Obama continues U.S. immunity from claims to Iraq’s oil dollars

May 13, 2010 · Posted in NEWS
By Ben Lando of Iraq Oil Report
Published May 13, 2010

BAGHDAD – U.S. President Barack Obama has extended the protection offered to Iraqi funds kept in the United States since 2003 for yet another year.

The money has been protected by both the United States and United Nations in part to ensure Iraqi revenues aren’t depleted by claims from countries, companies and individuals who seek damages from incidents perpetrated by Saddam Hussein, as well as those who funded Saddam Hussein’s regime through business dealings that went unpaid.

In a notice to the U.S. Congress Wednesday, made public Thursday, Obama wrote that “obstacles to the orderly reconstruction of Iraq, the restoration and maintenance of peace and security in the country, and the development of political, administrative, and economic institutions in Iraq continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.”

Since 2003, Iraq’s revenues, 95 percent of which are from oil sales, have been funneled directly to the Development Fund for Iraq (DFI), an account in the Federal Reserve Bank of New York.

The bank cycles through tens of billions of dollars annually, and also holds a separate currency reserve estimated at $25 billion that stands up the Iraqi dinar.

The DFI is monitored by U.S., U.N., Iraqi and international banking officials for both accurate payments and other revenue flow accounting. Five percent of Iraq’s revenues are set aside to pay reparations to Kuwait and other claimants.

The immunity policy keeps the funds free from being frozen by orders of attachment, which might otherwise threaten to cripple the economy and reconstruction efforts in Iraq.

By the end of this year an all-Iraqi oversight committee is to take over the DFI.

“The Iraqi government continues to take steps to resolve debts and settle claims arising from the actions of the previous regime,” Obama wrote.

“Before the end of the year, my Administration will review the Iraqi government’s progress on resolving these outstanding debts and claims, as well as other relevant circumstances, in order to determine whether the prohibitions … on any attachment, judgment, decree, lien, execution, garnishment, or other judicial process with respect to the Development Fund for Iraq, the accounts, assets, and property held by the Central Bank of Iraq, and Iraqi petroleum-related products, should continue in effect beyond December 31, 2010, which are in addition to the sovereign immunity ordinarily provided to Iraq as a sovereign nation under otherwise applicable law.”


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