Live: Breakthrough in Kurdistan Region salary talks; CBI denies claims it withdrew private bank capital

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Sweden on security alert following Quran protests

Followers of Shia cleric Moqtada al-Sadr gather for Friday prayers as they protest against the act of Quran burning, in Baghdad.
Followers of Shia cleric Moqtada al-Sadr gather for Friday prayers as they protest against the act of Quran burning, in Baghdad.   credit: Murtadha Al-Sudani - AA
The Swedish government on Thursday ordered 15 government agencies to strengthen the country's ability to prevent terrorism, in response to a worsened security situation following protests involving desecration of the Quran. This comes following a statement by the country's PM warning that his country was being targeted by disinformation campaigns that seek to capitalise on the anger sparked by protests involving desecrations of the Quran.

Prime Minister Ulf Kristersson said in a Facebook post that "Sweden is right now the target of influence campaigns, supported by states and state-like actors, whose purpose is to harm Sweden and Swedish interests."

Kristersson said that the "burnings of copies of religious texts" coincide with a difficult "security policy situation. These events are then retold in an inaccurate way, sometimes with direct calls to hurt our country," he continued. While he did not name any countries, the Guardian cited Mikael Östlund, a spokesperson for Sweden’s Psychological Defence Agency – set up to fight disinformation – as saying Russia was using the Quran burnings as opportunities to promote its agenda in the media. "Obviously, one such ambition from Russia’s side is to be able to complicate our joining Nato," Östlund told the paper.  

In a separate statement, Minister for Civil Defence Carl-Oskar Bohlin also warned of an increased spread of disinformation against Sweden. "There is a risk that the current disinformation campaigns against Sweden could jeopardise the situation of Swedish citizens and companies abroad, and pose a threat to national security," Bohlin said.

Tensions have flared between Sweden and several Middle Eastern nations after an Iraqi refugee staged two protests in which he desecrated the Quran. In late June, Salwan Momika, 37, set pages of the Muslim holy text alight outside Stockholm's main mosque.

"Recent destructive events -- in particular various demonstrative burnings -- have increased the risks for Sweden," PM Kristersson said in a new statement posted to Instagram. "We have, according to the Swedish Security Service, gone from being what is called a legitimate target for terror attacks, to being a prioritised target," he continued, noting that the situation was "very serious."

As a result, 15 government agencies -- including Sweden's armed forces, several law enforcement agencies and the Swedish tax agency -- had been tasked with "intensifying their work" under the leadership of the security service.

Speaking at a press conference, Justice Minister Gunnar Strommer said the work would seek to strengthen Sweden's "ability to prevent, deter and impede terrorism and violent extremism."

Sweden's government has condemned the desecrations, while stressing the country's constitutionally protected freedoms of speech and assembly. This is the point that is missing in some media coverage of the protests. While the Swedish government disapproves the acts, the country's laws allow for them, hence tying the hands of Stockholm.

The recent events also followed a January protest where Swedish-Danish right-wing activist Rasmus Paludan burned a Quran to denounce Sweden's membership application to NATO and the negotiations with Turkey to allow Sweden to join the alliance.

Abandoning centuries of military non-alignment, Sweden decided to apply for NATO membership in the wake of Russia's invasion of Ukraine, but its membership is still awaiting ratification by Hungary and Turkey -- which has condemned the burnings.

Recent events have raised diplomatic tensions throughout the Middle East, with Swedish envoys summoned in Egypt, Algeria, Saudi Arabia, Jordan and the United Arab Emirates. Sweden's ambassador has been expelled from Iraq, while Iran said it would not allow a new Swedish ambassador into the country.
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The semi-official Iraqi News Agency (INA) has clarified the terms of the Erbil-Baghdad agreement, stating that Erbil is required to submit all non-oil revenues to Baghdad, as opposed to the previously reported 50% in Kurdish media. However, half of the revenues from Kurdistan's border customs and duties will be returned to Erbil.

Citing an anonymous source, INA reported that "The agreement stipulates that the regional government hand over all non-oil revenues, 100%, and deposit them in the account of the Ministry of Finance at the Central Bank in accordance with the Financial Management Law."

"The Federal Ministry of Finance then provides 50% of the border crossing revenues back to the [Kurdistan] Region, similar to other Iraqi provinces that have border crossings...according to article 21/second of the budget law."

The budget law places Kurdistan in an unusual position. While it possesses tax-raising powers, like many devolved administrations across the world, it must relinquish the revenues earned from those taxes to the Iraqi government. These revenues are then deducted from Kurdistan's budget share, surely creating disincentives to the KRG maintaining any non-federal taxes at all.
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Baghdad to sent payment for Kurdistan salaries next week – Rudaw

Rudaw, citing a source present at the meeting between the KRG delegation and federal officials, reports that Baghdad will send 906 billion IQD (around $700m at the official exchange rate) for Kurdistan Region public sector salaries.
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The Association of the Petroleum Industry of Kurdistan (Apikur) has urged all stakeholders to intensify efforts for a timely resolution, ahead of Turkish President Erdogan's highly anticipated visit to Baghdad. 

In a statement released Tuesday, Apikur member companies, which include..

  • DNO
  • Genel Energy
  • Gulf Keystone Petroleum
  • HKN Energy
  • ShaMaran Petroleum

...indicated the ongoing closure of the Iraq-Turkey pipeline is significantly affecting foreign investment in Kurdistan. They warned that continued closure could put thousands of jobs in the region at risk. 

These companies have reportedly reduced their 2023 spending plans in the Kurdistan Region by approximately $400m, with spending plans for 2024 currently under review. 

The statement marks four months since the closure of the Iraq-Turkey pipeline on March 25.

Full statement

"The Association of the Petroleum Industry of Kurdistan (‘APIKUR’) notes that today marks four months since the closure of the Iraq-Turkey pipeline ('ITP'). The ongoing closure is having a significant impact on foreign investment in Kurdistan, and a prolonged closure threatens thousands of jobs in the region.

 

To date, APIKUR member companies, which include DNO, Genel Energy, Gulf Keystone Petroleum, HKN Energy and ShaMaran Petroleum, have reduced spending plans in the region by some $400 million in 2023, with 2024 spending plans under review.

 

With no certainty on when the ITP will reopen, or when payments for exports will then resume, our Member companies have already had to take steps to cut costs, which have resulted in hundreds of personnel layoffs.

 

The oil industry in Kurdistan generated over 80% of the revenue for the Kurdistan Region’s economy in 2022. Should the pipeline outage continue, foreign investment will be further reduced, which in turn will put at risk further jobs and the ability for the industry to deliver the 400,000 barrels of oil per day required under the 2023-2025 Federal Budget Law.

 

APIKUR continues to believe that a speedy reopening of the ITP for oil exports and a clear repayment and cost recovery plan that is consistent with existing contracts are necessary for the resumption of oil production and in the best interest of Iraq as a whole and the Kurdistan region, as well as our Member companies. APIKUR appeals to all stakeholders to redouble their efforts for a timely resolution."

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Kurdistan Region president to hold meetings with parties, aiming to end election deadlock


The spokesperson for the president of the Kurdistan Region has announced plans for a series of meetings with political parties to establish a date for the postponed parliamentary elections in the Kurdistan Region. Dilshad Shahab noted that the presidency has received positive feedback from parties regarding the scheduling talks.

The Iraqi Higher Electoral Commission (IHEC) previously stated that it could facilitate the elections as early as Feb. 18, 2024. Or, with six months notice at any given time. 

These plans come in response to increasing pressure from Western allies for Kurdistan Region political parties to resolve ongoing disputes, particularly between the KDP and the PUK, and move forward with the long-overdue elections initially set for November.
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Police arrest Kirkuk man accused of keeping daughter chained


Police in Kirkuk have arrested a man accused of keeping his 33-year-old daughter confined to a house for three weeks. The police chief of Kirkuk, Kawa Gharib, told NRT Kurdish that the woman was found chained at the time of her rescue. The police released troubling photos of the woman in foot chains. 

In Iraq, an estimated 1.32 million individuals are at risk of various forms of gender-based violence (GBV), with over 75% being women and girls in their teens. Domestic violence accounts for 77% of reported GBV incidents. According to a recent World Health Organization report on global violence against women, the rate of lifetime intimate partner violence among ever-married or partnered women aged 15-49 in Iraq is 26%.
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Bloomberg on the upcoming Erdogan visit


Bloomberg is now confirming the reports from last week that Turkish President Recep Tayyip Erdogan is visiting Iraq, where he is expected to discuss the restart of an oil pipeline that has been inactive since March, according to an adviser to the Iraqi prime minister. 
The pipeline, with a capacity to transport about 500,000 barrels of oil per day from Iraq's Kurdistan region to Turkey's Ceyhan port, is crucial amid signs of tightening demand-supply balances driving up oil prices. 

Earlier this year, an arbitration court asked Turkey to pay about $1.5 billion in damages to Iraq for transporting oil without Baghdad's approval, a settlement Ankara seeks to negotiate before reopening the pipeline. The KRG and Iraq have lost billions of dollars in oil revenue since the closure. 

Erdogan's visit will also include discussions on water flows and Turkey's involvement in a major road development project in Iraq, said Farhad Alaaldin, foreign affairs adviser to the Iraqi prime minister.
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And here's the statement by the CJTFOIR 


At approximately 12:15PM, Coalition service members conducting a routine helicopter training mission experienced an in-flight mishap near Erbil, Iraq, July 27, 2023.

There were no Coalition casualties nor damage to Coalition or civilian infrastructure. The Coalition aircraft was damaged.
Coalition service members worked with the Government of Iraq to secure the site and ensure safety for the civilian populace.

An assessment of the situation is ongoing.

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Coalition military helicopter crashed in Gwer due to technical failure, says Peshmerga commander


Peshmerga commander Sirwan Barzani confirmed a US-led Coalition military helicopter suffered a technical failure, leading to a crash in the Qalata Sor village in Gwer, west of Erbil.
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Suspect in notorious 2014 IS massacre of cadets arrested in Iraq


Iraqi authorities have announced the arrest of a suspect linked to the infamous 2014 massacre of nearly 1,700 captive cadets by the Islamic State group, a crime that shocked the world.

The Sunni extremists of IS took control of Camp Speicher, an air force academy training thousands of cadets, where they singled out and executed the Shiite and Christian cadets before disposing of their bodies in mass graves or the Tigris River nearby.

Authorities identified the suspect as Abdelkhalek Khazaal Soltan, arrested in a joint effort by the federal intelligence services and counter-terrorism police in Sulaymaniyah, Kurdistan Region's second city.

Interior ministry spokesman General Saad Maan claimed that Soltan, who joined IS in 2013, "participated in multiple operations targeting the security forces... and was a perpetrator in the Camp Speicher massacre".

The gruesome massacre prompted global outrage, encouraging thousands of Shiite volunteers to join the battle against the jihadists. Their efforts eventually led to a victory declaration in December 2017.

In 2021, a UN report to the Security Council determined that the murder of the "predominantly Shia unarmed air cadets" and their instructors constituted "war crimes of murder, torture, cruel treatment and outrages upon personal dignity". The report further stated that a video released by IS in July 2015 displaying the killings was a "direct and public incitement to commit genocide against Shia Muslims".

Iraqi courts have imposed death sentences on numerous individuals convicted of involvement in the massacre. In January, 14 people received death sentences for their roles in the mass killing. In 2016, Iraq executed 36 men convicted for participating in the massacre.

AFP
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Oil futures, contracts agreeing to buy oil at a preset price in the future, are surging towards three-month highs, a welcome development for Iraq, a nation heavily dependent on oil revenues. 

According to Market Watch, this rise is due to expected global supply constraints and positive economic forecasts. September Brent crude, the global benchmark, rose by 51 cents, or 0.6%, to $83.43 a barrel, while October Brent, the most active contract, increased by 49 cents, or 0.6%, to $83.05 a barrel. 

These oil futures indicate investors' predictions of increasing oil prices, a potential financial windfall for oil-reliant Iraq.
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Speicher Massacre suspect arrested


In a joint operation, the Counter-Terrorism General Directorate of the Patriotic Union of Kurdistan (PUK) and the Iraqi National Intelligence Agency (INC) have apprehended Abdulkhaliq Khazal Sultan, a significant suspect in the 2014 Speicher Massacre, according to PUK Media. 

Sultan is accused of involvement in numerous terrorist activities against security forces in the Salahaddin province, but his most notorious crime is his suspected participation in the Speicher Massacre. This horrific event saw approximately 1,700 Iraqi Air Force cadets massacred at Camp Speicher, a former U.S. base near Tikrit, marking one of the deadliest attacks by IS. 

Post massacre, Sultan reportedly rose to lead the military bureau of the Tigris province, subsequently transferring to Nineveh province. The report didn't specify the time and location of Sultan's arrest.
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Sanctioned banks express readiness for audits


Reuters has a new piece up that reports on the situation of fourteen Iraqi private banks recently sanctioned by the United States for allegedly aiding in the illicit transfer of US dollars to Iran. These banks are now prepared to challenge the sanctions and face audits, and they are requesting support from Iraqi authorities.

Last week, US financial authorities prohibited these banks from conducting dollar transactions as part of a wider effort to prevent dollar smuggling to Iran via the Iraqi banking system, according to officials at the Iraqi central bank. The US Treasury Department and the New York Fed have not responded to requests for comment on the matter.

Ali Al-Allaq, the Iraqi central bank's Governor, stated on Wednesday that the sanctioned banks only accounted for 8% of external transfers, suggesting other banks could handle the market's dollar transaction needs.

However, the sanctions have drawn concerns about their impact on the Iraqi currency and foreign investments. Haider Al-Shamma, speaking on behalf of the sanctioned banks, warned that the sanctions could further depreciate Iraq's currency, which has already declined from under 1,500 dinars per US dollar last week to 1,580 as of Wednesday.

Shamma also emphasized that the sanctions, which now affect nearly a third of Iraq's 72 banks, could significantly impact foreign investments and insisted that the banks are independent financial institutions, separate from political entities.
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Here are the five parts of the agreement, according to Draw


The agreement was reportedly signed in the presence of Iraqi Foreign Minister Fuad HusseinKazim Hassan, the prime minister's advisor for economic affairs, and Umed Sabah. 

  1. The KRG is obligated to pay international oil companies operating in the KRI based on the price of Iraqi oil produced by the Iraqi Oil Ministry.
  2. The KRG would deposit the non-oil revenues into a bank account in the Iraqi finance ministry.
  3. The Iraqi Ministry of Finance will return 50 percent of revenues from border crossings to the Kurdistan Region, following the handover of non-oil revenues.
  4. A joint committee will be formed to investigate non-oil revenues. This committee will determine how much of these revenues should be returned to the Iraqi treasury and how much should go back to the KRI.
  5. Once the region has complied with the above points, the Iraqi Ministry of Finance will fund the region under the 2023 budget law, on the condition that the region continues to uphold these points.
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It isn't just fake news the CBI is worried about


Its reputation –rightly or wrongly – has been taking a pounding in the public sphere recently, with it being unable to shake the perception that it cannot get a hold of a dinar crisis that sees it shed value against the dollar by the hour on some days.

Now the former Iraqi finance minister, Hoshyar Zebari (KDP) has chimed in. Doesn't make for great reading if you're at CBI HQ.
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New MoU seeks to boost research-driven business development

Signing ceremony
Signing ceremony   credit: KAPITA
The Kurdistan Regional Government Board of Investment (KRG-BOI) and KAPITA Business Hub announced on Thursday, July 20, 2023, that they have signed a deal to collaborate on research-driven business development and investment initiatives in the Kurdistan region.

The KRG-BOI, established in 2006 to diversify the Kurdistan region's economy beyond oil, and KAPITA, a private sector development company dedicated to empowering small and medium-sized enterprises, plan to combine their resources and expertise to stimulate business growth and attract further investment to the region.

This partnership, facilitated by the Information and Communications Technology – Prospects for a Modern Youth in Iraq (ICT) project from Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, will focus on joint research, industry insights, and the hosting of joint events and conferences. The overarching aim is to foster connections between projects and potential investors and create a vibrant and dynamic business environment in the region.

"Through our Invest Kurdistan initiative, KRG-BOI is thrilled to join forces with KAPITA," said Dr. Mohamad Shukri Malapir, the chairman of KRG-BOI. He emphasized that their shared focus on investment promotion and extensive research publications underscores a commitment to nurturing economic growth in the region.

Similarly, Mujahed Waisi, the Founder and CEO of KAPITA Business Hub, expressed his belief that the MoU symbolizes their dedication to enhancing the private sector in the region, and he sees their collaborative research efforts as a significant contribution to a more vibrant, knowledge-driven business environment.

KAPITA is a company that aids small businesses in Iraq by offering them financial support, business advice, and a nurturing environment to turn their ideas into successful operations.

The collaboration is set to commence immediately and continue until July 2024, with the possibility of extension.
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CBI rejects claims it withdrew private capital


The Central bank of Iraq has rejected claims made by some media outlets last night that it withdrew capital from accounts owned by private banks. 

In a statement, the bank said: "Those reports that refer to the Central Bank withdrawing funds owned by private banks are false."

The CBI calls on media outlets to act responsibly and refer to official sources for announcements.
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Kurdistan 24 is gloating again


Translation of tweet: 

"This statement by Masrour Barzani is prescient today: 'Those who don't stand with us today should not declare themselves partners in, or benefit from, our achievements tomorrow.'"

Coincidentally, Kurdistan 24 is widely reported to be owned by Prime Minister Masrour Barzani himself.

Not sure how going cap-in-hand to Baghdad to ask for a month's worth of salaries can be spun as an achievement but there you go.
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Umed Sabah, president of the Diwan of Council of Ministers and KDP Central Committee member, says that the KRG delegation to Baghdad has come back with a pledge by Iraqi counterparts to send money for salary payments of KRG employees.

With no oil exports via Turkey in months, the KRG has no way to pay its gargantuan public sector wage bill. The passage of a contentious federal budget law was seen as a way out of the constant fiscal cliff edge for Kurdistan, but even that has failed to give employees in the Kurdistan Region respite from chronic delays and cuts to salaries.

The KRG has in recent days blamed Baghdad for the salary delays, claiming it had held up its side of the bargain reached with the federal government to hand over much control it had over Kurdistan oil production and exports in return for its share of the federal budget.
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Morning briefing


Morning! Good news overnight for Kurdistan public sector workers waiting for long-overdue salaries. Or, ostensibly good news, anyway. We've heard this tune before.

Here's the headline stories to start your day

  • The Kurdistan Regional Government (KRG) delegation dispatched to Baghdad last night has claimed a breakthrough in talks aimed at unblocking disbursements by Baghdad to pay civil service and public sector salaries in the Kurdistan Region.
  • The Central Bank of Iraq (CBI) has had to deny reports it withdrew the capital of private banks as the country reels from a fresh dinar crisis.
  • The CBI has blamed 'black market trading' of dollars for the devaluation of the local currency against the greenback.
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