By John Lee.

The state-owned Trade Bank of Iraq (TBI) has reportedly put plans to buy a Turkish commercial bank on hold because of the fall in the Turkish lira.

TBI chairman Faisal al-Haimus told Reuters that the bank is keen to expand its footprint in Turkey, Iraq’s largest trading partner.

According to the report, TBI has assets of around $20 billion, and is responsible around 80 percent of the trade finance business in Iraq.

(Source: Reuters)

Prime Minister Nechirvan Barzani chaired the 49th regular session of the Council of Ministers on Tuesday. It was also attended by Deputy Prime Minister Qubad Talabani.

Prime Minister Barzani briefed the Council about his recent visit to Baghdad and meeting with Prime Minister Haider al-Abadi. He said, they agreed to continue dialogue and coordination and demanded implementation of the Iraqi Council of Representatives decision to unify salaries and privileges of the families of the martyrs and Anfal victims in the Region with those of their counterparts in the federal government. They also discussed reopening the Erbil-Kirkuk road and the readiness of the KRG to export Kirkuk oil.

Regarding the new Iraqi government, Prime Minister Barzani emphasized the KRG has no veto against anyone. While protecting common interests, he said what is important to the Kurdistan Region is the new government’s programme that would help to materialize the rights and the constitutional authorities of the Kurdistan Region.

Minister of Martyrs and Anfal Affairs Mahmood Haji Salih and Secretary of the Council of Ministers Dr. Amanj Rahim presented a report on the latest developments in the effort towards international recognition of the crimes committed by ISIS against Yezidis and other ethnic and religious communities as genocide, and on UN Security Council’s Resolution 2379 to form a team to investigate this situation.

The Council of Ministers affirmed the Security Council Resolution to be an important step towards recognizing these crimes as genocide. The Council of Ministers assigned the High Commission on Recognition of ISIS Crimes as Genocide to coordinate with the international team.

Prime Minister Barzani instructed the commission to deliver to the UN team all evidence collected during the past four years about crimes against humanity and acts of genocide directed at Yezidis, Christians, and all other communities to apply justice to perpetrators to the full extent of the law and to compensate the victims and their families.

The Council of Ministers called on the Iraqi federal government to take into account the involvement of legal practitioners, experts, and other representatives of the Kurdistan Region in the implementation of the Security Council Resolution.

The Council of Ministers re-emphasized its policy that protects religious rights and freedoms as basic principles of human rights, believes a nation’s strength lies in its diversity, and that the KRG will continue to endeavor to make the Kurdistan Region a safe place for all members of society.

2019 budget draft

The Council of Ministers also discussed the 2019 budget draft. KRG Minister of Finance and Economy, Rebaz Hamlan, presented a report on the 2019 budget draft, a process suspended since 2014 due to the financial crisis. He informed about steps being taken to estimate general revenues and expenditures in collaboration with ministries.

The Council of Ministers expressed its support and called upon all ministers to coordinate with the Ministry of Finance and Economy as well as the Ministry of Planning.

In a press conference after the meeting, Prime Minister Barzani briefed the media on latest development in the region.

Regarding reports suggesting that US Special Envoy Brett McGurk urged postponement of the September 30th Kurdistan election, Prime Minister Barzani stated, “There is nothing like that. He hasn’t discussed this issue with us. What has been discussed is whether elections will be held or not. Yes, they will be held on time. No talk of postponing elections by Mr. Brett McGurk with us has happened. Up to the moment, no political party in Kurdistan Region has asked that the September 30th elections be postponed. If I speak as the KDP, we from the Kurdistan Democratic Party emphasize that elections need to be held at their scheduled time.”

About negotiations with Baghdad on various issues, Prime Minister Barzani said, “There are some principles important in negotiations with Baghdad. It is very important for the people of Kurdistan and for all parties to jointly participate in this process. Serious talks will begin after manual vote counting is concluded and the results are officially confirmed and announced by the Iraqi Federal Court.

Regarding trade between the Kurdistan Region and Islamic Republic of Iran after the sanctions were reimposed on Iran by the US Government, Prime Minister Barzani said, “Until now, the sanctions are not clear to us. But certainly, the Kurdistan Region will take steps within the framework and position of Iraq. We asked the US and talked with Baghdad to make it clear to us. We asked and await the US to send a delegation to explain what exactly should and should not be done.”

Regarding the Rosneft agreement and any tension with Baghdad, he said, “What we have done with Rosneft is a commercial matter. Our contracts are within the framework of the Iraqi Constitution.” He also said, “Now that Baghdad can’t practically export Kirkuk oil, which is about 250 to 300 thousand barrels per day, we have told them we are ready to facilitate export to Ceyhan port where Iraq’s State Oil Marketing Organization, SOMO, can sell the oil and, of course, all revenue will be for all Iraq.

(Source: KRG)

By John Lee.

The Al-Bayan Center for Planning and Studies has just published a new report from our Expert Blogger Ahmed Tabaqchali.

Entitled “Understanding Iraq’s debt: An overview of its status, outlook and origins“, the report argues that much of that debate about Iraq’s debt is out of context, mixes loosely related facts and figures and mostly comes without an understanding of the concept of debt or debt servicing costs or debt sustainability.

The paper’s aim is to provide an understanding of Iraq’s debt, its origins, developments, status and implications for the future in dealing with the challenge of reconstruction.

Read Ahmed Tabaqchali’s full report here in English, and here in Arabic.

By John Lee.

The Trade Bank of Iraq (TBI) has announced that it will open a branch in Saudi Arabia.

Faisal Al Haimus, Chairman of TBI said:

“This important addition to our bank accomplishments shall strengthen trading and banking relationships between the two countries.”

(Source: TBI)

Advertising Feature

By Veronica Cotdemiey, CEO of Citizenship Invest.

Obtaining a dual a nationality or second citizenship has long been a significant goal for many families in the Middle East.

The constant struggle of not being able to travel freely; being scrutinized by immigration and governmental entities; as well as being a citizen of countries with political and economic distress are the main drivers that encourage individuals to consider investing in a second nationality.

There are two main approaches for obtaining a second citizenship by investment. The first way is through Fast Citizenship programs which are prevalent in the Middle East as they provide the quickest route to owning a lawful second citizenship. Countries like St. Kitts & Nevis, Antigua & Barbuda, Grenada, Dominica, St. Lucia and Cyprus allow foreigners to financially contribute or invest in real estate to obtain a legal citizenship within a period of less than 6 months.

Furthermore, these countries’ citizenship legislative acts do not pose any relocation requirements, which means that the applicants and their families do not need to move to another country in order to obtain or keep the citizenship. The non-relocation requirement makes these programs highly popular among Middle Eastern businessowners and successful professionals. These programs have a strong effect in raising the country’s GDP but it can also culminate in long-term economic prosperity through investment in housing and infrastructure.

Some of these programs have existed for over 30 years and are sought-after by nationals from all over the world included Americans. From Middle East the key nationalities searching for these programs are Iraqis, Syrians, Yemenis, Lebanese and many more who are constantly faced with travel restrictions. An alternate passport opens up an entirely new world on visa-free travel including the UK, Schengen countries, Singapore, Malaysia, Russia, China, Hong Kong. Additionally, many nations in the Middle East face political and economic problems, which makes it difficult to predict the future of these nations, and their family futures along with them. Therefore, having a second citizenship or passport is a strong contingency plan for many individuals in the region.

Nevertheless, there is another option available for investors and it is through Residency programs. There are many countries around the world that grant applicants a permanent residency through investment. Let us take Spain as an example. Spain’s Golden Visa includes the main applicant, spouse, and all dependent children, after the applicant purchases a property in Spain. The duration of the Residence Permit in total is 5 years, Permanent Residence may then be applied for a further 5 years where you must reside in Spain to be eligible to apply for the citizenship. Residents may study, work and live indefinitely in Spain and travel visa-free within the European region. Best of all, they will own a European nationality, which consequently allows them to live anywhere in Europe and grants them visa-free access to over 170 countries worldwide.

Another example is Portugal, which is a member of the European Union and also has its own Residency program. Unlike Spain, this program does not require investors to physically live in Portugal to obtain the Portuguese citizenship. The country has a high quality of life with modern business and medical facilities, which makes Portugal a beautiful country with high standards of living. The citizenship will be granted to the applicant and family after a period of 6 years, therefore the entire family will benefit from being European nationals and will be able to pass the nationality to future generations through naturalization.

To make things simple, permanent residency programs are primarily for investors who plan to relocate to benefit from living in a European country and eventually becoming European citizens. However, it is the long route towards obtaining a second nationality and their citizenship is no 100% secure as it is up to the Government’s discretion.

Fast citizenship by investment programs on the other hand, pose different advantages. They are more suitable for individuals who do not wish to disrupt their current lives by immigrating to a different country, who do not want to wait 6 to 10 years and who are not willing to take a language test.

Click here for more information.

IBBC holds annual Cumberland Lodge Conference with Political, Academic, Education and Business Experts, 6-8 July

The Iraq Britain Business Council hosted its annual Cumberland Lodge Retreat on 6-8 July, inviting a host of political, business, academic and education experts to discuss the most pertinent issues relating to Iraq and its future.

The title of the conference was ‘Iraq: Domestic Expectations & Geopolitical Aspirations’ and addressed a variety of issues on regional politics, election diagnosis and the future of higher education in Iraq.

On Friday members and guests heard speeches from Baroness Nicholson of Winterbourne, President of IBBC and the Prime Minister’s Trade Envoy to Iraq, Dr Edmund Canon Newell, Principal of Cumberland Lodge, Mr Nazar Mirajan Mohammed, Minister Plenipotentiary Iraq Embassy and Sara Akbar, Founder Member of IBBC, Kuwait Government Adviser and CEO of new IBBC member OiLSERVE.

The conference also featured in-depth discussions with high level representatives from the Government of Iraq, including Dr Abdul Razzaq Al-Issa, Minister of Higher Education and Scientific Research, Dr Adbul Kariem Al Faisal, Chairman of the PM’s Advisory, Dr Dara Rasheed, Deputy Minister for Construction, Housing and Municipalities and Deputy Head of Refaato and Dr Salah Hadi Saleh Alhashim, DG for Scholarships at he Ministry of Higher Education and Scientific Research.

Agenda & Speakers

Session 1: Present Situation in Iraq

Chair: Baroness Nicholson of Winterbourne

Dr Barham Salih MP, Coalition for Democracy, Jon Wilks CMG (tbc), HM Ambassador to Iraq, Dr Renad Mansour, Research Fellow, Chatham House, Professor Toby Dodge, Director Middle East Centre, LSE

Session 2: Iraq in a Regional Perspective

Chair: Dr Renad Mansour, Research Fellow, Chatham House

Sara Akbar, CEO Oil Serve Kuwait

Session 3: China and Iraq

Chair: Botan Osman, Managing Director, Restrata

Raffaello Pantucci, Director of International Security Studies, RUSI

Session 4: IMF view on Iraq

Chair: Gavin Wishart, Board Member, IBBC

Gavin Gray, Mission Chief for Iraq, IMF

Session 5: Partnerships between British and Iraqi Universities

Chair: Dr Victoria Lindsay, Director British Council Iraq

Professor Obay Al Dewachi, President of Mosul University, Professor Nick Petford, Vice Chancellor, Northampton University, Professor Mohammed Al Uzri, Honorary Professor with Social and Epidemiological Psychiatry Research Group, Leicester University, Professor John Strachan, Vice Chancellor, Bath Spa University

On Saturday 7, an after dinner speech was given by Dr Mohammed Jasim, Library Director of Mosul University, who gave an impassioned presentation on the progress made in rebuilding the university’s dilapidated library.

IBBC would like thank the staff at Cumberland Lodge, all speakers and delegates who contributed to the extremely fruitful discussions, and to its members, with representatives attending from Al Burhan Group, Al Nukbha OFS, Bath Spa University, BP, Olive Group, Eversheds Sutherland, G4S, KBR, Menzies Aviation, Mosul University, Najaf Chamber of Commerce, OiLSERV, Penspen, Perkins+Will, Petrofac, Restrata, Serco, Shell, TurnKey LLC, University of Leicester, University of Northampton and Wood.

(Source: IBBC)

Gulf Keystone Petroleum Ltd., operator of the Shaikan Field in the Kurdistan Region of Iraq, has announced the successful completion of the private placement of a 5-year senior unsecured $100 million bond issue (the “New Notes”).

The New Notes will be issued at 100 percent of par and carry a 10 percent fixed semi-annual coupon. The bond placement received strong investor demand, both from existing and new investors across international markets and was oversubscribed.

The New Notes issue is expected to settle on or about 25 July 2018, subject to customary conditions precedent. An application will be made for the New Notes to be listed on an appropriate recognised exchange. The proceeds from the New Notes will be used to refinance all of Gulf Keystone’s existing $100 million Guaranteed Notes due 2021 (the “Existing Notes”).

With respect to the Existing Notes that have not tendered for exchange, the Company intends to exercise the option to redeem all of the Existing Notes then outstanding at par value according to the call option, expected to take place on 26 July 2018.

Jón Ferrier (pictured), Gulf Keystone’s Chief Executive Officer, said: 

Following our recent announcement of the resumption of investments at the Shaikan Field to increase production to 55,000 bopd, an increase by about 70% compared to current levels, this refinancing resets the Company’s capital structure that was put in place in conjunction with the restructuring in 2016. This is another positive milestone for the company and the Kurdistan Region of Iraq.

“We also look forward to updating the market on our plans to increase production to 75,000 bopd and up to 110,000 bopd in due course.

Sami Zouari, Gulf Keystone’s Chief Financial Officer, said:

“The refinancing confirms the substantial progress achieved by the Company. The New Notes considerably strengthen the Company’s financial capabilities as we embark on our next investment phases in the Shaikan field.”

(Source: GKP)

By John Lee.

There has been a steady increase in the market price of the Iraqi Dinar (IQD) versus the USD, according to an Iraq Business News Expert Blogger.

In his market report for the month of June, Ahmed Tabaqchali said the premium over the official exchange rate has fallen to 1.2 percent, the lowest point in a number of years, from just under 6 percent at the end of 2017 and 10 percent at the end of 2016.

FX spreads are one of many sources of revenues for the higher quality banks but constitute the bulk of earnings for the lower quality banks“, he adds.

Read Ahmed Tabaqchali’s full report here.

By John Lee.

The Financial Action Task Force (FATF) has congratulated Iraq for the significant progress made in addressing the strategic deficiencies in the areas of anti money laundering (AML) and countering the financing of terrorism (CFT) identified earlier by the FATF and included in its action plan.

Iraq will no longer be subject to the FATF’s monitoring under its on-going global AML/CFT compliance process, and will work with their FATF-Style Regional Bodies MENAFATF (Iraq) as it continues to further strengthen its AML/CFT regime.

(Source: FATF)

The International Finance Corporation (IFC), a member of the World Bank Group, is providing a financing package of $269 million to Zain Iraq, a leading mobile network operator, to help reconstruct the country’s telecom operations and spur economic growth.

IFC arranged a $269 million debt package including $100 million from IFC’s own account, and $169 million in mobilization.

The mobilized amount includes a B Loan from Arab Bank, a loan through the IFC Managed Co-Lending Portfolio Program, a new syndications platform that offers institutional investors the ability to passively participate in IFC’s future senior loan portfolio, and a parallel loan from DEG and Finnfund.

The financing will help Zain Iraq enhance the capacity and quality of its 3G network and expand coverage to unserved areas, as well as helping the company modernize its networks and customer service in northern Iraq.

“This financing from IFC and partners will help us strengthen our footprint, modernize infrastructure, and provide a better quality of service to our customers,” said Ali Al-Zahid, the CEO of Zain Iraq. “It will also enhance access to higher quality broadband, a key enabler of broad economic activity, for both consumers and businesses.”

Iraq is one of the least developed telecom markets in the Middle East region due to the fragile security situation, and mobile network operators have struggled to maintain their networks and have refrained from investing heavily in infrastructure.

“Supporting infrastructure development in Iraq is an essential building block of the reconstruction effort,” said Mouayed Makhlouf, IFC Regional Director for the Middle East and North Africa. “Restoring and enhancing broadband infrastructure can have a substantial multiplier effect on the economy through increased connectivity and reduced transaction costs, enhanced flows of information, and more efficient and effective matching of market players, among many other much needed benefits.”

By arranging and mobilizing a seven-year loan in a country where long-term financing options remain limited, IFC’s investment will support Zain Iraq’s growth plans, while sending a positive signal to domestic and international players at a critical point in the country’s recovery.

Zain Iraq has been an IFC partner since 2011, when IFC arranged a $400 million syndicated loan for the company. This included mobilization of $195 million from DEG, Proparco, FMO, and the Infrastructure Credit Facility.

(Source: IFC)