Iraq and the US

US Sec. of State John Kerry’s Speech in Iraq US Sec. of State John Kerry’s Speech in Iraq

Posted on 27 March 2013.

The following is the text of the speech and press conference of US Secretary of State, John Kerry, in Baghdad:

Secretary Kerry: Good afternoon. As-Salāmu `Alaykum. I’m glad to be here with all of you, and it’s a pleasure for me to be able to be back in Iraq. I haven’t been able to be here for a little bit of time now, so the difference for me is very noticeable in the reduced energy, if you will, and presence of personnel.

I was very pleased to be able to have a chance to affirm to the Iraqi leaders that I met with that the United States continues to stand with the people of Iraq as they work to establish a democracy and a better future. And we are particularly grateful for the efforts of those people who remain so committed to political activity, to engaging in the constitutional process, and who are working for the rights that are guaranteed by the constitution.

This past week, both of our countries marked the 10th anniversary of the beginning of the war here in Iraq, and we were, all of us, reminded of the remarkable sacrifices of so many Iraqis and also so many Americans who, together, gave their lives in a common fight to try to build the civil state that the people of Iraq have chosen for themselves.

Iraq today continues – and I saw this in my meetings and felt it in the discussions that I had – continues to face some tough challenges on fulfilling that promise. It is difficult and – it is difficult for some to find the way to strengthen their democratic institutions and develop its full economic potential, and now that our forces are gone, to ensure that it’s going to be able to stand on its own two feet with respect to the security challenges. I want to assure the Iraqi people today that as you recover from four decades of war and dictatorship, and as you courageously face down lingering menace of terrorism, the United States is going to continue to uphold our end of the Strategic Framework Agreement.

It’s also important to recognize where there is, in fact, progress that is measurable. Iraq had one of the fastest-growing economies in the world in 2012, and while inflation stayed at single digits at the same time. For the first time in the lives of many Iraqis, people are now free to express their opinion, they’re free to organize politically as they wish. And anti-trafficking laws have been put in place, a human rights commission is now in place to work to try to protect fundamental freedoms, though we know there is a lot more to do in this arena. New bilateral relationships are strengthening Iraq’s place in the world.

The following is the text of the speech and press conference of US Secretary of State, John Kerry, in Baghdad:

Secretary Kerry: Good afternoon. As-Salāmu `Alaykum. I’m glad to be here with all of you, and it’s a pleasure for me to be able to be back in Iraq. I haven’t been able to be here for a little bit of time now, so the difference for me is very noticeable in the reduced energy, if you will, and presence of personnel.

I was very pleased to be able to have a chance to affirm to the Iraqi leaders that I met with that the United States continues to stand with the people of Iraq as they work to establish a democracy and a better future. And we are particularly grateful for the efforts of those people who remain so committed to political activity, to engaging in the constitutional process, and who are working for the rights that are guaranteed by the constitution.

This past week, both of our countries marked the 10th anniversary of the beginning of the war here in Iraq, and we were, all of us, reminded of the remarkable sacrifices of so many Iraqis and also so many Americans who, together, gave their lives in a common fight to try to build the civil state that the people of Iraq have chosen for themselves.

Iraq today continues – and I saw this in my meetings and felt it in the discussions that I had – continues to face some tough challenges on fulfilling that promise. It is difficult and – it is difficult for some to find the way to strengthen their democratic institutions and develop its full economic potential, and now that our forces are gone, to ensure that it’s going to be able to stand on its own two feet with respect to the security challenges. I want to assure the Iraqi people today that as you recover from four decades of war and dictatorship, and as you courageously face down lingering menace of terrorism, the United States is going to continue to uphold our end of the Strategic Framework Agreement.

It’s also important to recognize where there is, in fact, progress that is measurable. Iraq had one of the fastest-growing economies in the world in 2012, and while inflation stayed at single digits at the same time. For the first time in the lives of many Iraqis, people are now free to express their opinion, they’re free to organize politically as they wish. And anti-trafficking laws have been put in place, a human rights commission is now in place to work to try to protect fundamental freedoms, though we know there is a lot more to do in this arena. New bilateral relationships are strengthening Iraq’s place in the world.

But it would be disingenuous not to come here and say that there is a great deal of work yet to do. The United States is clear-eyed about the challenges that are still presented here in Iraq, including matters of transitional justice, reconciliation, division of authority, allocation of resources, and advancing the rule of law. We know from our own experience how difficult the work of democracy is and can be. Democracy, I would say to our friends in Iraq, is about inclusion and about compromise. When consensus is not possible, those who are dissatisfied should not just walk away from the system, should not just withdraw, just as those who prevail should not ignore or deny the point of view of other people.

If the Iraqi democratic experiment is to succeed, all Iraqis must work together so that they can come together as a nation.  We will continue to build the partnerships between our security and our defense sectors.  But we’re also working to build partnerships in education and culture, energy and trade, finance, technology, transportation, and the rule of law.  And I will be encouraging companies as they deem appropriate to do business here; firms like Ford, Boeing, General Motors, General Electric are doing so right now, and they have done well.

Fundamental to any democracy anywhere is an election.  And the United States is working very closely with the Iraqi electoral commission and with the United Nations in order to ensure the will of the Iraqi people can be reflected through the provincial elections this next month, and then, of course, through the national elections next year.  In my meetings today, I stressed our concern that local elections in two provinces have been delayed, and I urged the cabinet to revisit this decision.  And the Prime Minister said it was appropriate to revisit it with the cabinet.

Iraq’s success will take enormous cooperation.  It’ll take dialogue and it’ll take courage.  It’ll require the resolve to defend the sovereignty of the country and its airspace.  It will take a commitment to being a good neighbor in a difficult neighborhood.  And as Iraqi leaders make difficult decisions in these areas, we are going to work to try to help them succeed.  We all want to see Iraq succeed.  There’s such an enormous investment of our treasure, our people, and our money in this initiative.  The world has an interest in seeing Iraq take a leading role in the region as a functioning democracy, and I believe that if Iraq remains inclusive and cohesive, it has the best chance of succeeding.  And as it grows stronger in that format, working to enforce its constitutional rights, it will find that the United States will work with it to achieve those goals.

Moderator:  We’ll take three questions today.  The first will be from Paul Richter of the LA Times.

Question:  Mr. Secretary, can you tell us what you told Prime Minister Maliki about the flow of Iranian arms through Iraq into Syria, and what specific commitment you got from him to try to start doing something about that?

Secretary Kerry:  We had a very spirited discussion on the subject of the overflights.  And I made it very clear that for those of us who are engaged in an effort to see President Assad step down and to see a democratic process take hold with a transitional government according to the Geneva Communiqué, for those of us engaged in that effort, anything that supports President Assad is problematic.  And I made it very clear to the Prime Minister that the overflights from Iran are, in fact, helping to sustain President Assad and his regime.

So we agreed to try to provide more information with respect to this, but I also made it clear to him that there are members of Congress and people in America who increasingly are watching what Iraq is doing and wondering how it is that a partner in the efforts for democracy and a partner for whom Americans feel they have tried so hard to be helpful – how that country can be, in fact, doing something that makes it more difficult to achieve our common goals, the goal expressed by the Prime Minister with respect to Syria and President Assad.

So my hope is that we’ll be able to make some progress on this, and I’m taking some homework back to Washington with me, and I think the Prime Minister will have discussions here.

Moderator:  The second question will be from Sohar Hamudi from Amar-Iraqiya.

Question:  (In Arabic.)

Secretary Kerry:  Just one minute, please.

Question:  Yes.  (In Arabic.)

Secretary Kerry:  Are you talking about the elections?  Okay.

Well, there are two provinces I mentioned, both in Ninewa and in Anbar, where the election – the provincial election has been suspended.  And from the perspective of the United States, we strongly urge the Prime Minister to take this issue to the cabinet and to see if it can be revisited, because we believe very strongly that everybody needs to vote simultaneously.  The fact is that while security has been put forward as a rationale for that postponement, no country knows more about voting under difficult circumstances than Iraq.

The first election here was conducted under the most extraordinarily difficult circumstances, but Iraqis came out and voted.  So we believe very strongly that all of the countries should vote at the same time in these provincial elections, and we hope that the Prime Minister, through his cabinet, will be able to revisit this issue.  There is still time for that election to take place in those provinces.

Moderator:  The final –

Question:  (Inaudible.)

Moderator:  I’m sorry, there’s – we can’t do follow-ups.

Question:  No, what is my question (inaudible).

Moderator:  My apologies.  Go ahead.

Question:  I’m sorry.  (In Arabic.)

Secretary Kerry:  Oh, that’s why I asked you if you were referring to the elections.  I apologize.  With respect to demonstrations, we believe very strongly that every citizen has the right to have their voice heard.  And under the constitution of Iraq, people have a right to be able to affiliate, to express any political view, and nobody should be penalized for that.

So we urge people to demonstrate peacefully if they choose to demonstrate.  We do not want to see, nor do we advocate anything but peaceful demonstration, but we urge the government to respond to those demonstrations in an appropriate way – not with violence, not with repression, but rather with the openness that a democracy merits.  The country will be stronger for people having the right to be able to express their views in a peaceful way.

Moderator:  The final question will be from Anne Gearan from The Washington Post.

Question:  Mr. Secretary, Moaz al-Khatib has announced his resignation as head of the Syrian Opposition Coalition today.  What is your view of that move and the internal divisions within the group that led up to it?  And are you worried that the group is essentially disintegrating?

And secondly, since this is the first we’ve seen you since the President’s trip, can you tell us how optimistic you are that the Israelis and the Palestinians are really ready to sit down and bargain?  Thank you.

Secretary Kerry:  Thank you very much, Anne.  With respect to Moaz al-Khatib, I’m personally sorry to see him go because I like him on a personal level, and because I have appreciated his leadership.  But the notion that he might resign has, frankly, been expressed by him on many different occasions in many different places, and it is not a surprise.  We have worked very closely with the newly chosen Prime Minister Hitto.  We’ve worked with him in the delivery of aid.  We have confidence about his abilities and the abilities of the Vice President’s and others around him.  And it’s almost inevitable, in the transition of a group such as the opposition, for these kinds of changes to take place as it evolves.

We view this as a continuum.  It’s not about one person.  It’s about President Assad.  It’s about a regime that is killing its own people.  It’s about an opposition that is bigger than one person.  And that opposition will continue, and I am confident personally that ultimately, President Assad is going to either negotiate his way out of office through the Geneva process, or, if he leaves people no choice, the opposition will forcibly change this regime.  But I think that is going to continue, and the United States will continue to support the opposition.

Thank you all.

Question:  With respect to –

Secretary Kerry:  Oh, with respect to the Mideast process, I think the President’s trip to the Mideast was historic in every respect, and I know that the folks in Israel felt its impact.  They were impressed by him, impressed by the vision that he expressed, and I think that his words even after he has left are reverberating.  People are debating and talking, and that is precisely what the President sought to do.

So I think it was an extremely successful visit, a moving one for Israelis.  I know for Prime Minister Netanyahu, whom I saw last night, he felt very strongly that it was an outstanding meeting.  And I know from the President, before he left, that he was very impressed by the discussions he had.  He felt they were the best that he has had to date, and I think the stage has been set for the possibilities that parties can hopefully find a way to negotiations.

Now, I think all of us have learned in the course of the last years, through many presidents and many secretaries of States, there has been no more intractable problem.  And so expressing optimism when you don’t even have negotiations would be foolhardy.  What I have is hope.  I have hope that the President’s words kindled a sense of the possible in the people of Israel and the region and the Palestinians.  I think that he has charged me and others with the responsibility of trying to find out what the way forward is.  And I engaged in some of that discussion yesterday, both with President Abbas as well as with Prime Minister Netanyahu and some of his team.

We have to keep working at this.  We’ve just begun those discussions.  I wouldn’t characterize them in any way except open, candid, and a good beginning, and that’s where I’ll leave it.  Thanks, appreciate it.

 (Source: US Embassy)



One year later, Iraq war's legacy remains unclear

By Chelsea J. Carter and Mohammed Tawfeeq, CNN
December 31, 2012 -- Updated 1908 GMT (0308 HKT)
Source: CNN
STORY HIGHLIGHTS
  • December 31 is the anniversary of "Iraq Day," also known as "Day of Sovereignty"
  • The day marks the official end of the U.S.-led war in Iraq
  • Iraqis and Americans remain uncertain about the country's future
  • U.S. Army captain: "We're all kind of watching ... trying to figure out if it was worth it"

Baghdad, Iraq (CNN) -- When the first U.S. military convoy rolled into 8-year-old Saad Kareem's middle class neighborhood in Baghdad nearly a decade ago, he was scared, even as others around him whistled and danced.

Saad's family is Shiite, and the U.S. invasion brought hope for political and religious freedoms they'd missed under Saddam Hussein's Sunni-dominated regime.

"I was with my mother at the time, holding my mother's hand very tight. I was so scared because I thought that they were coming to kill us," recalled Saad, now 17. "But when I saw my mother smiling, I relaxed."

The safety Saad felt in that moment proved elusive: First there was war, then sectarian strife that pitted Sunni extremists against Shiite militants and brought Iraq to the brink of civil war.

Then came the official end of the war. On December 31, 2011, the country celebrated "Iraq Day" and the departure of U.S. troops. As Iraq prepares to mark the anniversary, also known as the "Day of Sovereignty," last year's celebratory tone has been replaced by a more somber one.

Prime Minister Nuri al-Maliki's political bloc, the Islamic Dawa Party, called on Iraqis not to become divided along sectarian or ethnic lines by "malicious schemes." The country has struggled to define itself, as its government stumbles from one political crisis to another.

Just as the last U.S. troops withdrew, al-Maliki, a Shiite, moved to arrest Vice President Tariq al-Hashimi, a Sunni, who al-Maliki accused of using his security detail as a hit squad.

More recently, a few days before the first Iraq Day anniversary, thousands of Sunnis took to the streets in Anbar province, a major trade thoroughfare to Jordan and Syria, to protest al-Maliki's order to arrest the bodyguards of Finance Minister Rafaie Esawi, a Sunni. The arrest of Esawi's bodyguards came just hours after President Jalal Talabani, a Kurd who is widely viewed as a stabilizing political force in Iraq, left the country to undergo treatment for cancer in Germany.

Iraq's Arab Sunnis and Kurds have accused al-Maliki and his Shiite political party of working to consolidate power in Iraq by cutting them out of the political process, an allegation that comes as U.S. lawmakers raise concerns about Iraq strengthening its ties with Shiite-dominated Iran.

One year after U.S. troops left, much about a post-war Iraq remains unclear -- for the Iraqis recovering from war, and still facing bombs and battles; for Americans re-adjusting to life in the United States and wondering whether their work was worthwhile.

This time last year, there was cautious optimism among Saad's family members. It seemed possible the political instability and violence that plagued Iraq might ebb. In its place, Saad's family hoped a safer, more stable Iraq would emerge.

Today, at Saad's all-male high school in central Baghdad, talk routinely centers on the latest bombing or bubbling sectarian tensions -- Sunni versus Shiite, Arab versus Kurd. There are concerns, Saad said, about the possible return of al Qaeda in Iraq, a group of primarily Sunni extremists bent on reigniting sectarianism. The latest political crisis is split along sectarian lines and has raised fears that political strife could translate into violence on the streets.

Even with a dramatic decline in violence in Iraq from the height of the war, bombings and gun battles remain a near-daily occurrence. A car bomb killed Saad's best friend, and he's no longer allowed to walk to school. His father drives him instead.

Saad has vowed after graduating high school, he will leave Iraq. For good.

"Sometimes," Saad said, "I ask myself why God did not create me in another country."

'I don't think ... I really understood it'

U.S. Army Spec. Brittany Hampton looked out the window of the armored vehicle as it rolled down the highway.

Somehow, it was fitting that the 22-year-old woman who had seen her father off for the start of the Iraq war almost nine years earlier would be among the very last soldiers in the very last vehicle in the very last convoy to leave the country.

"I don't think that day I really understood it," she said nearly a year later.

Last U.S. troops leave Iraq Last U.S. troops leave Iraq

Hampton, a medic, knew crossing from Iraq into Kuwait meant the end of the war for her and her fellow soldiers. But the historic nature of the moment hit her months later, when she was standing in front of the vehicle nicknamed "Praetorian 7" for the elite Roman guard unit that once protected Roman emperors.

It was there, outside a museum at Fort Hood, Texas, it became clear.

Gates close at the Iraq-Kuwait border

"That's sort of when I knew it was a big deal, seeing the truck out there with all these other historic vehicles," she said.

Hampton, who lives in Killeen, Texas, was an "Army brat," the child of a soldier. In the fifth grade, she was assigned to outline what she wanted to be when she grew up, so she wore her father's uniform to school.


It seemed like a natural step to join the Army, and it was no surprise when she got orders to deploy to Iraq.

Her father never really talked about his time there. After his second deployment, he wasn't the same, she said. He refused to go through the drive-in, and he didn't like crowded stores.

It was likely difficult for him to see how she'd changed, she said.

"When he left, I was a little girl," she said. "I had a cell phone and a boyfriend when he came back."

By the time Hampton got to Iraq, the end of the war was in sight. There was still the daily threat of roadside bombs and rocket attacks to contend with, but nothing like her father had seen at the height of the war.

In the year since she rolled across the Iraq-Kuwait border, Hampton got engaged to a fellow soldier.

As she looks toward starting a family, Hampton's made another decision: She's getting out of the Army.

"I honestly don't think I want to put my children through that," she said.

"It's really hard."

'I don't want to live like this'

Ali Adel waited his turn for a haircut in a small barbershop nestled between short, squat buildings near his neighborhood mosque.

One minute, he was making small talk with patrons. The next thing the 20-year-old remembers is lying in a Baghdad hospital bed, writhing in pain.

He had no memory of the November 27 blast, a bombing that took place nearly a year after the last U.S. troops left Iraq.

"I never thought this would happen to me," Adel said, lying in a bed at his family home.

Over the years, Adel had seen the devastation caused by bombings that repeatedly struck his neighborhood in the predominantly Shiite district of Shula. For years following the U.S.-led invasion of Iraq, Sunni extremists targeted the al-Zahraa mosque in his neighborhood with deadly results.

When U.S. troops withdrew from Iraq, Adel was hopeful that maybe the violence, the bombings, might stop.

Adel was 11 during the 2003 invasion. Today, he measures life in Iraq by "before" and "after."

Before the war, when Saddam Hussein was in charge, and after the war, when he was deposed. Before the war, when his family was whole, and after the war, when he lost friends and family members to insurgent attacks.

A month after the bombing, his head remains bandaged from a shrapnel wound. He can't see out of his right eye.

He's counting the days until he can go back to work as a construction day laborer.

"I don't want to live like this, I want to go back to a normal life," he said.

'Trying to figure out if it was worth it'

U.S. Army Capt. Mark Askew had seen some of the very worst of the fighting in Iraq, battling insurgents street by street in 2007 as part of a strategy that saw thousands of American troops push into areas held by Sunni militants and hold it.

Askew also saw positive changes take hold in Iraq, from its military taking responsibility for security to its lawmakers standing up a fledgling democracy.

When he left last year, on the last U.S. military convoy to leave the country, he wondered what would happen to Iraq.

Askew, who is 29, was at West Point when the war began in 2003. He watched its beginnings like many Americans -- on television.

He first stepped foot in Iraq in 2007 as part of then-President George W. Bush's "surge" policy: Push into territory held by Sunni militants and hold it.

His assignment was Mosul, 400 kilometers north of Baghdad, where Iraqi security forces were struggling to hold the city. It was there that Askew first learned the human cost of war: His executive officer was killed in a roadside bomb, leaving him briefly in charge while awaiting a replacement.

"I grew up on my first deployment," said Askew, who lives in Tampa, Florida. "It made me appreciate my family more. It made me appreciate politically what we have."

Askew returned to Iraq in 2011 with a military police unit. He was charged with securing U.S. troops at bases in the southern Shiite heartland where they were routinely targeted by Iranian-backed insurgents.

Even as he left Iraq, he wondered about the country's future: Will Iraq be stable? Will its government align itself with Iran?

The same questions have been asked by a number of Americans, from lawmakers to soldiers, as reports emerge that the United States has warned Iraq against allowing Iran to use its airspace to ship weapons to Syria, its ally.

"We're all kind of watching Iraq right now, and trying to figure out if it was worth it," he said.

'I see no good future for Iraq'

Last year, on "Iraq Day," Mahdi Auda Ghanam's family celebrated.

This year, the 25-year-old's family is in mourning. Ghanam was killed by a car bomb as he walked to a small repair shop he operated in the Shula district. It was the same November attack that wounded Adel.

"We were happy, and I distributed candies to neighbors when the Americans left Iraq last year. We thought the war was over and there would be no more killing and destruction," Ghanam's mother, Mahdiya, said. "I don't know who to blame. They said al Qaeda, but where is al Qaeda? I blame those who don't fear God."

In the months and days before Ghanam's death, he worried the deteriorating security situation, his family said.

Still, he was making plans for the future. He had fallen in love and was going to get married, his mother said. He still played in the neighborhood soccer league, and he was looking for a permanent job with the government.

But with the rise in car bombings, he took precautions.

"So many times, Mahdi canceled a planned trip to go to the ... market to buy stuff for his store never knowing that instead one day he would die inside his store," Ghanam's brother, Ali, said.

The family won't participate in the upcoming elections because they don't believe it will make a difference, he said.

"If you ask me if I am optimistic about the future of Iraq, I really don't have an answer. Maybe a year ago, I would have said I am maybe optimistic. But now I'm just not sure," Ali Ghanam said.

"I see no good future for Iraq if this continues."

CNN's Mohammed Tawfeeq reported from Baghdad, Iraq, and CNN's Chelsea J. Carter from Atlanta.



Is Iraq on Track?

Democracy and Disorder in Baghdad
Essay

Weeks after the last U.S. soldier finally left the country, Iraq is on the road to becoming a failed state, with a deadlocked political system, an authoritarian leader, and a looming threat of disintegration. Baghdad can still pull itself together, but only if Washington starts applying the right kind of democratic pressure -- and fast.

MORNING IN MESOPOTAMIA
Antony J. Blinken

Ned Parker's article "The Iraq We Left Behind" (March/April 2012) gives the impression that Iraq is a hybrid of North Korea and Somalia, part ruthless dictatorship and part lawless wasteland: in short, "the world's next failed state." Leaving aside the inherent contradiction in describing a country as both authoritarian and anarchic, Iraq today bears little resemblance to the caricature portrayed in these pages.

The article glossed over, or ignored altogether, the clear, measurable progress Iraq has made in the few short years since it lurched to the brink of sectarian war. Since U.S. President Barack Obama took office with a commitment to end the war responsibly and initiated the drawdown of 144,000 troops, violence in Iraq has declined and remains at historic lows -- a trend that has continued since the last U.S. troops departed late last year. Weekly security incidents fell from an average of 1,600 in 2007­-8 to fewer than 100 today. Meanwhile, since 2005, oil production, the lifeblood of Iraq's economy, is up 50 percent, to almost three million barrels per day, providing the revenue that enabled lawmakers to pass a $100 billion budget in mid-February. Recent months have also seen unprecedented steps toward Iraq's reintegration with the region, including the appointment of a Saudi ambassador to Baghdad for the first time since 1990, visits to Iraq by senior Emirati and Jordanian officials, the settlement of Iraq's dispute with Kuwait over Saddam Hussein's confiscation of Kuwaiti aircraft, and Baghdad's playing host to the Arab League summit. U.S. military forces were critical to setting the conditions for these achievements. They succeeded, at great cost, in restoring a measure of stability when all seemed lost and in training an Iraqi army that is now defying doubters and capably providing security for the country. These advances created the time and the space for what U.S. Vice President Joseph Biden sees as the most important development in Iraq in recent years: politics supplanting violence as the dominant means for the country's various factions to settle their disputes and advance their interests. 

For the past two years, critics repeatedly and mistakenly warned that a string of political crises, over the election law, the de-Baathification process, the election itself, and the formation of a government, would lead to renewed sectarian violence. Each time, however, the Iraqis resolved their differences through the political process, not violence, with quiet and continuous assistance from the United States. 

Parker lauds as a golden age in Iraqi politics the period from late 2007 through late 2008, which he attributes to the large U.S. troop presence and the U.S. government's focus on promoting democracy. During that purported halcyon era, charges of terrorism leveled against a Sunni Arab politician led followers of the Shiite cleric Muqtada al-Sadr, the Sunni Arab parties, and those loyal to the secular Shiite leader Ayad Allawi to boycott the parliament for eight months, despite the presence of more than 150,000 U.S. troops in the country. A similar boycott early this year, when all U.S. troops were gone, lasted just two months. 

STILL THE ONE

Parker also claims that the Obama administration turned its attention away from Iraq after the last Iraqi election, in March 2010, and abandoned the democratic principles for which the United States had fought. In fact, during the period he describes, the "largely absent" vice president made four visits to Iraq, spoke on the phone dozens of times with senior Iraqi officials from every major bloc, and, at Obama's request, chaired a monthly cabinet-level meeting on Iraq. I and other senior U.S. officials based in Washington, including Deputy National Security Adviser Denis McDonough and Deputy Secretary of State Thomas Nides, each made multiple trips to Iraq. Most important, the U.S. embassy in Baghdad, led by Ambassador James Jeffrey, was as engaged with Iraqi leaders, day in and day out, as at any point since the 2003 invasion. In virtually every meeting and public statement, we reaffirmed the United States' commitment to the rule of law and Iraq's constitution. 

To cite one example, during the lengthy government-formation period that followed the last election, the embassy team and senior officials from Washington shuttled among the parties for months. The president and the vice president were deeply engaged. When the deal was finally sealed, there were four people in the room: Iraqi Prime Minister Nouri al-Maliki; Allawi, the leader of the Iraqiya Party; Massoud Barzani, president of the Kurdish Region; and Ambassador Jeffrey.

As that episode suggests, Iraq's leaders continue to strongly desire U.S. engagement. The United States remains the indispensable honest broker: the only party trusted by, and in daily contact with, all the leading blocs. In virtually every meeting, including when Maliki visited Obama in Washington last December, we have made clear to our Iraqi counterparts that continued U.S. support requires that they compromise across sectarian lines, respect the rule of law, and uphold their constitution. 

We are clear-eyed about the fundamental challenges that Iraq still faces: finding workable ways to share power and holding all sides to the agreements they make, stamping out the violent extremists who continue to launch outrageous attacks, resolving long-standing disputes about the country's internal boundaries, and ensuring that the necessary legal framework and financial arrangements are in place to allow the energy sector to further flourish.

But a little context is in order. For more than three decades, Iraq had known nothing but dictatorship, war, sanctions, and sectarian violence. In just three years, its progress toward a more normal political existence has been remarkable. Iraq still has a long way to go, but today it is less violent, more democratic, and more prosperous than at any time in recent history, and the United States remains deeply engaged there. To call Washington "absent" turns a blind eye to the facts. To call Iraq a "failed state" renders that term meaningless.

ANTONY J. BLINKEN is Deputy Assistant to the President of the United States and National Security Adviser to the Vice President.

A SOLID STATE
Norman Ricklefs

Ned Parker's article reflects the new conventional wisdom among media outlets, think tanks, and large swaths of the policymaking and military communities: that Iraq is on its way to becoming a failed state, if it isn't one already. Long gone is the vision of a U.S.-aligned, democratic Iraq serving as a beacon to the rest of the Middle East. The country, pessimists such as Parker argue, suffers from terrorism, organized crime, corruption, human rights abuses, an absence of law and order, and a lack of basic services that is shameful for such an oil-rich place.

These problems are real and must be addressed. But those who decry Iraq's current state would do well to remember that the country is just now emerging from years of war, dictatorship, and sanctions. It achieved true sovereignty only in December 2011, when the last U.S. forces withdrew. For all its flaws, Iraq is actually moving in the right direction. 

To begin with, the security situation has improved dramatically. Occasional coordinated terrorist attacks continue, mostly targeting Iraqi security forces and police. Only a few years ago, by contrast, the chief threat was not just irregular terrorism but also rocket and sniper attacks, kidnappings, drive-by shootings, and pitched battles in the streets. In 2006, the government did not control large parts of the capital, let alone the countryside, and elements of the security forces were unaccountable to those in power. All told, the violence that year left approximately 30,000 Iraqi civilians dead.

Since then, things have turned around. In 2007, an armed Sunni tribal movement known as the Anbar Awakening gained the upper hand over al Qaeda and, with support from U.S. and allied forces, inspired similar anti-al Qaeda groups within the Sunni community. At the same time, the U.S. troop "surge" bolstered the confidence of Iraqi government forces and anti-al Qaeda Sunnis. Meanwhile, Sunnis in Baghdad finally realized that they were losing the battle against the Shiite militias and that their past support for the insurgents had only weakened their position. These developments led to a dramatic reduction in violence and helped turn former Sunni fighters into U.S. allies.

To be sure, the most radical Sunni militias continue to attack the Iraqi government and its institutions. Terrorist attacks spiked last May, after the killing of Osama bin Laden in Pakistan, and last December, following the final withdrawal of U.S. troops. But these militias have not achieved their aim of bringing down the Iraqi government, nor have they reignited the civil war Iraq suffered in 2006 and 2007. Terrorism and criminal violence now claim on average fewer than 60 lives a week: a 90 percent reduction from 2006. What is more, most of these casualties are now caused by occasional high-profile al Qaeda attacks, not by the constant turf wars between sectarian groups that used to ravage streets and neighborhoods across the country. 

Meanwhile, the Iraqi government has reined in the Shiite militias that once controlled large portions of Baghdad and the southern provinces and had fueled vicious sectarian conflicts in the mixed Sunni-Shiite provinces, especially Diyala and Nineveh. A crucial turning point came in March 2008, when Prime Minister Nouri al-Maliki sent the Iraqi army into the streets of Basra to confront militias under the command of the Shiite cleric Muqtada al-Sadr. Then, in December 2011, Maliki convinced the League of the Righteous, a prominent Shiite militia that had kidnapped and attacked U.S. forces and contractors, to renounce violence and enter into talks with his State of Law bloc. 

THE BALLOT, NOT THE BULLET

Iraq's politics have also matured. Maliki's campaign in Basra demonstrated that a Shiite leader could take on Iranian-backed Shiite militias. Since then, the country's political system and civil society have mostly rewarded moderates and sidelined sectarians and radicals. In Iraq's 2010 parliamentary elections, Maliki's Dawa Party included prominent Sunni leaders on its list. Despite its history as a Shiite Islamist movement, Dawa positioned itself as centrist, and voters responded by giving the party 89 out of 325 seats in the legislature. At the same time, the secular, moderate, and mostly Sunni Iraqiya bloc, led by the former Shiite prime minister Ayad Allawi, won 91 seats. Only the Sadrists espoused a radical, anti-American message during the campaign. But they, too, moved away from organized violence and rebranded themselves as a political movement, which helped them capture 40 seats. In short, the election revealed Iraqi voters to be mature, moderate, and eager to move beyond years of bitter sectarian politics.

Since then, Iraq has suffered sporadic crises. After the election, politicians struggled to form a government for almost nine months, as Maliki and Allawi, neither of whom had won a majority, debated who had the right
to form a coalition. Following a deal brokered by the United States and Iraqi Kurdish leaders, a national unity government was finally seated in December 2010. Another particularly tense moment came in December 2011, when Maliki announced that an arrest warrant had been issued for the prominent Sunni leader Tariq al-Hashimi, who occupies the mostly ceremonial post of vice president. This led to a brief boycott by the Iraqiya coalition, whose members have since returned to parliament. 

Despite such hiccups, Iraq now has a functioning government, comprising representatives of all the major blocs, including Sunni ministers of finance, technology, education, and agriculture from the Iraqiya bloc. Iraqi democracy is far from perfect, but Baghdad was never going to turn into Copenhagen overnight. 

Parker and others correctly note that Maliki has concentrated power in his own hands; since 2006, he has increased his direct control over the security forces and deftly played rival political forces against one another. But the prime minister's power will continue to be balanced by an increasingly independent parliament. Under the leadership of Speaker Osama al-Nujaifi, of Iraqiya, Iraq's parliament, the Council of Representatives, has begun asserting itself for the first time. The council resisted attempts by Maliki to sack the Independent High Electoral Commission in 2011 and recently extended the term of the commission despite the prime minister's opposition. Furthermore, Maliki and Nujaifi have demonstrated their ability to work together to resolve issues: they reduced the number of ministries in the government in mid-2011 and brokered an agreement between their parties over the Iraqiya boycott in January. 

Iraq's economy has also made great strides, and the International Monetary Fund predicts that it will grow by more than 12 percent this year. Iraq holds foreign reserves of roughly $50 billion, its budget deficit stands at only 14 percent of GDP (down from approximately 19 percent in 2010), and inflation hovers around four percent. The value of the country's currency, the dinar, has remained mostly steady since the drop in violence in mid-2008. Meanwhile, oil revenues are set to increase as the government continues to cooperate with international companies on exporting, producing, and storing oil. Although U.S. investment in the country still lags, money has poured in from Europe, China, Iran, and Turkey. Foreign investment has risen from about $5 billion in 2006 to about $50 billion today and continues to grow roughly in line with GDP . 

None of this is to deny Iraq's many problems. As Parker observes, the absence of true rule of law poses the greatest threat to the country's success. Pervasive corruption and human rights abuses, particularly in secret detention centers where prisoners are presumed guilty and denied habeas corpus, undermine Baghdad's claim to democratic legitimacy. Iraq's inefficient, Byzantine bureaucracy consistently fails to address these issues, in the process stymying growth and deterring foreign investment. 

But these issues form a central part of the national discourse. Iraq's irrepressible media and its vocal political class consistently work to hold the country's leaders responsible for their deficiencies. And as security and the economy continue to improve, Iraq's civil society will be more empowered to shine light on the abuses and inefficiencies of the bureaucracy. Iraq is now an independent democracy that can provide for its own people. After decades of war and dictatorship, that is no small achievement. 

NORMAN RICKLEFS is a consultant specializing in Iraqi security-sector reform and government relations. He has served as a Political Adviser to the Commanding General of Australian forces in Iraq and as a Senior Adviser to Iraq's Interior Minister. 

PARKER REPLIES

As long as Iraq stays quiet, the Obama administration appears content with a deeply dysfunctional government in Baghdad that has tightened its grip on power and regularly violates human rights. Just as U.S. President George W. Bush once declared the war in Iraq a "mission accomplished," the Obama White House similarly boasts about its own Iraq policy, ignoring inconvenient realities in order to reap short-term political gains. 

Antony Blinken tailors facts to suit his arguments instead of seriously addressing the issues my article raised. He gives the Obama administration credit for the seating of Iraq's current government in December 2010 and points to Vice President Joseph Biden's role in the process. But what Blinken fails to mention is that after making a short visit to Baghdad in January 2011, Biden did not return for another ten months. During his absence, the U.S.-brokered power-sharing deal unraveled, relations deteriorated among the country's political parties, and Prime Minister Nouri al-Maliki's military office continued operating secret detention centers, notorious for their alleged use of torture.

Iraq also failed to satisfy key conditions agreed on by its major political factions for the new unity government, including the creation of a special post for Ayad Allawi, Maliki's chief competitor. All of Iraq's security posts remain under the prime minister's control, despite stipulations during the 2010 negotiations that the main parties would apportion control of the Defense and Interior Ministries. Iraq's main Shiite, Sunni, and Kurdish factions have shown themselves unable to share power or foster mutual trust, undermining the only hope for democracy in the country. Rather than try to build a harmonious government, Maliki has driven his Sunni vice president from office on controversial terrorism charges, intimated that he might do the same to his Sunni finance minister, and attempted to fire his Sunni deputy prime minister for calling him a dictator. 

Norman Ricklefs is correct to note that the Iraqi people demonstrated a preference for secular, nationalist parties in the 2010 election. But he and Blinken ignore the ugly sectarian turn that the country's politics has taken since. Maliki's state-controlled television channel popularizes stories of Shiites killed by Sunni armed groups, and the prime minister often makes speeches that pander to the Shiite community's fears. Sunni parties indulge in the same demagoguery. Ricklefs sees the decision of the League of the Righteous, a Shiite militia, to disavow violence and enter into talks with Maliki's political bloc as a positive development. But some caution is in order: Iraqi interpreters who once worked for the U.S. military report that the reformed militia continues to threaten their lives. 

Celebrating Iraq's improved security is equally premature. Blinken writes that violence "has declined and remains at historic lows." But with as many as 300 people still dying each month from bombings, rocket attacks, and shootings, such declarations offer ordinary Iraqis little in the way of comfort. 

Most troubling to observe is how the Maliki government has abandoned any concern for civil liberties since the 2010 election. In the intervening months, security forces have raided the offices of nongovernmental organizations, including the human rights group Where Are My Rights. Authorities beat, jailed, and even killed some civilian protesters during demonstrations last year inspired by the Arab Spring. For all the talk of Iraq's vigorous press, 65 journalists were arrested and another three were murdered in 2011. 

Gone is any semblance of accountability or transparency. Several Iraqi human rights officials who uncovered abuses in the so-called black jails run by Maliki's military office have been threatened with arrest and chased from the country. Similarly, anticorruption officials have been harassed and forced from office for investigating allegations of graft on the part of both Maliki's associates and their opponents. Absent a real commitment to combating corruption, Iraq will fall victim to the resource curse that has plagued other oil-producing countries. The gains from increased energy production fill the coffers of officials in the Green Zone, but they do not benefit the majority of the Iraqi public. Despite hundreds of billions of dollars in oil revenues, 23 percent of the country lives in poverty.

Both Blinken and Ricklefs argue that Iraq, for all its flaws, has come a long way from the depths of its recent sectarian civil war. But such comparisons miss the point. Today's violence is orchestrated by the state as much as by any armed group. Fewer Iraqis cower in fear of al Qaeda, but security forces now torture detainees to extract confessions. Shiite militias are less capable of intimidation, but judges and civil servants know they must serve a political agenda or face retribution -- even death. On the surface, Iraq may be calmer than it was five years ago, but it has not become a healthy state. 

The West should harbor no illusions. Without impartial, transparent institutions, Iraq will fall victim to authoritarianism or civil war, if not both. The country can still be saved, but to pretend that it is marching toward democracy risks dooming it to the opposite.



Joint Statement of the U.S.-Iraq Political and Diplomatic Joint Coordination Committee

Office of the Spokesperson
Washington, DC
September 2, 2012

The Governments of the Republic of Iraq and the United States of America reaffirmed their strategic partnership during a meeting of the Political and Diplomatic Joint Coordination Committee (JCC) on September 2, in Baghdad.

This meeting, held at the Iraqi Ministry of Foreign Affairs, was co-chaired by Iraqi Foreign Minister Hoshyar Zebari and U.S. Assistant Secretary of State for Near Eastern Affairs Ambassador Elizabeth Jones. The JCCs were established by the 2008 Strategic Framework Agreement between Iraq and the United States to strengthen our bilateral strategic partnership on a variety of initiatives, including Defense and Security, Energy, Law Enforcement and Judicial Cooperation, Education and Culture, Science and Environment, Trade and Finance, and Transportation Cooperation.

During the meeting, the delegations discussed international efforts to address the ongoing crisis in Syria and explored areas of potential cooperation, particularly on humanitarian issues and technical advice on border security. Both sides remain fully committed to a Syrian-led political transition leading to a pluralistic political system representing the will of the Syrian people. The United States acknowledged Iraqi efforts to provide shelter and services to Syrians who have sought refuge in Iraq.

The United States praised Iraqi efforts to resolve Chapter VII issues regarding its relationship with Kuwait, in accordance with UNSC Resolution 833. The United States is committed to working with both Iraq and Kuwait to resolve remaining Chapter VII issues.

The two sides discussed Iraq’s plans for its next provincial and national elections scheduled for 2013 and 2014. The United States pledged to assist Iraqi implementation of this next essential step in the development of Iraq’s democracy.

The United States and Iraq discussed the ongoing process of repatriating archives and documents which are part of the patrimony of the Iraqi people.

The United States praised Iraq’s recent decision to sign the Additional Protocol to the Comprehensive Safeguards Agreement with the International Atomic Energy Agency (IAEA).

Finally, the United States and Iraq agreed to explore options for expanded consultation between Department of State and Ministry of Foreign Affairs personnel, potentially to include joint training, professional exchanges, and more frequent policy planning discussions.

The United States and the Republic of Iraq committed to convene the Political and Diplomatic JCC quarterly over the coming year.

http://www.state.gov/r/pa/prs/ps/2012/09/197276.htm




Special Inspector General For Iraq Reconstruction’s “Hard Lessons” Chapter 13 “Restarting Oil Production”

16/08/2012 20:04

 By Joel Wing*

Iraq has the third largest oil reserves in the world. That led many in the Bush administration to believe that the country could pay for its own rebuilding after the 2003 invasion. Deputy Secretary of Defense Paul Wolfowitz for instance, told a House subcommittee that Iraq would largely finance its own reconstruction shortly after the start of the U.S. invasion with its oil revenues. Vice President Dick Cheney stated that Iraq could reach or surpass its pre-war production levels by the end of 2003 with only minimal investment. Both views proved wildly optimistic. They were unaware of the fact that Iraq’s petroleum industry was old, in desperate need of repair, and some of it was in decline after years of sanctions. That meant when the Coalition Provisional Authority (CPA) was created to run Iraq, one of its first priorities was to fix the energy sector, and get it up and running again, rather than relying upon it to fund the reconstruction of the country.

Before 2003, Iraq’s oil industry faced a number of major setbacks, which it was just recovering from. In 1980, it was producing an average of 2.514 million barrels a day. The next year, Saddam Hussein decided to attack Iran, and output dropped to 1 million barrels a day. It wasn’t until the last two years of the war that it was able to bounce back, hitting 2.079 million barrels a day in 1987 and 2.685 million by 1988. By 1990, production was slightly down to 2.040 million barrels a day, and again Saddam went to war, this time invading Kuwait. International sanctions were slapped on the nation, and Iraq went down to only 305,000 barrels a day in 1991. It stayed below one million barrels until the Oil for Food Program was started in December 1996. That led to output reaching 1.155 million barrels in 1997, and then peaked at 2.570 million barrels in 2000. Right before the U.S. invasion, Iraq was right around that level with 2.548 million in January 2003, and 2.483 million in February. The country’s refineries were declining during this period as well. By 2003 they were obsolete, and only able to process 55% of every barrel of oil they received. That meant it was not producing enough fuel and cooking gas to meet demand, and had to trade with Jordan and Turkey to make up the difference. Overall, despite Iraq’s export numbers, it was facing major problems. Sanctions cut off supplies of spare parts so the infrastructure began to decline, there was widespread corruption, and smuggling going on. The last two were due to Saddam placing the oil industry at the behest of his regime. The government manipulated the Oil for Food Program, so that it could undermine the sanctions, and earn money for Saddam and his inner circle. The authorities also worked with gangs to illegally export oil. All together, that meant that the petroleum business fell into a state of disrepair after 1991 since Baghdad did not care about its development or upkeep just what it could do for Saddam.

Before the war, the Bush administration seemed ignorant of the state of Iraq’s oil industry, and focused upon what Saddam might due to his fields if the U.S. invaded. War planners were afraid that Iraq would repeat what it did during the Gulf War, and set its oil fields afire. Preparing for such an event was the only concrete planning the Americans did before the invasion, tasking Kellogg, Brown & Root (KBR) with dealing with any potential damage the regime might cause to the petroleum infrastructure. That catastrophe didn’t happen, as there were only nine fires. The real problems started afterward as the fields and facilities were stripped during the looting. The Oil Ministry was also ransacked before American soldiers arrived to guard it. Since Washington’s planning for post-war Iraq was so poor it was no surprise that U.S. forces were not ready for what happened. It wasn’t just that the U.S. did not prepare for the looting that took place after the fall of Saddam, it was that it did nothing while it went on. The military had no orders to deal with it, so let it go on for days with devastating affects, which the Americans would later have to pay for.

Instead of Iraq’s oil paying for the country’s rebuilding, the industry ended up requiring billions to be rebuilt. Before the start of hostilities, the Council on Foreign Relations estimated that $5-$7 billion would be needed to refurbish the energy sector, and another $20 billion to increase production. After the invasion, the Army Corps of Engineers found $1.7 billion in damages done from the war and looting. Those early studies quickly put an end to the hopes that Iraq would pay for its own reconstruction. Instead, the oil industry would become a major project itself.

The first step to getting the oil sector back on track was to put the Oil Ministry back together, and appoint U.S. advisers to it. In May 2003, Thamir Abbas al-Ghadban, who had been the director of planning in Saddam’s era, became the interim Oil Minister. At the same time, Philip Carroll, the former CEO of Shell was appointed to head an advisory board to the Oil Ministry. Together they decided to keep the petroleum business under state control, and made the top priority to get production going again after it had ended with the invasion. In June, 8 million barrels of Iraqi oil, which had been placed in storage in Turkey was sold, and a contract was signed for new exports. In July, the Army Corps of Engineers, the Oil Ministry, the Coalition Provisional Authority (CPA), and KBR came up with a plan to restore capacity to pre-war levels. The Ministry did most of the actual construction using state-run enterprises, while KBR did the buying and importing of parts, supplies, and equipment. The problems they ran into were that there was still looting going on, there was not a steady supply of electricity, and the infrastructure became an early target of the insurgents.

Iraq’s exports and production did make a recovery, despite some who questioned its ability to do so.  In October 2003 for instance, analysts predicted that the country was nowhere near returning to its pre-war levels. Interim Minister Ghadban however, told a conference in Geneva of oil executives that the oil industry would be repaired and back up to capacity by the spring of 2004. He turned out to be right. From April to July Iraq was only producing a few hundred thousand barrels a day. By August however, it reached 1.050 million barrels, going up to 1.948 million by December, and surpassing 2 million barrels for seven months in 2004. This came despite constant attacks by militants, which shut down pipelines, cut exports, and cost millions in repairs and security. It was due to the diligence of Iraq’s oil workers that the state-run companies were able to get things running again despite the violence.

One part of the industry that did not make a come back after the invasion was the country’s refineries. The Oil Ministry wanted to get them back and running as well. By April 2003, the Dora refinery was processing 40,000 barrels a day, but it had a capacity of 110,000. By the fall, Iraq’s three refineries were mostly shut down because of power shortages and attacks. The result was a fuel crisis. The CPA was forced to import supplies just as the former regime had, and became a major job of KBR. The U.S. went from $24 million in fuel imports to $871 million in just a few months. The refineries were never upgraded, and continued to operate at a fraction of their capacity. This is still an issue that the country faces to this day, as it still has to buy large quantities of refined products from other countries.

As the insurgency took off in the second half of 2003, so did the targeting of the oil infrastructure. In June, there were seven bombings upon three pipelines. From that month to November, lines and facilities were attacked 13 times, which led to cuts in output. That forced the CPA to sign a $50 million contract with a subsidiary of a British security firm to protect the industry. The company ended up getting paid $104 million in two years for its work. The Coalition went on to create the Task Force Shield to oversee the training and control of the new Oil Protection Force, which proved to be badly managed. The new security unit proved too lightly armed to deal with insurgents, and was quickly taken over by militias, and infiltrated by militants, which undermined its purpose. It would take years and millions in investment to adequately protect the infrastructure, but it still comes under sporadic attack to the present day.

Rather than attempting to take over Iraq’s oil industry, the U.S. was mostly concerned with putting it back together and getting it back to its pre-war output levels after the 2003 invasion. The Americans were ill prepared for the state of Iraq’s petroleum infrastructure, and the attention it garnered from the insurgency. Amazingly, they and the Iraqis were able to get production going again although it faced many ups and downs. Today, oil fuels the Iraqi economy. It took years of work and a large infusion of funds for that to happen. Oil did not prove the immediate reward that the Bush administration initially believed. That was just one more example of how the White House’s best-case scenario for postwar Iraq failed when it met reality. Instead of Iraq paying for itself, it turned out to be the largest and most expensive reconstruction efforts in American history.

*With an MA in International Relations, Joel Wing has been researching and writing about Iraq since 2002. His acclaimed blog, Musings on Iraq, is currently listed by the New York Times and the World Politics Review. In addition, Mr. Wing’s work has been cited by the Center for Strategic and International Studies, the Guardian and the Washington Independent.

RY/AKnews


United States and Iraq sign agreement for administrative reform in Iraq

Wednesday, July 25, 2012 23:58

Announced today that the United States and Iraq signed a memorandum of understanding outlines of U.S. support for Iraqi efforts to reduce administrative obstacles in the Iraqi private sector.

The Web site of the U.S. Embassy that the memo had been signed on 18 July present between the U.S. Embassy in Baghdad, through the U.S. Agency for International Development (USAID) and the Office of the Prime Minister of Iraq, in line with the strategic framework agreement.

He has signed a Memorandum of Understanding Director United States Agency for International Development in Iraq Alex decay, and the Director of Office of the Prime Minister Dr. Ahmad Hamid.

The embassy said that the signing of this memorandum allows the agency to begin officially participating in the project management and administrative reform in Iraq [insistence] who will review and eliminate unnecessary procedures that hinder business and private investment. The groups will work on the project the problem of Iraqi government officials and representatives from the private sector to issue recommendations to simplify the procedures for opening new projects and to obtain building permits and to facilitate trade with neighboring countries and the world.

The embassy noted that these recommendations will help to introduce a significant improvement on the Iraqi private sector in the classification of the country in the World Bank report on the establishment of projects, which will support efforts to expand the scope of investment in the economic sector in Iraq.

The implementation of these reforms will send a clear message to international business that Iraq is laying the foundations of a new economic rapidly.

The project [insistence] one of the group of projects supported by the U.S. Embassy in Baghdad as part of the strategic framework agreement to support the Iraqi government’s efforts towards improving the private sector.

http://bit.ly/MZe43W


Follow The Money Trail

It has been called the largest airborne transfer of currency in the history of the world. But finding out what happened to all the money involved has become one of the biggest financial mysteries of all time.

Beginning in the very earliest days of the war in Iraq, the New York Federal Reserve shipped billions of dollars in physical cash to Baghdad to pay for the reopening of the government and restoration of basic services.

By one account, the New York Fed shipped about $40 billion in cash between 2003 and 2008. In just the first two years, the shipments included more than 281 million individual bills weighing a total of 363 tons. Soon after the money arrived in the chaos of war-torn Baghdad, however, the paper trail documenting who controlled the cash began to go cold.

The following are photos obtained by CNBC that document some of these shipments and show how the money was handled. Click ahead for the photos. Read the full story here.

By Eamon Javers
Posted 26 October 2011

Source: CNBC Sources

By: Eamon Javers, CNBC Washington, DC Correspondent | 26 Oct 2011 | 04:20 PM ET
Text Size

The $40 Billion Iraqi Money Trail

1 of 15

U.S. tracks 'millions' of dollars stolen by Iraqi officials

By Eamon Javers, CNBC.com

Out of the billions of dollars in cash that the U.S. shipped to Iraq during the war, "hundreds of millions if not billions of dollars . . . was stolen by senior Iraqi officials for their own personal gain," the Special Inspector General for Iraq Reconstruction tells CNBC.

In a new audit report, the inspector tracked a subset of the total amount — $6.6 billion in funds that the New York Federal Reserve made available to the Iraqi government during the war.

By one account, the New York Fed shipped about $40 billion in cash between 2003 and 2008. In just the first two years, the shipments included more than 281 million individual bills weighing a total of 363 tons. Soon after the money arrived in the chaos of war-torn Baghdad, however, the paper trail documenting who controlled the cash began to go cold.

The following are photos obtained by CNBC that document some of these shipments and show how the money was handled. Click ahead for the photos. Read the full story here.

By Eamon Javers
Posted 26 October 2011

That chunk of cash, a subset of the tens of billions the New York Fed has sent overall, became controversial over the summer because neither the New York Fed nor the Iraqi government would provide enough information to document what happened to it.

But the Inspector General, Stuart W. Bowen Jr., said in an interview that he was ultimately given the records and tracked the money. Bowen said he is satisfied that the bulk of money made it to the entities it was intended for.

But he still has questions about what happened to some of the money that was left over when the Coalition Provisional Authority was disbanded. "Two hundred and seventeen million was in the basement of the Republican palace in cash," Bowen said. "That last tranche is what we continue to be concerned about."

Meanwhile, the investigation into the vast bulk of the funds continues. Bowen said that he will continue to investigate the status of as much as $12 billion in Iraqi assets that was shipped to Baghdad between 2003 and 2004.

Bowen is now trying to determine what happened to $217 million in cash that was stored in the basement of the Republican Palace after it was seized and used by the Department of Defense. And he's also investigating a $2.8 billion fund that the Iraqi government asked the U.S. to spend on its behalf on reconstruction activity.

"We are carrying out an audit now that is looking at those two tranches of money to determine what happened," said Bowen. He said he expects to have answers and wrap up his investigation by 2012.

Overall, Bowen said, he has found indications that huge amounts of money were stolen in Iraq. Asked how much, he said it is "impossible to say, but I know just from talking to Iraqis and just my travels to Iraq — I've been there 30 times. What I've learned is that hundreds of millions if not billions of dollars of development fund for Iraq money was stolen by senior Iraqi officials for their own personal gain."

The Inspector General's mandate does not include looking at the tens of billions that were sent from the New York Fed to the Baghdad government after the Coalition Provisional Authority went out of existence in 2004.

And he has limited ability to track whether the money was spent properly once it was transferred into Iraqi control. "Its not my job to track that," Bowen said. "That applies to virtually all of the funds that went into the Central Bank of Iraq. That became the duty of the Iraqi Ministers themselves, which of course at the time were rife with corruption."

In the latest audit, Bowen found at least three cases in which money was mishandled as it was unloaded from U.S. military aircraft at Baghdad International Airport.

Those include, the report found:

On one occasion in which only "$1.35 billion out of $1.5 billion shipped to Baghdad in December 2003 was deposited into the DFI Baghdad account." That was because, the audit found, "The records note that $150 million was improperly given directly to the Iraqi Minister of Finance at the airport."

In a second instance, the inspector general "could not find any specific documentation on the arrival and deposit of a $400 million shipment into the CBI's DFI Baghdad account. While we do not have conclusive evidence there is some indication that these funds were deposited into another CBI account under control of the Minister of Finance."

And in a third case, "CPA accounting records show that the very last currency shipment totaled $2.4 billion but that only $766.4 million was deposited into the Baghdad account. The remaining $1.6 billion was earmarked for Kurdistan, and documents show it was transferred to a Central Bank of Kurdistan representative for flight to Erbil."

Bowen said he hopes the United States has learned some basic financial lessons from its experience in Iraq. "Pouring cash — hundreds of millions in dollars of cash — across a war zone is a foolish thing to do," he said. "And it will bring out the lesser parts of certain people and lead them to criminal conduct. I've had to go and pursue them, investigate their wrongdoing and ensure their prosecution."

Copyright 2011 CNBC.com.


U.S.-Iraq Status of Forces Agreement, 11/2008

 

Agreement Between the United States of America and the Republic of Iraq On the Withdrawal of United States Forces from Iraq and the Organization of Their Activities during Their Temporary Presence in Iraq

Preamble

The United States of America and the Republic of Iraq, referred to hereafter as “the Parties´´:

Recognizing the importance of: strengthening their joint security, contributing to world peace and stability, combating terrorism in Iraq, and cooperating in the security and defense spheres, thereby deterring aggression and threats against the sovereignty, security, and territorial integrity of Iraq and against its democratic, federal, and constitutional system;

Affirming that such cooperation is based on full respect for the sovereignty of each of them in accordance with the purposes and principles of the United Nations Charter;

Out of a desire to reach a common understanding that strengthens cooperation between them;

Without prejudice to Iraqi sovereignty over its territory, waters, and airspace; and

Pursuant to joint undertakings as two sovereign, independent, and coequal countries;

Have agreed to the following:

Article 1—Scope and Purpose

This Agreement shall determine the principal provisions and requirements that regulate the temporary presence, activities, and withdrawal of the United States Forces from Iraq.

Article 2—Definition of Terms

  1. `Agreed facilities and areas´´ are those Iraqi facilities and areas owned by the Government of Iraq that are in use by the United States Forces during the period in which this Agreement is in force.
  2. “United States Forces´´ means the entity comprising the members of the United States Armed Forces, their associated civilian component, and all property, equipment, and materiel of the United States Armed Forces present in the territory of Iraq.
  3. “Member of the United States Forces´´ means any individual who is a member of the United States Army, Navy, Air Force, Marine Corps, or Coast Guard.
  4. “Member of the civilian component´´ means any civilian employed by the United States Department of Defense. This term does not include individuals normally resident in Iraq.
  5. “United States contractors´´ and “United States contractor employees´´ mean non-Iraqi persons or legal entities, and their employees, who are citizens of the United States or a third country and who are in Iraq to supply goods, services, and security in Iraq to or on behalf of the United States Forces under a contract or subcontract with or for the United States Forces. However, the terms do not include persons or legal entities normally resident in the territory of Iraq.
  6. “Official vehicles´´ means commercial vehicles that may be modified for security purposes and are basically designed for movement on various roads and designated for transportation of personnel.
  7. “Military vehicles´´ means all types of vehicles used by the United States Forces, which were originally designated for use in combat operations and display special distinguishing numbers and symbols according to applicable United States Forces instructions and regulations.
  8. “Defense equipment´´ means systems, weapons, supplies, equipment, munitions, and materials exclusively used in conventional warfare that are required by the United States Forces in connection with agreed activities under this Agreement and are not related, either directly or indirectly, to systems of weapons of mass destruction (chemical weapons, nuclear weapons, radiological weapons, biological weapons, and related waste of such weapons).
  9. “Storage´´ means the keeping of defense equipment required by the United States Forces in connection with agreed activities under this Agreement.
  10. “Taxes and duties´´ means all taxes, duties (including customs duties), fees, of whatever kind, imposed by the Government of Iraq, or its agencies, or governorates under Iraqi laws and regulations. However, the term does not include charges by the Government of Iraq, its agencies, or governorates for services requested and received by the United States Forces.

Article 3—Laws

While conducting military operations pursuant to this Agreement, it is the duty of members of the United States Forces and of the civilian component to respect Iraqi laws, customs, traditions, and conventions and to refrain from any activities that are inconsistent with the letter and spirit of this Agreement. It is the duty of the United States to take all necessary measures for this purpose.

With the exception of members of the United States Forces and of the civilian component, the United States Forces may not transfer any person into or out of Iraq on vehicles, vessels, or aircraft covered by this Agreement, unless in accordance with applicable Iraqi laws and regulations, including implementing arrangements as may be agreed to by the Government of Iraq.

Article 4—Missions

  1. The Government of Iraq requests the temporary assistance of the United States Forces for the purposes of supporting Iraq in its efforts to maintain security and stability in Iraq, including cooperation in the conduct of operations against al-Qaeda and other terrorist groups, outlaw groups, and remnants of the former regime.
  2. All such military operations that are carried out pursuant to this Agreement shall be conducted with the agreement of the Government of Iraq. Such operations shall be fully coordinated with Iraqi authorities. The coordination of all such military operations shall be overseen by a Joint Military Operations Coordination Committee (JMOCC) to be established pursuant to this Agreement. Issues regarding proposed military operations that cannot be resolved by the JMOCC shall be forwarded to the Joint Ministerial Committee.
  3. All such operations shall be conducted with full respect for the Iraqi Constitution and the laws of Iraq. Execution of such operations shall not infringe upon the sovereignty of Iraq and its national interests, as defined by the Government of Iraq. It is the duty of the United States Forces to respect the laws, customs, and traditions of Iraq and applicable international law.
  4. The Parties shall continue their efforts to cooperate to strengthen Iraq’s security capabilities including, as may be mutually agreed, on training, equipping, supporting, supplying, and establishing and upgrading logistical systems, including transportation, housing, and supplies for Iraqi Security Forces.
  5. The Parties retain the right to legitimate self defense within Iraq, as defined in applicable international law.

Article 5—Property Ownership

  1. Iraq owns all buildings, non-relocatable structures, and assemblies connected to the soil that exist on agreed facilities and areas, including those that are used, constructed, altered, or improved by the United States Forces.
  2. Upon their withdrawal, the United States Forces shall return to the Government of Iraq all the facilities and areas provided for the use of the combat forces of the United States, based on two lists. The first list of agreed facilities and areas shall take effect upon the entry into force of the Agreement. The second list shall take effect no later than June 30, 2009, the date for the withdrawal of combat forces from the cities, villages, and localities. The Government of Iraq may agree to allow the United States Forces the use of some necessary facilities for the purposes of this Agreement on withdrawal.
  3. The United States shall bear all costs for construction, alterations, or improvements in the agreed facilities and areas provided for its exclusive use. The United States Forces shall consult with the Government of Iraq regarding such construction, alterations, and improvements, and must seek approval of the Government of Iraq for major construction and alteration projects. In the event that the use of agreed facilities and areas is shared, the two Parties shall bear the costs of construction, alterations, or improvements proportionately.
  4. The United States shall be responsible for paying the costs for services requested and received in the agreed facilities and areas exclusively used by it, and both Parties shall be proportionally responsible for paying the costs for services requested and received in joint agreed facilities and areas.
  5. Upon the discovery of any historical or cultural site or finding any strategic resource in agreed facilities and areas, all works of construction, upgrading, or modification shall cease immediately and the Iraqi representatives at the Joint Committee shall be notified to determine appropriate steps in that regard.
  6. The United States shall return agreed facilities and areas and any non-relocatable structures and assemblies on them that it had built, installed, or established during the term of this Agreement, according to mechanisms and priorities set forth by the Joint Committee. Such facilities and areas shall be handed over to the Government of Iraq free of any debts and financial burdens.
  7. The United States Forces shall return to the Government of Iraq the agreed facilities and areas that have heritage, moral, and political significance and any non-relocatable structures and assemblies on them that it had built, installed, or established, according to mechanisms, priorities, and a time period as mutually agreed by the Joint Committee, free of any debts or financial burdens.
  8. The United States Forces shall return the agreed facilities and areas to the Government of Iraq upon the expiration or termination of this Agreement, or earlier as mutually agreed by the Parties, or when such facilities are no longer required as determined by the JMOCC, free of any debts or financial burdens.
  9. The United States Forces and United States contractors shall retain title to all equipment, materials, supplies, relocatable structures, and other movable property that was legitimately imported into or legitimately acquired within the territory of Iraq in connection with this Agreement.

Article 6—Use of Agreed Facilities and Areas

  1. With full respect for the sovereignty of Iraq, and as part of exchanging views between the Parties pursuant to this Agreement, Iraq grants access and use of agreed facilities and areas to the United States Forces, United States contractors, United States contractor employees, and other individuals or entities as agreed upon by the Parties.
  2. In accordance with this Agreement, Iraq authorizes the United States Forces to exercise within the agreed facilities and areas all rights and powers that may be necessary to establish, use, maintain, and secure such agreed facilities and areas. The Parties shall coordinate and cooperate regarding exercising these rights and powers in the agreed facilities and areas of joint use.
  3. The United States Forces shall assume control of entry to agreed facilities and areas that have been provided for its exclusive use. The Parties shall coordinate the control of entry into agreed facilities and areas for joint use and in accordance with mechanisms set forth by the JMOCC. The Parties shall coordinate guard duties in areas adjacent to agreed facilities and areas through the JMOCC.

Article 7—Positioning and Storage of Defense Equipment

The United States Forces may place within agreed facilities and areas and in other temporary locations agreed upon by the Parties defense equipment, supplies, and materials that are required by the United States Forces in connection with agreed activities under this Agreement. The use and storage of such equipment shall be proportionate to the temporary missions of the United States Forces in Iraq pursuant to Article 4 of this Agreement and shall not be related, either directly or indirectly, to systems of weapons of mass destruction (chemical weapons, nuclear weapons, radiological weapons, biological weapons, and related waste of such weapons). The United States Forces shall control the use and relocation of defense equipment that they own and are stored in Iraq. The United States Forces shall ensure that no storage depots for explosives or munitions are near residential areas, and they shall remove such materials stored therein. The United States shall provide the Government of Iraq with essential information on the numbers and types of such stocks

Article 8—Protecting the Environment

Both Parties shall implement this Agreement in a manner consistent with protecting the natural environment and human health and safety. The United States reaffirms its commitment to respecting applicable Iraqi environmental laws, regulations, and standards in the course of executing its policies for the purposes of implementing this Agreement.

Article 9—Movement of Vehicles, Vessels, and Aircraft

  1. With full respect for the relevant rules of land and maritime safety and movement, vessels and vehicles operated by or at the time exclusively for the United States Forces may enter, exit, and move within the territory of Iraq for the purposes of implementing this Agreement. The JMOCC shall develop appropriate procedures and rules to facilitate and regulate the movement of vehicles.
  2. With full respect for relevant rules of safety in aviation and air navigation, United States Government aircraft and civil aircraft that are at the time operating exclusively under a contract with the United States Department of Defense are authorized to over-fly, conduct airborne refueling exclusively for the purposes of implementing this Agreement over, and land and take off within, the territory of Iraq for the purposes of implementing this Agreement. The Iraqi authorities shall grant the aforementioned aircraft permission every year to land in and take off from Iraqi territory exclusively for the purposes of implementing this Agreement. United States Government aircraft and civil aircraft that are at the time operating exclusively under a contract with the United States Department of Defense, vessels, and vehicles shall not have any party boarding them without the consent of the authorities of the United States Forces. The Joint Sub-Committee concerned with this matter shall take appropriate action to facilitate the regulation of such traffic.
  3. Surveillance and control over Iraqi airspace shall transfer to Iraqi authority immediately upon entry into force of this Agreement.
  4. Iraq may request from the United States Forces temporary support for the Iraqi authorities in the mission of surveillance and control of Iraqi air space.
  5. United States Government aircraft and civil aircraft that are at the time operating exclusively under contract to the United States Department of Defense shall not be subject to payment of any taxes, duties, fees, or similar charges, including overflight or navigation fees, landing, and parking fees at government airfields. Vehicles and vessels owned or operated by or at the time exclusively for the United States Forces shall not be subject to payment of any taxes, duties, fees, or similar charges, including for vessels at government ports. Such vehicles, vessels, and aircraft shall be free from registration requirements within Iraq.
  6. The United States Forces shall pay fees for services requested and received.
  7. Each Party shall provide the other with maps and other available information on the location of mine fields and other obstacles that can hamper or jeopardize movement within the territory and waters of Iraq.

Article 10—Contracting Procedures

The United States Forces may select contractors and enter into contracts in accordance with United States law for the purchase of materials and services in Iraq, including services of construction and building. The United States Forces shall contract with Iraqi suppliers of materials and services to the extent feasible when their bids are competitive and constitute best value. The United States Forces shall respect Iraqi law when contracting with Iraqi suppliers and contractors and shall provide Iraqi authorities with the names of Iraqi suppliers and contractors, and the amounts of relevant contracts.

Article 11—Services and Communications

  1. The United States Forces may produce and provide water, electricity, and other services to agreed facilities and areas in coordination with the Iraqi authorities through the Joint Sub-Committee concerned with this matter.
  2. The Government of Iraq owns all frequencies. Pertinent Iraqi authorities shall allocate to the United States Forces such frequencies as coordinated by both Parties through the JMOCC. The United States Forces shall return frequencies allocated to them at the end of their use not later than the termination of this Agreement.
  3. The United States Forces shall operate their own telecommunications systems in a manner that fully respects the Constitution and laws of Iraq and in accordance with the definition of the term “telecommunications” contained in the Constitution of the International Union of Telecommunications of 1992, including the right to use necessary means and services of their own systems to ensure the full capability to operate systems of telecommunications.
  4. For the purposes of this Agreement, the United States Forces are exempt from the payment of fees to use transmission airwaves and existing and future frequencies, including any administrative fees or any other related charges.
  5. The United States Forces must obtain the consent of the Government of Iraq regarding any projects of infrastructure for communications that are made outside agreed facilities and areas exclusively for the purposes of this Agreement in accordance with Article 4, except in the case of actual combat operations conducted pursuant to Article 4.
  6. The United States Forces shall use telecommunications systems exclusively for the purposes of this Agreement.

Article 12—Jurisdiction

  1. Recognizing Iraq’s sovereign right to determine and enforce the rules of criminal and civil law in its territory, in light of Iraq’s request for temporary assistance from the United States Forces set forth in Article 4, and consistent with the duty of the members of the United States Forces and the civilian component to respect Iraqi laws, customs, traditions, and conventions, the Parties have agreed as follows:
  2. Iraq shall have the primary right to exercise jurisdiction over members of the United States Forces and of the civilian component for the grave premeditated felonies enumerated pursuant to paragraph 8, when such crimes are committed outside agreed facilities and areas and outside duty status.
  3. Iraq shall have the primary right to exercise jurisdiction over United States contractors and United States contractor employees.
  4. The United States shall have the primary right to exercise jurisdiction over members of the United States Forces and of the civilian component for matters arising inside agreed facilities and areas; during duty status outside agreed facilities and areas; and in circumstances not covered by paragraph 1.
  5. At the request of either Party, the Parties shall assist each other in the investigation of incidents and the collection and exchange of evidence to ensure the due course of justice.
  6. Members of the United States Forces and of the civilian component arrested or detained by Iraqi authorities shall be notified immediately to United States Forces authorities and handed over to them within 24 hours from the time of detention or arrest. Where Iraq exercises jurisdiction pursuant to paragraph 1 of this Article, custody of an accused member of the United States Forces or of the civilian component shall reside with United States Forces authorities. United States Forces authorities shall make such accused persons available to the Iraqi authorities for purposes of investigation and trial.
  7. The authorities of either Party may request the authorities of the other Party to waive its primary right to jurisdiction in a particular case. The Government of Iraq agrees to exercise jurisdiction under paragraph 1 above, only after it has determined and notifies the United States in writing within 21 days of the discovery of an alleged offense, that it is of particular importance that such jurisdiction be exercised.
  8. Where the United States exercises jurisdiction pursuant to paragraph 3 of this Article, members of the United States Forces and of the civilian component shall be entitled to due process standards and protections pursuant to the Constitution and laws of the United States. Where the offense arising under paragraph 3 of this Article may involve a victim who is not a member of the United States Forces or of the civilian component, the Parties shall establish procedures through the Joint Committee to keep such persons informed as appropriate of: the status of the investigation of the crime; the bringing of charges against a suspected offender; the scheduling of court proceedings and the results of plea negotiations; opportunity to be heard at public sentencing proceedings, and to confer with the attorney for the prosecution in the case; and, assistance with filing a claim under Article 21 of this Agreement. As mutually agreed by the Parties, United States Forces authorities shall seek to hold the trials of such cases inside Iraq. If the trial of such cases is to be conducted in the United States, efforts will be undertaken to facilitate the personal attendance of the victim at the trial.
  9. Where Iraq exercises jurisdiction pursuant to paragraph 1 of this Article, members of the United States Forces and of the civilian component shall be entitled to due process standards and protections consistent with those available under United States and Iraqi law. The Joint Committee shall establish procedures and mechanisms for implementing this Article, including an enumeration of the grave premeditated felonies that are subject to paragraph 1 and procedures that meet such due process standards and protections. Any exercise of jurisdiction pursuant to paragraph 1 of this Article may proceed only in accordance with these procedures and mechanisms.
  10. Pursuant to paragraphs 1 and 3 of this Article, United States Forces authorities shall certify whether an alleged offense arose during duty status. In those cases where Iraqi authorities believe the circumstances require a review of this determination, the Parties shall consult immediately through the Joint Committee, and United States Forces authorities shall take full account of the facts and circumstances and any information Iraqi authorities may present bearing on the determination by United States Forces authorities.
  11. The Parties shall review the provisions of this Article every 6 months including by considering any proposed amendments to this Article taking into account the security situation in Iraq, the extent to which the United States Forces in Iraq are engaged in military operations, the growth and development of the Iraqi judicial system, and changes in United States and Iraqi law.

Article 13—Carrying Weapons and Apparel

Members of the United States Forces and of the civilian component may possess and carry weapons that are owned by the United States while in Iraq according to the authority granted to them under orders and according to their requirements and duties. Members of the United States Forces may also wear uniforms during duty in Iraq.

Article 14—Entry and Exit

  1. For purposes of this Agreement, members of the United States Forces and of the civilian component may enter and leave Iraq through official places of embarkation and debarkation requiring only identification cards and travel orders issued for them by the United States. The Joint Committee shall assume the task of setting up a mechanism and a process of verification to be carried out by pertinent Iraqi authorities.
  2. Iraqi authorities shall have the right to inspect and verify the lists of names of members of the United States Forces and of the civilian component entering and leaving Iraq directly through the agreed facilities and areas. Said lists shall be submitted to Iraqi authorities by the United States Forces. For purposes of this Agreement, members of the United States Forces and of the civilian component may enter and leave Iraq through agreed facilities and areas requiring only identification cards issued for them by the United States. The Joint Committee shall assume the task of setting up a mechanism and a process for inspecting and verifying the validity of these documents.

Article 15—Import and Export

  1. For the exclusive purposes of implementing this Agreement, the United States Forces and United States contractors may import, export (items bought in Iraq), re-export, transport, and use in Iraq any equipment, supplies, materials, and technology, provided that the materials imported or brought in by them are not banned in Iraq as of the date this Agreement enters into force. The importation, re-exportation, transportation, and use of such items shall not be subject to any inspections, licenses, or other restrictions, taxes, customs duties, or any other charges imposed in Iraq, as defined in Article 2, paragraph 10. United States Forces authorities shall provide to relevant Iraqi authorities an appropriate certification that such items are being imported by the United States Forces or United States contractors for use by the United States Forces exclusively for the purposes of this Agreement. Based on security information that becomes available, Iraqi authorities have the right to request the United States Forces to open in their presence any container in which such items are being imported in order to verify its contents. In making such a request, Iraqi authorities shall honor the security requirements of the United States Forces and, if requested to do so by the United States Forces, shall make such verifications in facilities used by the United States Forces. The exportation of Iraqi goods by the United States Forces and United States contractors shall not be subject to inspections or any restrictions other than licensing requirements. The Joint Committee shall work with the Iraqi Ministry of Trade to expedite license requirements consistent with Iraqi law for the export of goods purchased in Iraq by the United States Forces for the purposes of this Agreement. Iraq has the right to demand review of any issues arising out of this paragraph. The Parties shall consult immediately in such cases through the Joint Committee or, if necessary, the Joint Ministerial Committee.
  2. Members of the United States Forces and of the civilian component may import into Iraq, re-export, and use personal effect materials and equipment for consumption or personal use. The import into, re-export from, transfer from, and use of such imported items in Iraq shall not be subjected to licenses, other restrictions, taxes, custom duties, or any other charges imposed in Iraq, as defined in Article 2, paragraph 10. The imported quantities shall be reasonable and proportionate to personal use. United States Forces authorities will take measures to ensure that no items or material of cultural or historic significance to Iraq are being exported.
  3. Any inspections of materials pursuant to paragraph 2 by Iraqi authorities must be done urgently in an agreed upon place and according to procedures established by the Joint Committee.
  4. Any material imported free of customs and fees in accordance with this Agreement shall be subjected to taxes and customs and fees as defined in Article 2, paragraph 10, or any other fees valued at the time of sale in Iraq, upon sale to individuals and entities not covered by tax exemption or special import privileges. Such taxes and fees (including custom duties) shall be paid by the transferee for the items sold.
  5. Materials referred to in the paragraphs of this Article must not be imported or used for commercial purposes.

Article 16—Taxes

  1. Any taxes, duties, or fees as defined in Article 2, paragraph 10, with their value determined and imposed in the territory of Iraq, shall not be imposed on goods and services purchased by or on behalf of the United States Forces in Iraq for official use or on goods and services that have been purchased in Iraq on behalf of the United States Forces.
  2. Members of the United States Forces and of the civilian component shall not be responsible for payment of any tax, duty, or fee that has its value determined and imposed in the territory of Iraq, unless in return for services requested and received.

Article 17—Licenses or Permits

  1. Valid driver’s licenses issued by United States authorities to members of the United States Forces and of the civilian component, and to United States contractor employees, shall be deemed acceptable to Iraqi authorities. Such license holders shall not be subject to a test or fee for operating the vehicles, vessels, and aircraft belonging to the United States Forces in Iraq.
  2. Valid driver’s licenses issued by United States authorities to members of the United States Forces and of the civilian component, and to United States contractor employees, to operate personal cars within the territory of Iraq shall be deemed acceptable to Iraqi authorities. License holders shall not be subject to a test or fee.
  3. All professional licenses issued by United States authorities to members of the United States Forces and of the civilian component, and to United States contractor employees shall be deemed valid by Iraqi authorities, provided such licenses are related to the services they provide within the framework of performing their official duties for or contracts in support of the United States Forces, members of the civilian component, United States contractors, and United States contractor employees, according to terms agreed upon by the Parties.

Article 18—Official and Military Vehicles

  1. Official vehicles shall display official Iraqi license plates to be agreed upon between the Parties. Iraqi authorities shall, at the request of the authorities of the United States Forces, issue registration plates for official vehicles of the United States Forces without fees, according to procedures used for the Iraqi Armed Forces. The authorities of the United States Forces shall pay to Iraqi authorities the cost of such plates.
  2. Valid registration and licenses issued by United States authorities for official vehicles of the United States Forces shall be deemed acceptable by Iraqi authorities.
  3. Military vehicles exclusively used by the United States Forces will be exempted from the requirements of registration and licenses, and they shall be clearly marked with numbers on such vehicles.

Article 19—Support Activities Services

  1. The United States Forces, or others acting on behalf of the United States Forces, may assume the duties of establishing and administering activities and entities inside agreed facilities and areas, through which they can provide services for members of the United States Forces, the civilian component, United States contractors, and United States contractor employees. These entities and activities include military post offices; financial services; shops selling food items, medicine, and other commodities and services; and various areas to provide entertainment and telecommunications services, including radio broadcasts. The establishment of such services does not require permits.
  2. Broadcasting, media, and entertainment services that reach beyond the scope of the agreed facilities and areas shall be subject to Iraqi laws.
  3. Access to the Support Activities Services shall be limited to members of the United States Forces and of the civilian component, United States contractors, United States contractor employees, and other persons and entities that are agreed upon. The authorities of the United States Forces shall take appropriate actions to prevent misuse of the services provided by the mentioned activities, and prevent the sale or resale of aforementioned goods and services to persons not authorized access to these entities or to benefit from their services. The United States Forces will determine broadcasting and television programs to authorized recipients.
  4. The service support entities and activities referred to in this Article shall be granted the same financial and customs exemptions granted to the United States Forces, including exemptions guaranteed in Articles 15 and 16 of this Agreement. These entities and activities that offer services shall be operated and managed in accordance with United States regulations; these entities and activities shall not be obligated to collect nor pay taxes or other fees related to the activities in connection with their operations.
  5. The mail sent through the military post service shall be certified by United States Forces authorities and shall be exempt from inspection, search, and seizure by Iraqi authorities, except for non-official mail that may be subject to electronic observation. Questions arising in the course of implementation of this paragraph shall be addressed by the concerned Joint Sub-Committee and resolved by mutual agreement. The concerned Joint Sub-Committee shall periodically inspect the mechanisms by which the United States Forces authorities certify military mail.

Article 20—Currency and foreign exchange

  1. The United States Forces shall have the right to use any amount of cash in United States currency or financial instruments with a designated value in United States currency exclusively for the purposes of this Agreement. Use of Iraqi currency and special banks by the United States Forces shall be in accordance with Iraqi laws.
  2. The United States Forces may not export Iraqi currency from Iraq, and shall take measures to ensure that members of the United States Forces, of the civilian component, and United States contractors and United States contractor employees do not export Iraqi currency from Iraq.

Article 21—Claims

  1. With the exception of claims arising from contracts, each Party shall waive the right to claim compensation against the other Party for any damage, loss, or destruction of property, or compensation for injuries or deaths that could happen to members of the force or civilian component of either Party arising out of the performance of their official duties in Iraq.
  2. United States Forces authorities shall pay just and reasonable compensation in settlement of meritorious third party claims arising out of acts, omissions, or negligence of members of the United States Forces and of the civilian component done in the performance of their official duties and incident to the non-combat activities of the United States Forces. United States Forces authorities may also settle meritorious claims not arising from the performance of official duties. All claims in this paragraph shall be settled expeditiously in accordance with the laws and regulations of the United States. In settling claims, United States Forces authorities shall take into account any report of investigation or opinion regarding liability or amount of damages issued by Iraqi authorities.
  3. Upon the request of either Party, the Parties shall consult immediately through the Joint Committee or, if necessary, the Joint Ministerial Committee, where issues referred to in paragraphs 1 and 2 above require review.

Article 22—Detention

  1. No detention or arrest may be carried out by the United States Forces (except with respect to detention or arrest of members of the United States Forces and of the civilian component) except through an Iraqi decision issued in accordance with Iraqi law and pursuant to Article 4.
  2. In the event the United States Forces detain or arrest persons as authorized by this Agreement or Iraqi law, such persons must be handed over to competent Iraqi authorities within 24 hours from the time of their detention or arrest.
  3. The Iraqi authorities may request assistance from the United States Forces in detaining or arresting wanted individuals.
  4. Upon entry into force of this Agreement, the United States Forces shall provide to the Government of Iraq available information on all detainees who are being held by them. Competent Iraqi authorities shall issue arrest warrants for persons who are wanted by them. The United States Forces shall act in full and effective coordination with the Government of Iraq to turn over custody of such wanted detainees to Iraqi authorities pursuant to a valid Iraqi arrest warrant and shall release all the remaining detainees in a safe and orderly manner, unless otherwise requested by the Government of Iraq and in accordance with

Article 4 of this Agreement.
The United States Forces may not search houses or other real estate properties except by order of an Iraqi judicial warrant and in full coordination with the Government of Iraq, except in the case of actual combat operations conducted pursuant to Article 4.

Article 23—Implementation

  1. Implementation of this Agreement and the settlement of disputes arising from the interpretation and application thereof shall be vested in the following bodies:
  2. A Joint Ministerial Committee shall be established with participation at the Ministerial level determined by both Parties. The Joint Ministerial Committee shall deal with issues that are fundamental to the interpretation and implementation of this Agreement.
  3. The Joint Ministerial Committee shall establish a JMOCC consisting of representatives from both Parties. The JMOCC shall be co-chaired by representatives of each Party.
  4. . The Joint Ministerial Committee shall also establish a Joint Committee consisting of representatives to be determined by both Parties. The Joint Committee shall be cochaired by representatives of each Party, and shall deal with all issues related to this Agreement outside the exclusive competence of the JMOCC.
  5. In accordance with paragraph 3 of this Article, the Joint Committee shall establish Joint Sub-Committees in different areas to consider the issues arising under this Agreement according to their competencies.

Article 24—Withdrawal of the United States Forces from Iraq

  1. Recognizing the performance and increasing capacity of the Iraqi Security Forces, the assumption of full security responsibility by those Forces, and based upon the strong relationship between the Parties, an agreement on the following has been reached:
  2. All the United States Forces shall withdraw from all Iraqi territory no later than December 31, 2011.
  3. All United States combat forces shall withdraw from Iraqi cities, villages, and localities no later than the time at which Iraqi Security Forces assume full responsibility for security in an Iraqi province, provided that such withdrawal is completed no later than June 30, 2009.
  4. United States combat forces withdrawn pursuant to paragraph 2 above shall be stationed in the agreed facilities and areas outside cities, villages, and localities to be designated by the JMOCC before the date established in paragraph 2 above.
  5. The United States recognizes the sovereign right of the Government of Iraq to request the departure of the United States Forces from Iraq at any time. The Government of Iraq recognizes the sovereign right of the United States to withdraw the United States Forces from Iraq at any time.
  6. The Parties agree to establish mechanisms and arrangements to reduce the number of the United States Forces during the periods of time that have been determined, and they shall agree on the locations where the United States Forces will be present.

Article 25—Measures to Terminate the Application of Chapter VII to Iraq

  1. Acknowledging the right of the Government of Iraq not to request renewal of the Chapter VII authorization for and mandate of the multinational forces contained in United Nations Security Council Resolution 1790 (2007) that ends on December 31, 2008;
  2. Taking note of the letters to the UN Security Council from the Prime Minister of Iraq andthe Secretary of State of the United States dated December 7 and December 10, 2007, respectively, which are annexed to Resolution 1790;
  3. Taking note of section 3 of the Declaration of Principles for a Long-Term Relationship of Cooperation and Friendship, signed by the President of the United States and the Prime Minister of Iraq on November 26, 2007, which memorialized Iraq’s call for extension of the above-mentioned mandate for a final period, to end not later than December 31, 2008:
  4. Recognizing also the dramatic and positive developments in Iraq, and noting that the situation in Iraq is fundamentally different than that which existed when the UN Security Council adopted Resolution 661 in 1990, and in particular that the threat to international peace and security posed by the Government of Iraq no longer exists, the Parties affirm in this regard that with the termination on December 31, 2008 of the Chapter VII mandate and authorization for the multinational force contained in Resolution 1790, Iraq should return to the legal and international standing that it enjoyed prior to the adoption of UN Security Council Resolution 661 (1990), and that the United States shall use its best efforts to help Iraq take the steps necessary to achieve this by December 31, 2008.

Article 26—Iraqi Assets

  1. To enable Iraq to continue to develop its national economy through the rehabilitation of its economic infrastructure, as well as providing necessary essential services to the Iraqi people, and to continue to safeguard Iraq’s revenues from oil and gas and other Iraqi resources and its financial and economic assets located abroad, including the Development Fund for Iraq, the United States shall ensure maximum efforts to:
  2. Support Iraq to obtain forgiveness of international debt resulting from the policies of the former regime.
  3. Support Iraq to achieve a comprehensive and final resolution of outstanding reparation claims inherited from the previous regime, including compensation requirements imposed by the UN Security Council on Iraq.
  4. Recognizing and understanding Iraq’s concern with claims based on actions perpetrated by the former regime, the President of the United States has exercised his authority to protect from United States judicial process the Development Fund for Iraq and certain other property in which Iraq has an interest. The United States shall remain fully and actively engaged with the Government of Iraq with respect to continuation of such protections and with respect to such claims.
  5. Consistent with a letter from the President of the United States to be sent to the Prime Minister of Iraq, the United States remains committed to assist Iraq in connection with its request that the UN Security Council extend the protections and other arrangements established in Resolution 1483 (2003) and Resolution 1546 (2004) for petroleum, petroleum products, and natural gas originating in Iraq, proceeds and obligations from sale thereof, and the Development Fund for Iraq.

Article 27—Deterrence of Security Threats

  1. In order to strengthen security and stability in Iraq and to contribute to the maintenance of international peace and stability, the Parties shall work actively to strengthen the political and military capabilities of the Republic of Iraq to deter threats against its sovereignty, political independence, territorial integrity, and its constitutional federal democratic system. To that end, the Parties agree as follows:
  2. In the event of any external or internal threat or aggression against Iraq that would violate its sovereignty, political independence, or territorial integrity, waters, airspace, its democratic system or its elected institutions, and upon request by the Government of Iraq, the Parties shall immediately initiate strategic deliberations and, as may be mutually agreed, the United States shall take appropriate measures, including diplomatic, economic, or military measures, or any other measure, to deter such a threat.
  3. The Parties agree to continue close cooperation in strengthening and maintaining military and security institutions and democratic political institutions in Iraq, including, as may be mutually agreed, cooperation in training, equipping, and arming the Iraqi Security Forces, in order to combat domestic and international terrorism and outlaw groups, upon request by the Government of Iraq.
  4. Iraqi land, sea, and air shall not be used as a launching or transit point for attacks against other countries.

Article 28—The Green Zone

Upon entry into force of this Agreement the Government of Iraq shall have full responsibility for the Green Zone. The Government of Iraq may request from the United States Forces limited and temporary support for the Iraqi authorities in the mission of security for the Green Zone. Upon such request, relevant Iraqi authorities shall work jointly with the United States Forces authorities on security for the Green Zone during the period determined by the Government of Iraq.

Article 29—Implementing Mechanisms

Whenever the need arises, the Parties shall establish appropriate mechanisms for implementation of Articles of this Agreement, including those that do not contain specific implementation mechanisms.

Article 30—The Period for which the Agreement is Effective

  1. This Agreement shall be effective for a period of three years, unless terminated sooner by either Party pursuant to paragraph 3 of this Article.
  2. This Agreement shall be amended only with the official agreement of the Parties in writing and in accordance with the constitutional procedures in effect in both countries.
  3. This Agreement shall terminate one year after a Party provides written notification to the other Party to that effect.
  4. This Agreement shall enter into force on January 1, 2009, following an exchange of diplomatic notes confirming that the actions by the Parties necessary to bring the Agreement into force in accordance with each Party’s respective constitutional procedures have been completed.

Signed in duplicate in Baghdad on this 17th day of November, 2008, in the English and Arabic languages, each text being equally authentic.
FOR THE UNITED STATES OF AMERICA:
FOR THE REPUBLIC OF IRAQ:


Flashback: US/Iraq Strategic Framework Agreement (SOFA) (associated documents are attached at the bottom of the page)

Posted: October 19, 2011 by THE CURRENCY NEWSHOUND

The Currency Newshound Commentary: In recent days there have been articles referring to Joe Biden and the Strategic Framework Agreement (Example  1 / Example 2). For those who are not familiar with this document the following post will bring you up to date. Section V places emphasis on Iraq’s economy…

Strategic Framework Agreement for a Relationship of Friendship and Cooperation between the United States of America and the Republic of Iraq

Preamble
The United States of America and the Republic of Iraq:

1. Affirming the genuine desire of the two countries to establish a long- term relationship of cooperation and friendship, based on the principle of equality in sovereignty and the rights and principles that are enshrined in the United Nations Charter and their common interests;

2. Recognizing the major and positive developments in Iraq that have taken place subsequent to April 9, 2003; the courage of the Iraqi people in establishing a democratically elected government under a new constitution; and welcoming no later than December 31, 2008, the termination of the Chapter VII authorization for and mandate of the multinational forces in UNSCR 1790; noting that the situation in Iraq is fundamentally different than that which existed when the UN Security Council adopted Resolution 661 in 1990, and in particular that the threat to international peace and security posed by the Government of Iraq no longer exists; and affirming in that regard that Iraq should return by December 31, 2008 to the legal and international standing that it enjoyed prior to the issuance of UNSCR 661;

3. Consistent with the Declaration of Principles for a Long-Term Relationship of Cooperation and Friendship Between the Republic of Iraq and the United States of America, which was signed on November 26, 2007;

4. Recognizing both countries’ desire to establish a long-term relationship, the need to support the success of the political process, reinforce national reconciliation within the framework of a unified and federal Iraq, and to build a diversified and advanced economy that ensures the integration of Iraq into the international community; and

5. Reaffirming that such a long-term relationship in economic, diplomatic, cultural and security fields will contribute to the strengthening and development of democracy in Iraq, as well as ensuring that Iraq will assume full responsibility for its security, the safety of its people, and maintaining peace within Iraq and among the countries of the region.

Have agreed to the following:

Section I: Principles of Cooperation
This Agreement is based on a number of general principles to establish the course of the future relationship between the two countries as follows:

1. A relationship of friendship and cooperation is based on mutual respect; recognized principles and norms of international law and fulfillment of international obligations; the principle of non-interference in internal affairs; and rejection of the use of violence to settle disputes.

2. A strong Iraq capable of self-defense is essential for achieving stability in the region.

3. The temporary presence of U.S. forces in Iraq is at the request and invitation of the sovereign Government of Iraq and with full respect for the sovereignty of Iraq.

4. The United States shall not use Iraqi land, sea, and air as a launching or transit point for attacks against other countries; nor seek or request permanent bases or a permanent military presence in Iraq.

Section II: Political and Diplomatic Cooperation
The Parties share a common understanding that their mutual efforts and cooperation on political and diplomatic issues shall improve and strengthen security and stability in Iraq and the region. In this regard, the United States shall ensure maximum efforts to work with and through the democratically elected Government of Iraq to:

1 Support and strengthen Iraq’s democracy and its democratic institutions as defined and established in the Iraqi Constitution, and in so doing, enhance Iraq’s capability to protect these institutions against all internal and external threats.

2.Support and enhance Iraq’s status in regional and international organizations and institutions so that it may play a positive and constructive role in the international community.

3.Support the Government of Iraq in establishing positive relations with the states of the region, including on issues consequent to the actions of the former regime that continue to harm Iraq, based on mutual respect and the principles of non-interference and positive dialogue among states, and the peaceful resolution of disputes, without the use of force or violence, in a manner that enhances the security and stability of the region and the prosperity of its peoples.

Section III: Defense and Security Cooperation
In order to strengthen security and stability in Iraq, and thereby contribute to international peace and stability, and to enhance the ability of the Republic of Iraq to deter all threats against its sovereignty, security, and territorial integrity, the Parties shall continue to foster close cooperation concerning defense and security arrangements without prejudice to Iraqi sovereignty over its land, sea, and air territory. Such security and defense cooperation shall be undertaken pursuant to the Agreement Between the United States of America and the Republic of Iraq on the Withdrawal of United States Forces from Iraq and the Organization of Their Activities during Their Temporary Presence in Iraq.

Section IV: Cultural Cooperation
The Parties share the conviction that connections between their citizens, forged through cultural exchanges, educational links and the exploration of their common archeological heritage will forge strong, long lasting bonds of friendship and mutual respect. To that end, the Parties agree to cooperate to:

1. Promote cultural and social exchanges and facilitate cultural activities, such as Citizens Exchanges, the Youth Exchange and Study Program, the Global Connections and Exchange (GCE) program, and the English Language Teaching and Learning program.

2. Promote and facilitate cooperation and coordination in the field of higher education and scientific research, as well as encouraging investment in education, including through the establishment of universities and affiliations between Iraqi and American social and academic institutions such as the U.S. Department of Agriculture’s (USDA’s) agricultural extension program.

3. Strengthen the development of Iraq’s future leaders, through exchanges, training programs, and fellowships, such as the Fulbright program and the International Visitor Leadership Program (IVLP), in fields including science, engineering, medicine, information technology, telecommunications, public administration, and strategic planning.

4.Strengthen and facilitate the application process for U.S visas consistent with U.S. laws and procedures, to enhance the participation of qualified Iraqi individuals in scientific, educational, and cultural activities.

5. Promote Iraq’s efforts in the field of social welfare and human rights.

6. Promote Iraqi efforts and contributions to international efforts to preserve Iraqi cultural heritage and protect archeological antiquities, rehabilitate Iraqi museums, and assist Iraq in recovering and restoring its smuggled artifacts through projects such as the Future of Babylon Project, and measures taken pursuant to the U.S. Emergency Protection for Iraqi Cultural Antiquities Act of 2004.

Section V: Economic and Energy Cooperation
Building a prosperous, diversified, growing economy in Iraq, integrated in the global economic system, capable of meeting the essential service needs of the Iraqi people, as well as welcoming home Iraqi citizens currently dwelling outside of the country, will require unprecedented capital investment in reconstruction, the development of Iraq’s extraordinary natural and human resources, and the integration of Iraq into the international economy and its institutions. To that end the Parties agree to cooperate to:

1.Support Iraq’s efforts to invest its resources towards economic development, sustainable development and investment in projects that improve the basic services for the Iraqi people.

2. Maintain active bilateral dialogue on measures to increase Iraq’s development, including through the Dialogue on Economic Cooperation (DEC) and, upon entry into force, the Trade and Investment Framework Agreement.

3. Promote expansion of bilateral trade through the U.S.-Iraq Business Dialogue, as well as bilateral exchanges, such as trade promotion activities and access to Export-Import Bank programs.

4. Support Iraq’s further integration into regional and international financial and economic communities and institutions, including membership in the World Trade Organization and through continued Normal Trade Relations with the United States.

5. Reinforce international efforts to develop the Iraqi economy and Iraqi efforts to reconstruct, rehabilitate, and maintain its economic infrastructure, including continuing cooperation with the Overseas Private Investment Corporation.

6. Urge all parties to abide by commitments made under the International Compact with Iraq with the goal of rehabilitating Iraq’s economic institutions and increasing economic growth through the implementation of reforms that lay the foundation for private sector development and job creation.

7. Facilitate the flow of direct investment into Iraq to contribute to the reconstruction and development of its economy.

8. Promote Iraq’s development of the Iraqi electricity, oil, and gas sector, including the rehabilitation of vital facilities and institutions and strengthening and rehabilitating Iraqi capabilities.

9. Work with the international community to help locate and reclaim illegally exported funds and properties of Saddam Hussein’s family and key members of his regime, as well as its smuggled archeological artifacts and cultural heritage before and after April 9, 2003.

10. Encourage the creation of a positive investment environment to modernize Iraq’s private industrial sector to enhance growth and expand industrial production including through encouraging networking with U.S. industrial institutions.

11. Encourage development in the fields of air, land, and sea transportation as well as rehabilitation of Iraqi ports and enhancement of maritime trade between the Parties, including by facilitating cooperation with the U.S. Federal Highway Administration.

12. Maintain an active dialogue on agricultural issues to help Iraq develop its domestic agricultural production and trade policies.

13. Promote access to programs that increase farm, firm, and marketing productivity to generate higher incomes and expanded employment, building on successful programs by the USDA and the USAID programs in agribusiness, agriculture extension, and policy engagement.

14. Encourage increased Iraqi agricultural exports, including through policy engagement and encouraging education of Iraqi exporters on U.S. health and safety regulations.

Section VI: Health and Environmental Cooperation
In order to improve the health of the citizens of Iraq, as well as protect and improve the extraordinary natural environment of the historic Lands of the Two Rivers, the Parties agree to cooperate to:

1.Support and strengthen Iraq’s efforts to build its health infrastructure and to strengthen health systems and networks.

2. Support Iraq’s efforts to train health and medical cadres and staff.

3. Maintain dialogue on health policy issues to support Iraq’s long-term development. Topics may include controlling the spread of infectious diseases, preventative and mental health, tertiary care, and increasing the efficiency of Iraq’s medicine procurement system.

4. Encourage Iraqi and international investment in the health field, and facilitate specialized professional exchanges in order to promote the transfer of expertise and to help foster relationships between medical and health institutions building on existing programs with the U.S. Department of Health and Human Services, including its Centers for Disease Control and Prevention.

5. Encourage Iraqi efforts to strengthen mechanisms for protecting, preserving, improving, and developing the Iraqi environment and encouraging regional and international environmental cooperation.

Section VII: Information Technology and Communications Cooperation
Communications are the lifeblood of economic growth in the twenty-first century, as well as the foundation for the enhancement of democracy and civil society. In order to improve access to information and promote the development of a modern and state of the art communications industry in Iraq, the Parties agree to cooperate to:

1. Support the exchange of information and best practices in the fields of regulating telecommunications services and the development of information technology policies.

2. Exchange views and practices relating to liberalizing information technologies and telecommunications services markets, and the strengthening of an independent regulator.

3. Promote active Iraqi participation in the meetings and initiatives of the Internet Governance Forum, including its next global meetings.

Section VIII: Law Enforcement and Judicial Cooperation
The Parties agree to cooperate to:

1. Support the further integration and security of the Iraqi criminal justice system, including police, courts, and prisons.

2. Exchange views and best practices related to judicial capacity building and training, including on continuing professional development for judges, judicial investigators, judicial security personnel, and court administrative staff.

3. Enhance law enforcement and judicial relationships to address corruption, and common transnational criminal threats, such as terrorism, trafficking in persons, organized crime, drugs, money laundering, smuggling of archeological artifacts, and cyber crime.

Section IX: Joint Committees
1. The Parties shall establish a Higher Coordinating Committee (HCC) to monitor the overall implementation of the Agreement and develop the agreed upon objectives. The committee shall meet periodically and may include representatives from relevant departments and ministries.

2. The Parties shall seek to establish additional Joint Coordination Committees (JCCs), as necessary, responsible for executing and overseeing this Agreement. The JCCs will report to the HCC and are to:

a. Monitor implementation and consult regularly to promote the most effective implementation of this Agreement and to assist in dispute resolution as necessary;

b. Propose new cooperation projects and carry out discussions and negotiations as necessary to reach an agreement about details of such cooperation; and

c. Include other governmental departments and ministries for broader coordination from time to time, with meetings in Iraq and the United States, as appropriate.

3. Disputes that may arise under this Agreement, if not resolved within the relevant JCC, and not amenable to resolution within the HCC, are to be settled through diplomatic channels.

Section X: Implementing Agreements and Arrangements
The Parties may enter into further agreements or arrangements as necessary and appropriate to implement this Agreement.

Section XI: Final Provisions
1. This Agreement shall enter into force on January 1, 2009, following an exchange of diplomatic notes confirming that the actions by the Parties necessary to bring the Agreement into force in accordance with the respective constitutional procedures in effect in both countries have been completed.

2. This Agreement shall remain in force unless either Party provides written notice to the other of its intent to terminate this Agreement. The termination shall be effective one year after the date of such notification.

3. This Agreement may be amended with the mutual written agreement of the Parties and in accordance with the constitutional procedures in effect in both countries.

4. All cooperation under this Agreement shall be subject to the laws and regulations of both countries.

Signed in duplicate in Baghdad on this 17th day of November, 2008, in the English and Arabic language, each text being equally authentic.


CNBC: NY Fed’s $40 Billion Iraqi Money Trail

Posted: October 25, 2011 by THE CURRENCY NEWSHOUND - Just Hopin in Iraqi Dinar/Politics
Tags: ,

It has been called the largest airborne transfer of currency in the history of the world. But finding out what happened to all the money involved has become one of the biggest financial mysteries of all time.

Beginning in the very earliest days of the war in Iraq, the New York Federal Reserve shipped billions of dollars in physical cash to Baghdad to pay for the reopening of the government and restoration of basic services.

Read more:

NY Fed's $40 Billion Iraqi Money Trail
CNBC.com | October 25, 2011 | 02:25 PM EDT

It has been called the largest airborne transfer of currency in the history of the world. But finding out what happened to all the money involved has become one of the biggest financial mysteries of all time.

Beginning in the very earliest days of the war in Iraq, the New York Federal Reserve shipped billions of dollars in physical cash to Baghdad to pay for the reopening of the government and restoration of basic services.

The money was packed onto pallets inside a heavily guarded New York Federal Reserve compound in East Rutherford, New Jersey, trucked to Andrews Air Force Base outside of Washington, and flown by military aircraft to Baghdad International Airport.

By one account, the New York Fed shipped about $40 billion in cash between 2003 and 2008. In just the first two years, the shipments included more than 281 million individual bills weighing a total of 363 tons. But soon after the money arrived in the chaos of war-torn Baghdad, the paper trail documenting who controlled it all began to go cold.

Since then, investigators have spent years trying to trace what happened to the enormous amount of money shipped in the frantic days of the occupation of Iraq. Although there have been hundreds of pages of reports, Congressional hearings, and inquiries from Washington to Baghdad, no one in Congress, a special inspector general’s office, the Department of Defense or the Iraqi government itself can say with certainty what exactly happened to all of that money.

Much of it may have been spent on the things it was intended for—but billions of dollars may have simply been stolen. The thefts likely ranged from complicated contracting schemes to brazen appropriations of billions in cash still in their New York Fed plastic wrappers.

To find out what happened, a special inspector general for Iraq reconstruction has focused on the chain of custody—who was responsible for the money, minute by minute, as it made its way to Baghdad.

And although the money was handled by a variety of trained American officials and military officers in the first legs of its trip halfway around the world, CNBC has learned that something unusual happened on the Baghdad side of the transaction: Each of the money flights to Baghdad was met at the airport in Iraq by the same man.

The previously unknown Coalition Provisional Authority (CPA) official was tasked with picking up the bales of billions as they were unloaded from C-17s and arranging for them to get to the Central Bank of Iraq in downtown Baghdad. It was a perilous journey of about seven miles over a road the U.S. military called “Route Irish” through territory often controlled by insurgents. Travelers faced the threat of rocket propelled grenades, mortars, car bombs and IEDs.

Transit was so dangerous that returning American GI’s often posted YouTube videos of their trips on Route Irish, just for the bragging rights of having been there.

The CPA official was a stocky, middle-aged naturalized American citizen of Lebanese descent who was born in Saudi Arabia. His first name is Basel. At his request, CNBC has agreed to withhold his last name from this story. Basel ferried cash in Baghdad for the CPA and the American embassy from 2003 until 2008—all told handling, he said, about $40 billion in cash.

His job made him the very last American to see that money before it disappeared into the vaults at the Central Bank of Iraq. And it may have made him the only person in the history of the world to oversee the movement of $40 billion in a combat zone.

It doesn’t seem that anyone in the US government planned ahead of time to put so much responsibility—and temptation—into the hands of just one man. Former Republican Connecticut Congressman Christopher Shays co-chaired the Commission on Wartime Contracting, digging into waste, fraud and abuse in Iraq. He has traveled to Iraq scores of times to oversee US efforts there. Shays did a double take when CNBC told him how much money Basel said he handled in Iraq.

“Wait, one person?” Shays asked. “One person received $40 billion?”

Asked what he thinks about that, Shays said, “It just blows you away.”

The enormous undertaking of moving the billions began in the heavily guarded Federal Reserve compound on 100 Orchard Street in East Rutherford, NJ. There, carefully screened employees loaded pallets of cash into tractor-trailers for their journey down I-95 toward Washington, DC. The money came from an account held at the New York Fed called the “Development Fund for Iraq” which was made up of billions of dollars in Saddam Hussein’s financial assets that had been frozen under various US and global sanctions regimes. They weren’t taxpayer dollars, but the US government was responsible for making sure they got where they were going.

A typical pallet held 640 bundles, which the handlers called “bricks,” with a thousand bills in each bundle. Each pallet weighed 1,500 pounds, and they were separated by color. Gold seals were used for $100 bills, brown seals held $50 bills, purple seals $20, and so on.

The operation was handled with the utmost secrecy—just imagine what could have happened if the mafia found out which trucks held the money. The chain of custody of the cash was rigorously documented as it left the custody of the New York Fed and was signed over to Air Force officers, who oversaw the loading of C-17 transport planes and flew with the bales of money on the long flight to Baghdad. When the cargo holds were unloaded in Baghdad, Basel was there. But his presence on the receiving end of the largest airborne currency transfer in history began almost entirely by accident.

As a fluent speaker of multiple Arabic dialects, Basel had come to Iraq as a civilian with the American military. Both he and his former boss say Basel was sitting in a waiting area in Saddam Hussein’s palace in early 2003, waiting for his first assignment. While he was waiting, a US Treasury official burst into the room, looking for a translator.

“I have a situation here,” the official said. Basel raised his hand to help.

Soon he found himself wrangling with a crew of Iraqi truck drivers who had been told to make a delivery to the Central Bank of Iraq. But the bank was closed for the night, and they did not understand the instructions their American overseers were trying to impart about where to store their trucks. Basel intervened, untangling the confusion.

Impressed, the Treasury official, David Nummy, recruited Basel on the spot. Nummy said he soon put Basel in charge of meeting the cash flights from Washington at Baghdad airport, largely because he found Basel to be trustworthy. “He proved himself to be very reliable,” Nummy said of Basel in an interview with CNBC. “Very competent. Very committed and he performed a great service during the time that I was there.”

“I'm not surprised that he turned out as good as he did,” Nummy said. “I think its … one of many examples we hear of people being in the right place at the right time and find their calling really by circumstance.”

Basel said he brought two senior Iraqi government officials with him to the airport for each flight, and those people signed receipts presented by the Air Force officials for the money, witnessing each other’s signature. It was for the government’s protection—and his own. Basel wanted to be able to prove that he had turned over the money as promised. But in the chaos of war planning, no one seems to have thought about paperwork. Basel said the CPA didn’t give him any forms or documents with which to record the transfer of the billions. So he wrote up his own, using Microsoft Word.

One document Basel showed CNBC was a one-page receipt of shipment for a billion-dollar delivery in April of 2006. Basel typed it up himself. It read, in part: “This is to testify that we, the undersigned, have received in our custody from [Basel’s full name] … the total amount of USD 1,000,000,000.00 (United States Dollars One Billion Only).” At the bottom were the hastily scrawled signatures of two officials of the Central Bank of Iraq.

“Its my neck on the line,” Basel said. “I documented the hell out of this.” With the Iraqi government signatures in place, the money was in legal custody of the government of Iraq from the instant it was unloaded from the C-17s. It was Basel’s job to make sure it stayed that way, at least until it got to the vaults of the Central Bank of Iraq.

Though he said he had no formal security training, Basel demonstrated a flair for subterfuge. Knowing a successful heist of the cash would be a momentum-shifting bonanza for the growing Iraqi insurgency, Basel rolled out a variety of tricks to keep the insurgents from figuring out just how much cash was moving right past them. He didn’t repeat the same configuration of trucks and cars to carry the money, so any watching insurgents or criminals wouldn’t be able to pin down a pattern of which vehicles carried cash. On some of the most dangerous missions, he eschewed the bristling military security convoys that would be a sure sign that something important was being shipped.

He worked on scheduling the timing of the flights, so they wouldn’t arrive in Baghdad at a dangerous moment. He hired scouts to park on overpasses and drive the route ahead of the convoy to report on suspicious activity. And he used jammers to block the cell phone signals of any insurgents who tried to call in details of the convoy’s movement or trigger a bomb in the roadway.

On one billion-dollar run, Basel used garbage trucks to throw the insurgents off the trail. “I hired garbage trucks, and in the back of the garbage truck you had $1 billion dollars.” Basel said. “And I was in the front with a gun pointed at the driver. I said to him, ‘don't try anything funny. If everything goes well, you'll make $1,000. If you make a move, I'll kill you right here and drive the rest of the way myself.’”

He said the drivers he hired were thrilled to get $1,000, and that none ever tried to steal a single bill. It helped, he said, that he never used the same driver twice.

And he was not averse to using force. “I am willing and able to engage any entity,” said. “I will open fire first and ask questions later.” He held a firm belief in overwhelming firepower. “If you want to mess with a .50 cal (machine gun), go ahead and be my guest. You will lose every time.”

Basel’s Baghdad job came with enormous risks. At one point, the insurgents placed a million-dollar bounty on his head. At another, the Iraqi government issued a warrant for his arrest. Basel laughs off both incidents, saying the bounty should have been higher, and that the arrest warrant was a political trap designed to damage his credibility.

He said through all that, he never lost a shipment. “My record shows, you give Basel $10 billion to deliver, and Basel delivers $10 billion plus $400,” he said. “I delivered more money than I received.” That was possible, he explained, because the U.S. military came to him with any cash they found during nighttime raids on insurgent hideouts. Figuring that money rightly belonged to the Iraqi government, Basel said he delivered it to the Central Bank along with the pallets of cash from the New York Fed.

Basel said he didn’t steal any of the Baghdad billions, but he knows who stole at least some of it.

Asked whether he thinks any of the money he delivered was stolen or misappropriated, Basel said, “absolutely, without a doubt.” But asked who stole it, he said, “I’m sure I have an idea, but I can’t name names.” That’s because, he explained quietly, “I have a wife and family to worry about.”

When CNBC showed up in front of the East Rutherford Operations Center of the New York Fed to record a video segment for this story, police officers working for the Fed shooed our camera crew off the driveway and onto a small strip of public land that abuts the facility. Later, when we returned to our cars in the parking lot of a nearby convenience store, three police cars— including an unmarked car—blocked our exit. A local police officer politely asked us who we were and why we were taking pictures of the Fed. Satisfied that we were who we said we were, he let us go.

Such high-alert security is understandable, given the huge amounts of currency processed at the sleek modern facility, which was opened in 1992. The accounts held there for the Iraqi government alone are enormous. Despite the $40 billion Basel said he has distributed to the Central Bank of Iraq over the years, the value of the accounts at the New York Fed haven’t gone down—they’ve gone up.

That’s because the government of Iraq continues to pour the proceeds of its newly refurbished oil industry into its accounts at the Fed in New York. In April, the Iraqi government informed the UN security council that it was going to open a new account at the Fed to replace the Development Fund for Iraq account that had been established years earlier. Baghdad will continue to operate a second account, called the “Oil Proceeds Receipts Account” that serves as a cash reserve for the Iraqi Central Bank, supporting the Iraqi currency.

The New York Fed is experienced at this sort of thing—it also holds billions in reserves for a slew of other countries around the world. The New York Fed’s website explains that it offers custodial accounts for foreign government cash and “vault services” services for their gold. The Fed invests the money in “overnight repurchase agreements, or U.S. Treasury and agency securities. The Federal Reserve does not give investment advice.”

Officials at the Fed declined to comment for this story, even to confirm the existence of Iraqi accounts it holds. But publicly, the Fed says that taken together, its gold holdings “constitute the world's largest concentration of monetary gold; the U.S. Treasury's depository at Fort Knox, Kentucky, is the second largest.”

To this day, say several sources, the New York Fed is still rolling trucks filled with bills to Baghdad. According to one source familiar with the Central Bank of Iraq, the amounts are much smaller now than they were in the early days of the war.

Many people in Iraq like to hold dollars instead of dinars. And the Central Bank sells dollars for Iraqi dinars at a fixed exchange rate in auctions it holds on most business days. According to the Central Bank of Iraq, for example, on September 12th 2011, it sold $12.3 million in cash at auction.

As for Basel, his experiences in Iraq opened up huge new opportunities for him around the world. Before the war, he lived in a modest townhouse in suburban Centreville, VA, outside of Washington, DC. But Basel didn’t return to the United States after his time in Baghdad. Instead, he set himself up as one of the world’s leading experts in transporting cash in war zones, operating a business out of his new home of Dubai, in the United Arab Emirates, where we sat down with him for an interview.

Today, Basel says he is planning a trip to Sudan, and is negotiating for a contract to transport billions of dollars in cash into newly liberated Libya.

The man who escorted $40 billion says he still needs to earn a living.



Subpages (1): Iraq's Debt Forgiveness
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Mark Aldrich,
Oct 19, 2011, 8:48 AM
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Mark Aldrich,
Oct 19, 2011, 8:49 AM
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