The 30 October Report of the Special Inspector General for Iraq Reconstruction*, an in-country American watchdog that closely monitors developments in Iraq, clearly shows a country out of control, that is ably assisting Iran in the evasion of global sanctions, that exhibits rampant corruption, and a country which should be avoided at all costs by US and EU financial institutions, lest they find themselves in a money laundering, or terrorist financing, nightmare.
The Quarterly Report to the US Congress concluded:
(1) Massive currency flight, in cash, in the amount of $800m a week, is exiting Iraq, and much of it is sent to Iran, notwithstanding global WMD and ballistic missile sanctions; This is an obscene amount of cash. There is no gatekeeper in Iraq.
(2) Much of the currency flight is accomplished through fraudulent documents hiding the true purpose of the cash shipment. The money is purchased by Iraqi banks, for customers without any meaningful compliance being performed on either the client or its alleged customer abroad.
(3) Corruption is ingrained in the Iraqi Government infrastructure, through political parties.
(4) Government contractors employ shell companies located outside of Iraq, and contract prices are rigged.
(5) Corruption, and the patronage it allows, has become a means of governance in Iraq.
(6) The Quota system reigns; it is the allotment of government posts, according to political blocs. The result is that the public benefits only from a small fraction of the money spent on government projects.
My recommendation: check to see if any bank clients are involved in trade or commerce with Iraqi companies or government agencies. Conduct a thorough review of the benefits to the bank of this dubious business, and consider exiting the business and/or the client, forthwith. Your bank does not want to be named as a facilitator of either corruption, or facilitating Iranian sanctions evasion, please. Stop all client/customer trade with Iraq at this time, in my humble opinion.
History will one day record that the United States, under the misguided "Export of Democracy" principle espoused by former US President George W Bush, was responsible for dropping literally billions of dollars, into the bottomless pit of corruption that is post-Saddam Iraq. I regard Iraq as now as at the unacceptable level for Country Risk purposes. Kindly govern yourselves accordingly, ladies and gentlemen, if you are responsible for Country Risk evaluation where you work.
|Special Inspector General Bowen