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IMF Executive Board Reviews Iraq Misreporting, Remedial Steps


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IMF Executive Board Reviews Iraq Misreporting, Remedial Steps

 

March 4, 2021

Washington, DC: The Executive Board of the International Monetary Fund (IMF) has reviewed a non-complying purchase by Iraq of SDR 584.2 million following the completion of the second review under the 36-month Stand-By Arrangement (SBA) on August 1, 2017. The SBA was approved on July 6, 2016 for a total amount of SDR 3.831 billion (230 percent of quota) and expired on July 7, 2019.

 

At the time of the second program review under the SBA, the authorities requested a waiver of applicability for end-June 2017 performance criteria (PCs) on public debt and the non-oil primary balance, information on which was not available. The waiver of applicability was granted on the condition that the information provided on Iraq’s performance under these criteria at end-December 2016 was accurate.

 

The non-complying disbursement arose as a result of nonobservance of the condition of accuracy for the waivers of applicability of the PCs on public debt and the non-oil primary balance granted by the IMF Executive Board at the time of the second review under the SBA. After the completion of the second review, it was revealed that the end-2016 government-guaranteed debt was under-reported by 1.3 percent of GDP while the non-oil primary fiscal balance was over-reported by 0.1 percent of GDP.

 

The authorities have closely collaborated with IMF staff to remedy the situation and strengthen their control of government guarantees. Specifically, they undertook a detailed exercise to verify the end-2016 stock of government guarantees certified by a decision of the Council of Ministers. In 2019, the authorities enacted a new Public Financial Management (PFM) law, which requires all government guarantees to be approved by Parliament as part of the annual budget process. Furthermore, Iraq’s Council of Ministers approved a sound regulatory framework for vetting and issuance of government guarantees which, among other things, envisages establishing a database of government guarantees and reconstituting a Guarantee Committee as the primary body responsible for vetting government guarantees. The complexity of these measures and the political events in Iraq explain the time required to bring this case to a conclusion.

In view of the authorities’ corrective measures, the Executive Board granted waivers of nonobservance of the condition of accuracy of the information reported on the end-2016 PCs on public debt and the non-oil primary balance.

 

The Executive Board also found that the inaccurate reporting on the observance of the end-2016 PCs gave rise to Iraq’s breach of its obligations under Article VIII, Section 5, of the IMF’s Articles of Agreement, which requires member countries to furnish such information as the Fund deems necessary for its activities, including information that is necessary to assess observance of PCs. In view of the corrective measures implemented by Iraq, the Executive Board decided not to require any further remedial action in connection with the breach of obligations under Article VIII, Section 5.

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“The Executive Board also found that the inaccurate reporting on the observance of the end-2016 PCs gave rise to Iraq’s breach of its obligations under Article VIII, Section 5, of the IMF’s Articles of Agreement, which requires member countries to furnish such information as the Fund deems necessary for its activities, including information that is necessary to assess observance of PCs. In view of the corrective measures implemented by Iraq, the Executive Board decided not to require any further remedial action in connection with the breach of obligations under Article VIII, Section 5.”

 

Go Iraq

Go Art VIII

Go international 

Go RV 

Go 2021

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3 hours ago, Laid Back said:

“The Executive Board also found that the inaccurate reporting on the observance of the end-2016 PCs gave rise to Iraq’s breach of its obligations under Article VIII, Section 5, of the IMF’s Articles of Agreement, which requires member countries to furnish such information as the Fund deems necessary for its activities, including information that is necessary to assess observance of PCs. In view of the corrective measures implemented by Iraq, the Executive Board decided not to require any further remedial action in connection with the breach of obligations under Article VIII, Section 5.”

 

Go Iraq

Go Art VIII

Go international 

Go RV 

Go 2021

Laid Back, if they are actually in article v111 does that mean the currency is now international ?

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14 hours ago, Laid Back said:

“The Executive Board also found that the inaccurate reporting on the observance of the end-2016 PCs gave rise to Iraq’s breach of its obligations under Article VIII, Section 5, of the IMF’s Articles of Agreement, which requires member countries to furnish such information as the Fund deems necessary for its activities, including information that is necessary to assess observance of PCs. In view of the corrective measures implemented by Iraq, the Executive Board decided not to require any further remedial action in connection with the breach of obligations under Article VIII, Section 5.”

How many articles totally do you think they have? And which article talks and mentions directly about the iraqi currency?

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2 minutes ago, Half Crazy Runner said:

Soooooo many questions 🤪

 

Article VIII... Article XIV ... I’m lost  :confused2:


Me too .... the world revolves around just enough corrupt ( at times incredibly excessive) Bureaucratic gobbledyguk  &  :bs: to keep ( in their mind set ) it all running just dandy. 
 

The truth is what they say it is, isn’t or muddy the waters so effectively that - wait for it ..... time to form a committee to study the issues. And pretty much we’ve seen how effective that’s been with governments the world over. 

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1 hour ago, rvmydinar said:

How many articles totally do you think they have? And which article talks and mentions directly about the iraqi currency?

 

Here is the IMF website address: www.imf.org

 

You can find answers to your questions there.  We would appreciate whatever you find out, so please share after your investigation just as many do after they put out the effort to educate themselves.

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2 minutes ago, Carrello said:

 

Here is the IMF website address: www.imf.org

 

You can find answers to your questions there.  We would appreciate whatever you find out, so please share after your investigation just as many do after they put out the effort to educate themselves.

Again, Thanks carrelo. You have been very helpful. But since someone doesn't like me to ask so many questions, then it is better for me to keep quiet ( and no more comments at all ) and read the article only.

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1 hour ago, rvmydinar said:

Again, Thanks carrelo. You have been very helpful. But since someone doesn't like me to ask so many questions, then it is better for me to keep quiet ( and no more comments at all ) and read the article only.

 

We are all here to get to get information. If you have a question and can provide the answer, many would really appreciate any info you can provide. You might just be a hero! 

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14 hours ago, Shelley said:

Laid Back, if they are actually in article v111 does that mean the currency is now international ?

 

2 hours ago, rvmydinar said:

How many articles totally do you think they have? And which article talks and mentions directly about the iraqi currency?


I searched the IMF site for Article VIII, Section 5. I found is related to Exchange rate policy Surveillance.

Hope this help.!

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1 hour ago, rvmydinar said:

Thanks a lot. From now on, i will try to keep quiet and no more comments at all and read the article only.

I wasn’t talking about you, I meant after reading the article I was totally confused. Confusing article compounded by a translation... I just don’t know where they stand at this point. 

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6 hours ago, Laid Back said:

 


I searched the IMF site for Article VIII, Section 5. I found is related to Exchange rate policy Surveillance.

Hope this help.!

 
 
Capítu
Article VIII General Obligations of Members
Autor(es):
International Monetary Fund
Fecha de publicación:
September 2011
 
 

Section 1. Introduction

In addition to the obligations assumed under other articles of this Agreement, each member undertakes the obligations set out in this Article.

Section 2. Avoidance of restrictions on current payments

(a) Subject to the provisions of Article VII, Section 3(b) and Article XIV, Section 2, no member shall, without the approval of the Fund, impose restrictions on the making of payments and transfers for current international transactions.

(b) Exchange contracts which involve the currency of any member and which are contrary to the exchange control regulations of that member maintained or imposed consistently with this Agreement shall be unenforceable in the territories of any member. In addition, members may, by mutual accord, cooperate in measures for the purpose of making the exchange control regulations of either member more effective, provided that such measures and regulations are consistent with this Agreement.

Section 3. Avoidance of discriminatory currency practices

No member shall engage in, or permit any of its fiscal agencies referred to in Article V, Section 1 to engage in, any discriminatory currency arrangements or multiple currency practices, whether within or outside margins under Article IV or prescribed by or under Schedule C, except as authorized under this Agreement or approved by the Fund. If such arrangements and practices are engaged in at the date when this Agreement enters into force, the member concerned shall consult with the Fund as to their progressive removal unless they are maintained or imposed under Article XIV, Section 2, in which case the provisions of Section 3 of that Article shall apply.

Section 4. Convertibility of foreign-held balances

(a) Each member shall buy balances of its currency held by another member if the latter, in requesting the purchase, represents:

  • (i) that the balances to be bought have been recently acquired as a result of current transactions; or
  • (ii) that their conversion is needed for making payments for current transactions.

The buying member shall have the option to pay either in special drawing rights, subject to Article XIX, Section 4, or in the currency of the member making the request.

(b) The obligation in (a) above shall not apply when:

  • (i) the convertibility of the balances has been restricted consistently with Section 2 of this Article or Article VI, Section 3;
  • (ii) the balances have accumulated as a result of transactions effected before the removal by a member of restrictions maintained or imposed under Article XIV, Section 2;
  • (iii) the balances have been acquired contrary to the exchange regulations of the member which is asked to buy them;
  • (iv) the currency of the member requesting the purchase has been declared scarce under Article VII, Section 3(a); or
  • (v) the member requested to make the purchase is for any reason not entitled to buy currencies of other members from the Fund for its own currency.

Section 5. Furnishing of information

(a) The Fund may require members to furnish it with such information as it deems necessary for its activities, including, as the minimum necessary for the effective discharge of the Fund’s duties, national data on the following matters:

  • (i) official holdings at home and abroad of (1) gold, (2) foreign exchange;
  • (ii) holdings at home and abroad by banking and financial agencies, other than official agencies, of (1) gold, (2) foreign exchange;
  • (iii) production of gold;
  • (iv) gold exports and imports according to countries of destination and origin;
  • (v) total exports and imports of merchandise, in terms of local currency values, according to countries of destination and origin;
  • (vi) international balance of payments, including (1) trade in goods and services, (2) gold transactions, (3) known capital transactions, and (4) other items;
  • (vii) international investment position, i.e., investments within the territories of the member owned abroad and investments abroad owned by persons in its territories so far as it is possible to furnish this information;
  • (viii) national income;
  • (ix) price indices, i.e., indices of commodity prices in wholesale and retail markets and of export and import prices;
  • (x) buying and selling rates for foreign currencies;
  • (xi) exchange controls, i.e., a comprehensive statement of exchange controls in effect at the time of assuming membership in the Fund and details of subsequent changes as they occur; and
  • (xii) where official clearing arrangements exist, details of amounts awaiting clearance in respect of commercial and financial transactions, and of the length of time during which such arrears have been outstanding.

(b) In requesting information the Fund shall take into consideration the varying ability of members to furnish the data requested. Members shall be under no obligation to furnish information in such detail that the affairs of individuals or corporations are disclosed. Members undertake, however, to furnish the desired information in as detailed and accurate a manner as is practicable and, so far as possible, to avoid mere estimates.

(c) The Fund may arrange to obtain further information by agreement with members. It shall act as a centre for the collection and exchange of information on monetary and financial problems, thus facilitating the preparation of studies designed to assist members in developing policies which further the purposes of the Fund.

Section 6. Consultation between members regarding existing international agreements

Where under this Agreement a member is authorized in the special or temporary circumstances specified in the Agreement to maintain or establish restrictions on exchange transactions, and there are other engagements between members entered into prior to this Agreement which conflict with the application of such restrictions, the parties to such engagements shall consult with one another with a view to making such mutually acceptable adjustments as may be necessary. The provisions of this Article shall be without prejudice to the operation of Article VII, Section 5.

Section 7. Obligation to collaborate regarding policies on reserve assets

Each member undertakes to collaborate with the Fund and with other members in order to ensure that the policies of the member with respect to reserve assets shall be consistent with the objectives of promoting better international surveillance of international liquidity and making the special drawing right the principal reserve asset in the international monetary system.

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13 hours ago, Carrello said:

 

We are all here to get to get information. If you have a question and can provide the answer, many would really appreciate any info you can provide. You might just be a hero! 

yep. i am here to get information, too like all of you here. . but i amn't trying to be a hero. and i don't want to be a hero.

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