Pierre Halbwachs, Assistant Secretary General and
Controller; (the UN representative will chair meetings for the first year)
The World Bank: Mr. Fayezul Choudhury, Vice-President and Controller. The
Representative of the Head of the Arab Fund for Economic and Social
Development is to be named shortly The IMF provides biographies of IAMB
members. INTERNATIONAL RECONSTRUCTION FUND FACILITY “a mechanism which will
allow governments to contribute to the rebuilding of Iraq's economy and
infrastructure through projects administered by UN agencies and the World
Bank. The Facility will have two trust funds operating under joint UN-World
Bank coordination. Donors will have the option of channeling resources
through the World Bank Iraq Trust Fund, to be administered by the Bank,
and/or the UNDG Iraq Trust Fund, to be administered by the United Nations
Development Program (UNDP) on behalf of itself and other participating UN
organizations. Beginning in 2004, funding from the Facility will be used to
address priorities identified in the Needs Assessment carried out in Iraq
this past summer by the World Bank and the United Nations Development Group
(UNDG), in consultation with the International Monetary Fund.”

“The International Reconstruction Fund Facility for Iraq (IRFFI) is being
jointly operated by the World Bank and the United Nations group. Both
international bodies will work together until 2007”
 The IRFF is not yet based in Iraq, for security reasons, and has no
immediate plans to relocate there. The Iraqi Strategic Review Board will
guide donors and make the final decision on recommendations from the
Ministries of Planning and Finance. The Iraqi Ministry of Planning, renamed
the Ministry of Planning and Development Cooperation (MoPDC) will serve as
the Interim Iraqi Administration's primary link to the Facility and will
ensure that funds are equitably distributed . The fund will focus on
technical assistance, quick-impact projects and transition activities that
need to be implemented rapidly and flexibly . Many (but not all) of the
pledges made at the Madrid conference of 23-4 October 2003 were channelled
through the IRFF. These pledges totalled £13.61 billion, including $2.16
billion in 2004, although it is not clear how many of these commitments
have been fulfilled, and how much money is controlled by the IRFF. The
Daily Star (Lebanon) reports that pledges worth a further $1bn were made at
a March donors' conference in Abu Dhabi, but again it is unclear how many
of these donations make use of the IRFF . At the same time, the IRFF held
its first preparatory meeting in Abu Dhabi on 28 Feb 2004 . Thus, it does
not appear to have been active in providing funding for Iraq. UN-World Bank
Trust Fund Facility This is referred to from time to time (sometimes just
as the “World Bank Trust Fund Facility”). I suspect it's the same as the
IRFF, but I'm not sure – anyone know?


Appendix A: Relevant CPA Orders and Regulations CPA laws establishing
relevant bodies The Development Fund for Iraq (Regulation 2, 15 June 2003)
Program Review Board (Regulation 3, 19 June 2003) Establishment of the
Iraqi Property Reconciliation Facility (Regulation 4, 26 June 2003 Council
for International Coordination (Regulation 5, 17 June 2003 Governing
Council of Iraq (Regulation 6, 13 July 2003 International Donor Assistance
(Regulation 7, 5 December 2003 Delegation of Authority Regarding
Establishment of a Property Claims Commission (Regulation 8, 14 January
2004 Iraqi Inspectors General (Order 57, 10 February 2004 CPA laws
concerning the seizure of assets Dissolution of Entities (Order 2, 23
August 2003). This gives the CPA control over assets of the Baath party and
the former goverment of Iraq. Note that the dissolution of the Board of
Supreme Audit enacted in this order was repealed by Order 34 (21 September
2003) Management of Property and Assets of the Iraqi Baath Party (Order 4,
25 May 2003. This elaborates on the asset-seizure provisions of Order 2,
for example by establishing a Confiscation Appeals Tribunal. Assets are
held by the CPA which will "hold [them] in trust and for the use and
benefit of the people of Iraq". Management and Use of Iraqi Public Property
(Order 9, 8 June 2003. This establishes procedures for the use and
allocation of seized property by the CPA. Confiscation of Property Used In
Or Resulting From Certain Crimes (Order 25,21 September 2003 Amendment To
Coalition Provisional Authority Order Number 2 (Order 34,1 September 2003).
This reinstates the Board of Supreme Audit CPA laws concerning Trade policy
and liberalisation Licensing Telecommunications Services and Equipment
(Order 11, 9 June 2003). This establishes CPA licensing of commercial radio
and telecommunications. Non-commercial broadcasts are exempt. Trade
Liberalization Policy (Order 12, 08 June 2003). This suspends customs
duties on almost all goods. Exceptions are made to prohibit export of some
foods and animals, and of many basic materials (wood, water pipes, etc),
and import of weapons. Foreign Investment (Order 39, 21 September 2003).
This controversial law allows foreign investors great scope for investment
in Iraq. Restrictions are imposed on foreign investment in the oil and
financial sectors, and on foreign ownership of real estate. Amended by
Order 46 Amendment to Order 39 (Order 46, 21 December 2003 Suspension of
Exclusive Agency Status of Iraqi State Company for Water Transportation
(Order 51, 21 January 2004 CPA laws concerning Fiscal Management Measures
to Insure the Independence of the Central Bank of Iraq (Order 18, 7 July
2003). This prevents the Central Bank of Iraq lending to government
ministries, and allows it to set monetary policy without the approval of
the Ministry of Finance Trade Bank of Iraq (Order 20, 17 July 2003). This
law establishes a bank, underwritten by and distributing profits to the
Development Fund for Iraq, to facilitate import and export of goods and
services Bank Law (Order 40, 24 September 2003 New Iraqi Dinar Banknotes
(Order 43, 15 October 2003 Central Bank Law (Order 56, 08 March 2004)

CPA laws concerning Public-sector financial management Reform of Salaries
and Employment (Order 30, 08 September 2003 Regulation of Oil Distribution
(Order 36, 03 October 2003 Pensions for Judges (Order 52, 14 January 2004
Public Defender's Fees (Order 53, 16 January 2004 Public Sector Death and
Disability Benefits (Order 63, 06 March 2004 CPA laws concerning taxation
Tax Strategy for 2003 (Order 37, 21 September 2003). This suspended most
taxes (including income tax and property rent tax) from April-December
2003. Exceptions are hotel and restaurant tax, property transfer tax, car
sale fee, and petrol excise duties. Coalition forces, the CPA,
international organisations and governments are exempt from taxation.
Future tax rates will not exceed 15% Reconstruction Levy (Order 38, 19
September 2003)This imposes a 5% import tariff from 2004-2006, with
proceeds going to reconstruction and assistance to Iraq. Exemptions are
made for humanitarian goods (books, medicine, food, clothing, etc) and for
the CPA, coalition forces, foreign governments and NGOs. Amended by order
47 Amendment to Order 38 (Order 47, 1 January 2004) Tax Strategy for 2004
(Order 49, 20 February 2004)



Appendix B: Extracts from UN Security Council Resolutions 1483 and 1511

1483 (22 May 2003) 12. Notes the establishment of a Development Fund for
Iraq to be held by the Central Bank of Iraq and to be audited by
independent public accountants approved by the International Advisory and
Monitoring Board of the Development Fund for Iraq and looks forward to the
early meeting of that International Advisory and Monitoring Board, whose
members shall include duly qualified representatives of the
Secretary-General, of the Managing Director of the International Monetary
Fund, of the Director-General of the Arab Fund for Social and Economic
Development, and of the President of the World Bank; 13 Notes further that
the funds in the Development Fund for Iraq shall be disbursed at the
direction of the Authority, in consultation with the Iraqi interim
administration, for the purposes set out in paragraph 14 below; 14.
Underlines that the Development Fund for Iraq shall be used in a
transparent manner to meet the humanitarian needs of the Iraqi people, for
the economic reconstruction and repair of Iraq\x{2019}s infrastructure, for
the continued disarmament of Iraq, and for the costs of Iraqi civilian
administration, and for other purposes benefiting the people of Iraq; 15.
Calls upon the international financial institutions to assist the people of
Iraq in the reconstruction and development of their economy and to
facilitate assistance by the broader donor community, and welcomes the
readiness of creditors, including those of the Paris Club, to seek a
solution to Iraq's sovereign debt problems; ... 17. Requests further that
the Secretary-General transfer as soon as possible to the Development Fund
for Iraq 1 billion United States dollars from unencumbered funds in the
accounts established pursuant to paragraphs 8 (a) and 8 (b) of resolution
986 (1995), restore Government of Iraq funds that were provided by Member
States to the Secretary-General as requested in paragraph 1 of resolution
778 (1992), and decides that, after deducting all relevant United Nations
expenses associated with the shipment of authorized contracts and costs to
the Programme outlined in paragraph 16 (c) above, including residual
obligations, all surplus funds in the escrow accounts established pursuant
to paragraphs 8 (a), 8 (b), 8 (d), and 8 (f) of resolution 986 (1995) shall
be transferred at the earliest possible time to the Development Fund for
Iraq; ... 20. Decides that all export sales of petroleum, petroleum
products, and natural gas from Iraq following the date of the adoption of
this resolution shall be made consistent with prevailing international
market best practices, to be audited by independent public accountants
reporting to the International Advisory and Monitoring Board referred to in
paragraph 12 above in order to ensure transparency, and decides further
that, except as provided in paragraph 21 below, all proceeds from such
sales shall be deposited into the Development Fund for Iraq until such time
as an internationally recognized, representative government of Iraq is
properly constituted; ... 22. Noting the relevance of the establishment of
an internationally recognized, representative government of Iraq and the
desirability of prompt completion of the restructuring of Iraq\x{2019}s
debt as referred to in paragraph 15 above, further decides that, until
December 31, 2007, unless the Council decides otherwise, petroleum,
petroleum products, and natural gas originating in Iraq shall be immune,
until title passes to the initial purchaser from legal proceedings against
them and not be subject to any form of attachment, garnishment, or
execution, and that all States shall take any steps that may be necessary
under their respective domestic legal systems to assure this protection,
and that proceeds and obligations arising from sales thereof, as well as
the Development Fund for Iraq, shall enjoy privileges and immunities
equivalent to those enjoyed by the United Nations except that the
abovementioned privileges and immunities will not apply with respect to any
legal proceeding in which recourse to such proceeds or obligations is
necessary to satisfy liability for damages assessed in connection with an
ecological accident, including an oil spill, that occurs after the date of
adoption of this resolution; 23. Decides that all Member States in which
there are: (a) funds or other financial assets or economic resources of the
previous Government of Iraq or its state bodies, corporations, or agencies,
located outside Iraq as of the date of this resolution, or (b) funds or
other financial assets or economic resources that have been removed from
Iraq, or acquired, by Saddam Hussein or other senior officials of the
former Iraqi regime and their immediate family members, including entities
owned or controlled, directly or indirectly, by them or by persons acting
on their behalf or at their direction, shall freeze without delay those
funds or other financial assets or economic resources and, unless these
funds or other financial assets or economic resources are themselves the
subject of a prior judicial, administrative, or arbitral lien or judgement,
immediately shall cause their transfer to the Development Fund for Iraq, it
being understood that, unless otherwise addressed, claims made by private
individuals or non-government entities on those transferred funds or other
financial assets may be presented to the internationally recognized,
representative government of Iraq; and decides further that all such funds
or other financial assets or economic resources shall enjoy the same
privileges, immunities, and protections as provided under paragraph 22; 24.
Requests the Secretary-General to report to the Council at regular
intervals on the work of the Special Representative with respect to the
implementation of this resolution and on the work of the International
Advisory and Monitoring Board and encourages the United Kingdom of Great
Britain and Northern Ireland and the United States of America to inform the
Council at regular intervals of their efforts under this resolution; 1511
(16 October 2003) 20. Appeals to Member States and the international
financial institutions to strengthen their efforts to assist the people of
Iraq in the reconstruction and development of their economy, and urges
those institutions to take immediate steps to provide their full range of
loans and other financial assistance to Iraq, Working with the Governing
Council and appropriate Iraqi ministries; 21. Urges Member States and
international and regional organizations to support the Iraq reconstruction
effort initiated at the 24 June 2003 United Nations Technical
Consultations, including through substantial pledges at the 23-24 October
2003 International Donors Conference in Madrid; 22. Calls upon Member
States and concerned organizations to help meet the needs of the Iraqi
people by providing resources necessary for the rehabilitation and
reconstruction of Iraq's economic infrastructure; 23.Emphasizes that the
International Advisory and Monitoring Board IAMB referred to in paragraph
12 of resolution 1483 (2003) should be established as a priority, and
reiterates that the Development Fund for Iraq shall be used in a
transparent manner as set out in paragraph 14 of resolution 1483 (2003);
24. Reminds all Member States of their obligations under paragraphs 19 and
23 of resolution 1483 (2003) in particular the obligation to immediately
cause the transfer of funds, other financial assets and economic resources
to the Development Fund for Iraq for the benefit of the Iraqi people;

i.
http://www.weforum.org/site/knowledgenavigator.nsf/Content/Hafedh%20Mehdi
ii. al-Zaman, via
http://www.juancole.com/2003_09_01_juancole_archive.html#106447046341252932
iii.
http://www.juancole.com/2003_09_01_juancole_archive.html#106438442815160722
iv.
http://www.weforum.org/site/knowledgenavigator.nsf/Content/Allawi%20Ali?open
v. http://www.middleeastreference.org.uk/iraqcpa.html vi.
http://www.tradearabia.com/routes/sections/News.asp?Article=64766&Sn=CONS
vii. http://www.commondreams.org/headlines03/0518-01.htm viii.
http://www.dailystar.com.lb/business/04_03_04_d.asp ix. Financial Times, 20
January 2004, via Radio Free Europe/Radio Liberty Iraq Report, Vol. 7, No.
4, January 30, 2004 x.
http://www.gulf-news.com/Articles/news.asp?ArticleID=112409 xi. 18/6/03,
http://www.cpa-iraq.org/regulations/20030618_20030618_CPANOTICE_Council_International_Coop.html.pdf
xii.
http://www.weforum.org/site/knowledgenavigator.nsf/Content/The%20Future%20of%20Iraq%20%E2%80%93%20Workshop_2004?open
xiii. http://www.cpa-iraq.org/economy/consolidated/index.html xiv.
http://iraqcoalition.org/economy/priv_sect_dvlpt.html xv.
http://www.tpj.org/pioneers/thomas_foley.html xvi.
http://financialtimes.printthis.clickability.com/pt/cpt?action=cpt&expire=&urlID=7155770&fb=Y&partnerID=1704
xvii. from construction contract list at
http://www.rebuilding-iraq.net/pdf/projects/construction_contracts_awarded.pdf
xviii.
http://frwebgate.access.gpo.gov/cgi-bin/useftp.cgi?IPaddress=162.140.64.88&filename=publ106.108&directory=/diskb/wais/data/108_cong_public_laws
xix. $287,000,000 for 'foreign military financing', $672,000,000 for
accelerated economic assistance in Afghanistan, $38,100,000 for USAID
operating expenses in Afghanistan, and 3 allocations of $73,000,000,
$170,000,000, and $35,000,000 for anti-drug programmes. Public law 108-106
(2004) xx. http://rebuilding-iraq.net xxi. List of construction contracts,
http://www.rebuilding-iraq.net/pdf/projects/construction_contracts_awarded.pdf.
List of non-construction contracts,
http://www.rebuilding-iraq.net/pdf/projects/non_construction_contracts_awarded.pdf]
xxii.
http://www.rebuilding-iraq.net/portal/page?_pageid=33,32248&_dad=portal&_schema=PORTAL
xxiii. Program Management Office website,
http://www.rebuilding-iraq.net/portal/page?_pageid=33,32246&_dad=portal&_schema=PORTAL
xxiv.
http://www.rebuilding-iraq.net/portal/page?_pageid=33,35900&_dad=portal&_schema=PORTAL
xxv. Program Management Office website,
http://www.rebuilding-iraq.net/portal/page?_pageid=33,32246&_dad=portal&_schema=PORTAL
xxvi. For example, a diagram of responsibilities at
http://www.rebuilding-iraq.net/pdf/pmo_concept_of_ops_organization.pdf
xxvii. http://www.usaid.gov/iraq/ xxviii. 'BECHTEL BEATS AMEC TO $ 1.8BN
CONTRACT TO REBUILD IRAQ', SAEED SHAH, Independent, 8 January 2004 xxix.
Guardian, 18/3/2003, Independent, 18/3/2003, Independent, 12/3/2003 xxx.
“£11bn Iraq work open to British firms”, Roland Watson and James Bone,
Times, November 20, 2003 xxxi. “In addition, for direct support of
operations in Iraq, $1,900,000, which shall be transferred to and merged
with ``Operating Expenses of the United States Agency for International
Development Office of Inspector General'' for financial and performance
audits of the Iraq Relief and Reconstruction Fund and other assistance to
Iraq, to remain available until September 30, 2005.” Public law 108-106
(2004),
http://frwebgate.access.gpo.gov/cgi-bin/useftp.cgi?IPaddress=162.140.64.88&filename=publ106.108&directory=/diskb/wais/data/108_cong_public_laws
xxxii. http://www.usaid.gov/oig/iraq_reports.html xxxiii.
http://www.usaid.gov/oig/iraq_letters.html xxxiv.
http://frwebgate.access.gpo.gov/cgi-bin/useftp.cgi?IPaddress=162.140.64.88&filename=publ106.108&directory=/diskb/wais/data/108_cong_public_laws
xxxv. http://www.whitehouse.gov/omb/legislative/index.html. The main text
of the report can be found at
http://www.whitehouse.gov/omb/legislative/20040105-sec2207_main_report.pdf
xxxvi. http://www.iraqrevenuewatch.org/reports/120503.pdf xxxvii. UN
Security Council Resolution 1483, paragraph 14 xxxviii.
http://www.iraqrevenuewatch.org/reports/120503.pdf xxxix.
http://www.cpa-iraq.org/budget/DFI_05mar2004.xls xl.
http://www.cpa-iraq.org/budget/DFI_intro1.html xli.
http://www.iraqrevenuewatch.org/documents/dfi.shtml xlii.
http://www.cpa-iraq.org/budget/program_review_board.html xliii. IAMB terms
of reference, http://www.iamb.info/tor.htm xliv.
http://www.casi.org.uk/info/cpa/iamb030611.pdf xlv.
http://www.casi.org.uk/info/undocs/scres/2003/030909amendments.pdf xlvi.
http://www.imf.org/external/np/sec/pr/2003/pr03209.htm xlvii. UNDP press
release, 11 December 2003,
http://www.undp.org/dpa/pressrelease/releases/2003/december/dec1103.html
xlviii. Daily Star (Lebanon), 4 March 2004
http://www.dailystar.com.lb/business/04_03_04_d.asp xlix.
http://www.un.org/apps/news/story.asp?NewsID=9188&Cr=iraq&Cr1=] l. Daily
Star (Lebanon), 19 December 2003,
http://www.dailystar.com.lb/business/19_12_03_d.asp li. Daily Star
(Lebanon), 4 March 2004,
http://www.dailystar.com.lb/business/04_03_04_d.asp lii.
http://www.gulf-news.com/Articles/news.asp?ArticleID=112409



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