ICB warns of dangers facing Iraqi funds following federal court ruling

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Baghdad - The adviser of the Iraqi Central BankIraqi Central Bank (ICB) warned on Sunday of the repercussions of the Federal Court's recent ruling that links the bank directly to the council of ministers in exposing Iraqi funds to risks.

Muzher Mohammed Saleh told AKnews today that the international financial environment is risky and instead of referring the Central BankCentral Bank to a judicial power, there is need to make diversity in the management of foreign financial reserves in the countries to escape any legal proceedings affecting the debt of the Iraqi government that are protected under resolution 1483 of the international security council.

The Federal Court issued on January 18 a ruling that links a number of independent bodies to the chairmanship of the Council of Ministers and not to the chairmanship of the parliament in response to Prime Minister Nouri al-Maliki's request to interpret the constitutional article concerning independent bodies.

"Since 2003, the central bankcentral bank has been able to provides a secure umbrella for $50bn to meet its local and international capital needs", he said stressing that "the danger lies in the expiration of international protection next June, and we must think of protecting the assets of Iraq under the ICB only."

"The money of the central bankcentral bank is not the money of the federal government but is a security cover for the national currency and for the Iraqi people ... If the opposite happened according to the recent decision and the money of the central bankcentral bank became governmental, then it would be under risk."

The bodies that the federal court ruling put under the jurisdiction of Maliki's cabinet include the Supreme Commission of Human Rights, the Independent Higher Electoral Commission (IHEC), the Integrity Commission, the Iraqi Central BankIraqi Central Bank, the Financial Inspection Office and the Media and Communications committee.

The ruling contravenes both articles 103 and 104 of the Iraqi constitution's chapter IV which clearly state that these bodies are financially and administratively independent and subject to the supervision of parliament which regulates their work according to the law."

"This gives an impression of confiscating the objectives of the Central BankCentral Bank as an independent body and undermine the goals of other independent institutions," Salah said.

The Iraqi constitution, passed in 2005, states that the central bankcentral bank is accountable to parliament only, with the objective of building a stable financial system, reducing prices, fighting inflation and creating stable conditions that serve the financial security, and in the case of abuse, it is accountable strictly to parliament.

Many parties warn that the Bank will loose its independence and become subjected to political pressures like the rest of the independent bodies covered by the latest court decision, but the federal court's rulings are conclusive and can not be contested.

Many parties believe that this move reflects the desire of the Prime Minister to control the independent bodies, without paying attention to the risks involved in the acquisition of greater powers.

A number of political lists, most prominently the Iraqiya List and the Kurdistan Blocs Coalition (KBC) object to the idea of linking the independent bodies to the Council of Ministers, and consider it an excessive move by the NC.

The decision of the Supreme Judicial Council obliges all the political blocs to implement the decisions of the court and prevented any objection against its decisions being raised.

© AK News 2011