Volume 1 - Iraq Watch

How Surcharges Were Collected ....................................................................................... 35Kickbacks on Commercial Goods Import Contracts......................................................... 35Private-Sector Oil Sales .................................................................................................... 37Role of the SOMO............................................................................................................. 38SOMO’s Relationship to the MoO .................................................................................... 40Official Oil Accounts ........................................................................................................ 40Banking and the Transfer of Financial Assets for Procurement .............................................. 45CBI .................................................................................................................................... 45CBI’s Role in Licensing Money Exchangers .................................................................... 45CBI’s Role in Tracking Foreign Accounts for Iraq ........................................................... 46Iraqi Bank Holdings .......................................................................................................... 47Funding of the Ministries .................................................................................................. 47The Use of Foreign Banks................................................................................................. 48Use of Banks in Lebanon .................................................................................................. 49Use of Banks in Jordan...................................................................................................... 49Use of Banks in Syria........................................................................................................ 50Use of Banks in Turkey ................................................................................................... 50Use of Banks in Egypt ...................................................................................................... 50Use of Banks in Belarus .................................................................................................... 50Regime Attempts To Recover Funds Prior to OIF............................................................. 51The Role of Cash Transactions.......................................................................................... 51Iraq’s Gold Reserves ......................................................................................................... 51Executing Illicit Procurement in Iraq: Ministries, Commissions, and Front Companies ...................... 53Overview .................................................................................................................................... 53Ministry of Foreign Affairs......................................................................................................... 53MFA-IIS Connections ....................................................................................................... 54MFA’s UN Sanctions Counter-Strategy............................................................................. 55MFA and Iraq’s Bilateral Protocols................................................................................... 56Ministry of Trade ...................................................................................................................... 56MoT’s Role in Procurement .............................................................................................. 57Facilitating Illicit Procurement With Cover Contracts...................................................... 58Facilitating Illicit Trade Through Commercial Attaches................................................... 58Ministry of Defense ................................................................................................................... 61MoD Procurement Leadership ......................................................................................... 61MoD Procurement Directorates ........................................................................................ 61Budgeting and Financing Military Procurement............................................................... 62MoD Procurement Process ............................................................................................... 63Procurement for the Republican Guard and Special Republican Guard .................................... 64Military Industrialization Commission ...................................................................................... 65Procurement Leadership in the MIC ................................................................................. 65MIC: Beneficiary of Illicit Funds ...................................................................................... 66ii