By John Lee.

The economic agreements signed between Kuwait and Iraq have recently raised concerns among Iraqi experts, who warned against “political courtesy” at the expense of the country’s interests in relation to the proposed free trade zone on the border between the Iraqi city of Basra and Kuwait.

A member of the Council of Basra, Mohamed Al-Fatlawi, expressed reservations about the idea of ​​establishing a free trade zone between Iraq and Kuwait, insisting his opposition stemmed “from the simple reason that it will negatively affect the Iraqi Port of Al-Faw, which is being constructed on the waters of the Arabian Gulf”.

He explained that “the goods imported by Iraq from Kuwait are two hundred times more than those exported by Iraq to Kuwait”.

The presence of a free economic zone means that the port is no longer useful,” Al-Fatlawi lamented, adding that: “The ships come to Mubarak Al-Kabeer Port in Kuwait and are unloaded there, but arrive at the free zone without paying any fees. So, it will be cheaper than coming through Al-Faw Port where tariffs are imposed.

Jamal Al-Mohammadawi, a member of the Oil and Energy Committee, also said that the free zone could have a negative impact on the Port of Al-Faw. “We will recommend that the government take this issue into account, so that there won’t be any agreements at the expense of trade and import from Iraqi ports,” the New Arab reported Al-Mohammadawi as saying yesterday.”

The committee member added:

“This year an amount of $400 million has been allocated from the budget to complete the Port of Al-Faw, and if the issue of the free zone is not dealt with, the ships and boats will come to the Kuwaiti port of Mubarak and take the corridor through Kuwait to the market or free zone directly, without the need to complete their way and reach the Iraqi Port of Al-Faw.”

(Source: Middle East Monitor)

The Cabinet held its regular weekly meeting in Baghdad on Tuesday under the chairmanship of Prime Minister Mr. Adil Abd Al-Mahdi. It approved:

  • the recommendation of the Ministerial Energy Council on the service contract for Al-Mansuriyah oil field in Diyala province;
  • a draft law on public-private partnership to strengthen cooperation between government agencies and the private sector;
  • the draft agreement between the Republic of Iraq and the Kingdom of Saudi Arabia on the avoidance of double taxation and the prevention of tax evasion’
  • measures to meet the requirements of elections to provincial councils outside the Kurdistan Region of Iraq;
  • recommendations for development of the Safwan border crossing between Iraq and Kuwait in Basra province.

(Source: Govt of Iraq)

On Tuesday, the United Nations Compensation Commission (UNCC) made available $270 million to the Governmentof the State of Kuwait towards the Commission’s remaining claim with an outstanding award balance.

The United Nations Compensation Commission was established in 1991 in accordance with Security Council resolutions 687 (1991) and 692 (1991) to process claims and pay compensation for losses and damages incurred by individuals, corporations, Governments and international organizations as a direct result of Iraq’s invasion and occupation of Kuwait (2 August 1990 to 2 March 1991).

The Commission received approximately 2.7 million claims and concluded its review of all claims in 2005.

Approximately $52.4 billionwas awarded to over 100 Governments and international organizationsfor distribution to 1.5 million claims in all claim categories.

Successful claims are paid from the United Nations Compensation Fund which receives a percentage of the proceeds generated by the export sales of Iraqi petroleum and petroleum products.

This amount was previously set at five per cent under Security Council resolution 1483 (2003), and reaffirmed in subsequent resolutions.

Pursuant to Governing Council decision 276 adopted in November 2017, the percentage was set at0.5 per cent for2018 and increased to 1.5 per cent in 2019.

This amount will increase to 3 per cent beginning in 2020 and remain at that level until such time as the outstanding compensation has beenpaid in full. Payments are made on a quarterly basis utilizing all available funds in the Compensation Fundunder Governing Council decision 267 (2009).

With today’s payment, the Commission has paid out $48.7 billion, leaving approximately $3.7 billion to be paid to the only claim with an outstanding award balance. This category E claim was submitted by the Government of the State of Kuwait on behalf of the Kuwait Petroleum Corporation and awarded $14.7 billion in 2000 for oil production and sales losses as a result of damages to Kuwait’s oil field assets.

It represents the largest award by the Commission.

(Source: UNCC)

Five years on from ISIL ‘caliphate’ proclamation in Iraq, Security Council makes first-ever visit

The UN Security Council has concluded a first-ever visit to Iraq on Saturday, five years on from the proclamation, by the ISIL terrorist group, of a “caliphate” in the country.

The visit, which also took in a trip to Kuwait, saw the members meet senior government, UN and humanitarian officials to discuss the development of Iraq, the humanitarian situation, and the ongoing security challenges faced by the Government.

Council members noted that the visit underscored their support for Iraq’s continued post-conflict recovery, and reconciliation efforts to meet the needs of all Iraqis, and emphasized the importance of the sovereignty and security of Iraq.

They also addressed the importance of funding the recovery, in meetings with World Bank representative Ghassan Khoja, which covered the effective follow-up of international pledges, including those made at the 2018 Kuwait International Conference for the Reconstruction of Iraq.

Effective government and corruption issues raised

Recent political developments in Iraq, including progress towards the full formation of the Government, were welcomed by the Security Council members, who recognized the importance of an administration that upholds the values of the country’s constitution, responding to the needs of all Iraqis, including women, youth, children, displaced persons, and persons belonging to all ethnic and religious groups.

The engagement of the national Government in resolving outstanding issues with the Kurdish Regional Government, was also singled out for praise by the members, and the issue of corruption was raised, particularly efforts towards implementing the 2018-2022 National Government program, which includes addressing corruption, and strengthening viable state institutions.

Humanitarian and security concerns

The humanitarian situation, including the delivery of basic services, remains challenging in Iraq, and the members underscored the importance of all persons internally displaced by conflict, including in areas liberated from ISIL. The need for economic reform, investment, and regional economic integration to better address the aspirations and concerns of the Iraqi people, was also noted.

Support for the UN Assistance Mission for IRAQ (UNAMI) mandate to support and assist the Government of Iraq to promote inclusive political dialogue; national, regional and community-level reconciliation and cooperation; and security and justice reform, was reaffirmed by the Security Council representatives. They also commended the Government of Iraq’s efforts, in association with local and regional authorities, to counter terrorism and encouraged them to further their coordination.

A UN investigative team set up to hold ISIL accountable for war crimes, crimes against humanity, and genocide, must remain independent and impartial, ensure its Iraqi members benefit from international expertise on the team, and make every effort to share knowledge and technical assistance with Iraq, the members insisted.

They added that the team, UNITAD – the UN Investigative Team to Promote Accountability for Crimes Committed by Da’esh/ISIL – must operate with full respect for the sovereignty of Iraq and its jurisdiction over crimes committed in its territory.

(Sources: UN, Iraq Ministry of Foreign Affairs)

By John Lee.

Kuwait will reportedly fund the reconstruction of a major border crossing with Iraq.

According to Anadolu Agency, Iraq’s Border Crossing Authority said a memorandum of understanding (MoU) has been signed between the two countries to prepare the infrastructure for the crossing at Safwan.

(Source: Anadolu Agency)

By John Lee.

Kuwait’s Qualitynet is reported to have been granted a licence to provide internet, telecommunications and satellite services in Iraq.

According to CommsMEA, the move makes it the first Kuwaiti telecommunications service provider to win a service licence in the country.

Said Qualitynet CEO Mohammed Nizar Al-Nusif is quoted as saying:

Winning this licence comes after an extensive study of the needs of the Iraqi market, the estimation of investment volumes and feasibility studies for the establishment of infrastructure, and will complement our strategic plan for regional and international expansion.

“Our experts are currently working on deploying the network and infrastructure to provide our services to our customer base across Iraq, and to provide the network with point-of-presence devices through Qualitynet Iraq, for which it was officially established.

(Source: CommsMEA)

(Picture credit: Tasnim, under Creative Commons licence)

Kuwait Energy has announces that the Royal Court of Jersey has approved the acquisition of the company by Gold Cheers Corporation Limited, a wholly-owned subsidiary of United Energy Group Limited (UEG), by means of a scheme of arrangement.

The consideration to be paid under the transaction will be US$477,248,630.20 which equates to a per share price of US$1.46400797821.

Completion of the acquisition remains subject to delivery of the Act of Court sanctioning the Scheme to the Registrar of Companies in Jersey. This is expected to occur on or before 22 March 2019 (the “Effective Date”), at which time the Scheme will become effective.

Payments to shareholders should be dispatched within 14 days of the Effective Date, as detailed in the scheme document dated 15 November 2018 relating to the Scheme.

In Iraq, Kuwait Energy has interests in the Mansuriya, Siba, and Block 9 fields.

(Source: Kuwait Energy)

Kuwait Energy has announces that the Royal Court of Jersey has approved the acquisition of the company by Gold Cheers Corporation Limited, a wholly-owned subsidiary of United Energy Group Limited (UEG), by means of a scheme of arrangement.

The consideration to be paid under the transaction will be US$477,248,630.20 which equates to a per share price of US$1.46400797821.

Completion of the acquisition remains subject to delivery of the Act of Court sanctioning the Scheme to the Registrar of Companies in Jersey. This is expected to occur on or before 22 March 2019 (the “Effective Date”), at which time the Scheme will become effective.

Payments to shareholders should be dispatched within 14 days of the Effective Date, as detailed in the scheme document dated 15 November 2018 relating to the Scheme.

In Iraq, Kuwait Energy has interests in the Mansuriya, Siba, and Block 9 fields.

(Source: Kuwait Energy)

By John Lee.

Kuwait is reportedly planning to build towns close to the Iraqi border, and talking with Iraqi authorities to develop a “free zone” between the two countries.

According to Kuna, First Deputy Prime Minister and Minister of Defence Sheikh Nasser Sabah Al Ahmad Al Sabah (pictured) said the plan was currently “the preoccupation and focal task” of the government and the Supreme Planning Council.

He added that Kuwait’s planned Madinat Al Harir (Silk City) is expected to attract between $400- and $650-billion in investment over 25 years.

(Source: Kuna)

A former business partner of a U.S. military contractor was sentenced today to 18 months in prison for his role in a years-long scheme to bribe U.S. Army contracting officials stationed at a U.S. military base in Kuwait during the Iraq War.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Matthew J. DeSarno of the FBI’s Washington Field Office’s Criminal Division, Director Frank Robey of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit and Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office made the announcement.

Finbar Charles, 62, a citizen of Saint Lucia most recently residing in Baguio City, Philippines, was sentenced by Chief U.S. District Judge Karon O. Bowdre of the Northern District of Alabama.  Chief Judge Bowdre also ordered Charles to forfeit $228,558 in illicit gains.  Charles pleaded guilty in July 2018 to one count of bribery of a federal official.

According to admissions made in connection with his guilty plea, Charles was a business partner of a former U.S. military contractor, Terry Hall.  As Hall’s business partner, Charles admitted that he facilitated Hall and others in providing millions of dollars in bribes in approximately 2005 to 2007 to various U.S. Army officials in exchange for preferential treatment for Hall’s companies in connection with Department of Defense (DOD) contracts to deliver bottled water and construct security fencing to support U.S. troops stationed in Kuwait and Iraq.

As part of his role in this criminal conspiracy, Charles admitted that he managed bank accounts in Kuwait and the Philippines that he used to receive Department of Defense payments and transfer illegal bribes to various U.S. Army contracting officials, including Majors Eddie Pressley, James Momon, and Chris Murray.

All of those individuals, as well as at least 10 other coconspirators, have pleaded guilty or been convicted of crimes relating to this scheme.  Charles admitted that he falsified loan and consulting agreements to conceal the true nature of the bribe payments to the Army officers, and that he personally received over $228,000 in illicit gains as a result of his participation.

This case was investigated by the DCIS, the U.S. Army Criminal Investigation Command, the FBI and the Special Inspector General for Iraq Reconstruction.  The Criminal Division’s Office of International Affairs provided substantial assistance in this matter.  The case was prosecuted by Trial Attorneys Peter N. Halpern and Robert J. Heberle of the Criminal Division’s Public Integrity Section.

(Source: US Dept of Justice)