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Fouad Hussein announces Iraq's exit from Chapter VII


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Iraq paid Kuwait a final installment of war reparations more than 31 years after the invasion of Kuwait, which may free up funds for new domestic projects.
Iraq Kuwait
Iraqi and Kuwaiti (L) delegations attend the joint meeting on April 29, 2012 in Baghdad, Iraq. Iraq and Kuwait initiated the formation of joint committees to resolve problems existing between them including war compensation after the invasion of Kuwait by Saddam Hussein's regime in 1991. Ahmad Al-Rubaye-Pool/Getty Images
 

Iraq's economic situation in 2022 should benefit from Baghdad's paying the final installment of compensation to Kuwait for the invasion of 1990.

On Dec. 22, the Central Bank of Iraq announced the final payment to Kuwait, amounting to $52.4 billion, more than 31 years after the invasion of Kuwait [THE $54 BILLION IS THE FINAL PAYMENT, OR CUMULATIVE PAYMENT?]

Mazhar Muhammad Salih, a financial adviser to Iraqi Prime Minister Mustafa al-Kadhimi, told Al-Monitor that the payment has boosted Iraq's credit rating, and added, "Accredited international rating agencies placed Iraq within the B zone and developed to the international financial community a positive outlook on Iraq’s financial capabilities.”

Despite the payment, Salih pointed out that Iraq is still carrying a debt on the books with international creditors, although that could be resolved soon. "This debt is nominally owed to about 12 countries, including four Gulf countries, and belongs to the pre-1990 period," he said. Under the Paris Club agreement signed between Iraq and its international creditors, the amount should be written off by 80 percent, or $41 billion, so "then it would be equivalent to only $8-9 billion as a result of the Iran-Iraq war, and I expect it to be completely written off.”

Salih believes added, “The annual cumulative amount of these compensations provides at least $2 billion on an annual basis, which benefits Iraq’s budget, be it in settling the upcoming annual foreign debt dues or in providing sums that go to productive investment projects.”

“Settling compensation debts improves the country’s financial capabilities so long as these are employed in development and investment projects,” Salam Sumaisem, a former economic expert at the General Secretariat of the Iraqi Council of Ministers, told Al-Monitor. “The upcoming financial abundance should not be wasted like many opportunities were wasted over the past years.”

Abbas Abboud, an academic and editor-in-chief of the Iraqi newspaper Al-Sabah, told Al-Monitor that “the final payment will reduce the psychological impact on Iraqis and will push toward balanced political relations with the Gulf countries in general and with Kuwait in particular.”

Qassem al-Gharawi, a political analyst from the Iraq Institute for Strategic Studies, told Al-Monitor that “there are government parties trying to redirect the funds that were intended for the settlement of compensation toward establishing sovereign funds for generations to come.”

However, he said that the money formerly earmarked for Kuwait would be better placed in a program for profitable and sustainable development projects  outside the government authority.

Manar al-Obaidi, an economic analyst and official spokesperson for the Extension Movement, told Al-Monitor that the settlement will increase Iraq’s income, "especially considering that 5 percent was deducted from oil sales to pay such compensation.” Iraq’s foreign debt has fallen to $20 billion or about 15 percent of GDP, which he called "a low percentage compared to other countries.”

But, he added, "the fact remains that growth in infrastructure facilities and services is still low.”

Hussein Thagheb, an economic media specialist and economic editor for the Iraqi Assabah newspaper, told Al-Monitor that the former compensation money could be used to support "small and medium-sized enterprises, provided such enterprises are subject to monitoring and appraisal.”

Thagheb believes that “the financial policy needs reforms and clarity as far as performance is concerned. Financial experts and international consultations should help formulate financial policies. Also, the budget law needs reform so that public revenues support economic advancement.”

Most of Iraq’s debts resulted from the uncalculated military adventures of the former Iraqi regime. The final payment to Kuwait could lead to a financial abundance, if the economic decision-making process is reformed away from the routine administrative mentality.

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PR/2022/1                                                                                                                         13 January 2022

 

PRESS RELEASE UNITED NATIONS COMPENSATION COMMISSION PAYS OUT FINAL COMPENSATION AWARD

 

Today, the United Nations Compensation Commission made available $629,324,488 to the Government of the State of Kuwait towards the Commission’s remaining claim with an outstanding award balance. With this payment, all claimants awarded compensation by the Commission have now received the full amount of their respective awards. In total, the Commission has paid out $52.4 billion in compensation to more than 1.5 million successful claimants. The United Nations Compensation Commission is a subsidiary organ of the United Nations Security Council. It 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. Successful claims were paid from the United Nations Compensation Fund which received a percentage of the proceeds generated by the export sales of Iraqi petroleum and petroleum products. This percentage was set pursuant to various Security Council resolutions and decisions of the Commission’s Governing Council and was most recently set at 3 per cent under Governing Council decision 276 (2017). With the Commission nearing its conclusion, a special session of the Governing Council will be held on 9 February 2022 to mark the payment in full of all compensation awarded by the Commission and the conclusion of its mandate. Further information about the Commission can be found on the United Nations Compensation Commission website located at www.uncc.ch.

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  • 2 weeks later...

An article from 23 December 2021:
 

Al-Kadhimi advisor indicated that “About 40 decisions were imposed on Iraq by the Security Council due to Kuwait war and has been completely shackled until the present time, so the end of this file means issuance of a decision by the UN that is expected to be the at beginning of next year to remove Iraq out of the problems of Chapter VII of the United Nations Charter.”
 
Salih stressed "the need for a ten-year development plan that will last for ten years to benefit from oil imports, as we start with the infrastructure and end with income-generating projects in all cases," expecting that "the year 2022 will be a year of progress and prosperity for Iraq and broad positive indicators that begin with the closure of Chapter VII of the Charter of the United Nations, the end of the Kuwait war reparations, the return to normal economic life, and integration into the international community".

 


Another article around the same time mentioned February 9th as the day the UN Security Council would make it official, but I have not seen anything about that lately. 

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On 12/23/2021 at 5:35 PM, yota691 said:
POSTED ON 2021-12-23 BY SOTALIRAQ

Kuwait’s compensation file is awaiting complete closure.. UN meetings are expected

Kuwait’s compensation file is awaiting complete closure.. UN meetings are expected

The Chairman of the Committee of Financial Experts, Abdul Basit Turki, received an invitation to attend the meetings of the Compensation Committee at the United Nations, on February 9th, related to the invasion of Kuwait.

Turki said in an interview today, Thursday, that “the invitation sent by the head of the Compensation Committee to the UN Security Council, Irene, referring to him, included a mention of the possibility of holding side meetings, before the start of the work of the sixteenth special session of the Compensation Committee Board of Directors in Geneva on February 9 of the year next.”

He added that the meetings to permanently close the compensation file will start next February.

Turki called on the Ministry of Foreign Affairs and the concerned authorities to “draft a draft resolution that includes removing Iraq from the provisions of Chapter VII of the Charter of the United Nations completely,” stressing the need for the upcoming resolution to “protect Iraq from any claims related to Kuwait war compensation, whether it is individual claims or not. Filing lawsuits related to compensation. He also called for "the annulment of all decisions that resulted from the Kuwait war."

And last Tuesday, the Central Bank of Iraq announced in a statement received by Alsumaria News, “The completion of the payment of the last remaining installment of the State of Kuwait’s compensation amounting to (44) million US dollars, and thus Iraq has completed the full payment of the compensation amounts approved by the United Nations Compensation Committee of the Council of Ministers. International security under Resolution No. (687) for the year 1991, with a total of (52.4) billion US dollars for the State of Kuwait.

Chapter VII of the United Nations Charter provides for "coercive measures" if peace is threatened, ranging from economic sanctions to resorting to force.

Chapter VII allows the exercise of pressure on a country to compel it to abide by the goals set by the Security Council, before coercive measures are applied.

The Committee of Financial Experts was established based on a decision of the Council of Ministers, based on the recommendation of the United Nations, to replace an independent specialized Iraqi body in the place of the International Advisory and Monitoring Council, which had been formed under International Resolution No. 1483 of 2003 by the Vice President of the World Bank and the Vice President of the International Monetary Fund International, and a representative of the Arab Economic and Social Development Fund, headed by the United Nations Financial Assistant, who was later replaced by Abdul Basit Turki.

The UN Compensation Committee was formed in 1991, obligated Baghdad to pay $ 52.4 billion in compensation to individuals, companies, governmental organizations and others who incurred losses resulting directly from the invasion of Kuwait.

Iraq stopped making payments in 2014 during the war on ISIS, which took control of large parts of the country, but resumed payments in 2018.

It is noteworthy that the Development Fund for Iraq and the subsequent account was established pursuant to Security Council Resolution No. 1483 on May 22, 2003, to manage the revenues of crude oil and oil products exported from Iraq, the remaining balance of the Oil-for-Food Program and receipts from frozen assets from the former regime.

The fund consists of bank accounts with the US Federal Bank in New York, which are managed by the Central Bank of Iraq on behalf of the Ministry of Finance, which has an account with the Iraqi Central Bank numbered 300600 (the subsequent account), which was opened in 2014.

Under the Security Council resolution, referred to above, 95 percent of the receipts for exports of oil, oil and natural gas sales must be deposited in the fund, while 5 percent is transferred to the United Nations Compensation Fund account, in accordance with Security Council Resolution No. 687 in 1991, and subsequent resolutions .

This fund constitutes the source of financial funding for the Ministry of Finance, where the money is transferred from the fund to the sub-accounts of the Ministry of Finance, and then distributed to the ministries of state and institutions, according to the budget allocated to each of them, in addition to being used to pay foreign debts and cover the costs of credits and other foreign transfers.

Bringing this post from yota forward from earlier in this thread. Mentions expected UN mtgs on February 9th. 

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7 hours ago, Half Crazy Runner said:

Seeing how it’s my birthday on the 9th, I’m going to say you’re 💯% correct on that 🥳😁

and the RV is the only thing on my birthday list 🎁💰 🥂 

Mine was 4 days ago on the 29th. I'll be singing Rocky Top and happy birthday to you at the top of my lungs. I hope we all have a reason to celebrate.

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On 2/3/2022 at 9:44 AM, Half Crazy Runner said:

Belated happy birthday to you tn! 🥳 

Well I didn't get my birthday wish but I sure the heck hope you get yours...

 

On 2/2/2022 at 11:37 PM, tn vol said:

Mine was 4 days ago on the 29th. I'll be singing Rocky Top and happy birthday to you at the top of my lungs. I hope we all have a reason to celebrate.

Happy Belated Birthday!!!

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(edited)

Can they define “early”? Inquiring minds would like to know Since we are in the second month of 2022. Or is that word interchangeable with the word “soon”?

 

Edited by Theseus
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On 2/2/2022 at 6:11 AM, Fairways&Greens said:

An article from 23 December 2021:
 

Al-Kadhimi advisor indicated that “About 40 decisions were imposed on Iraq by the Security Council due to Kuwait war and has been completely shackled until the present time, so the end of this file means issuance of a decision by the UN that is expected to be the at beginning of next year to remove Iraq out of the problems of Chapter VII of the United Nations Charter.”
 
Salih stressed "the need for a ten-year development plan that will last for ten years to benefit from oil imports, as we start with the infrastructure and end with income-generating projects in all cases," expecting that "the year 2022 will be a year of progress and prosperity for Iraq and broad positive indicators that begin with the closure of Chapter VII of the Charter of the United Nations, the end of the Kuwait war reparations, the return to normal economic life, and integration into the international community".

 


Another article around the same time mentioned February 9th as the day the UN Security Council would make it official, but I have not seen anything about that lately. 

where is this article referring to the 9th? could be huge who knows

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