Volume 1 - Iraq Watch

Figure 33. Total assets in Iraq’s banks for 2003.banking laws and regulations. The imposition of thesanctions forced the Iraqis to seek alternative methodsto avoid having their assets frozen in accounts in thename of their government or ministries. The two primarymethods used to circumvent the sanctions wereto pay cash to intermediaries and the use of nomineenamed letters of credit.The Finance Minister authorized individuals to takecurrency out of Iraq. This was against the law for bothIraqi citizens and non-citizens without the consent ofthe Finance Minister. The Finance Ministry wouldreceive an order from Saddam, authorizing an individualto take a certain amount of currency outside ofIraq. The Finance Minister would then arrange withIraqi customs for that individual to be allowed safepassage through the border, with the currency. Typically,the funds authorized were not very large. Fundsranged between $2,000 and $3,000, occasionally ashigh as $5,000. Those authorized to take the currencyabroad were friends of Saddam and supporters of theIraqi cause.At the beginning of 2000, each ministry and governmentalagency established accounts with banks inSyria, Jordan and Lebanon, in the names of selectedemployees within each of their respective organizations.The Iraqi government used its Rafidian andRasheed banks in these countries because of theirdirect links to Baghdad. After MIC contracted for theprocurement of goods or materials they would sendinstructions to the bank to transfer the amount ofthe contract value into an account for the supplier ormiddleman. The recipient would be credited with thefunds, but the funds would not actually be releaseduntil after delivery of the products.The Use of Foreign BanksBefore the 1991 Gulf War, the Regime had funds inaccounts in the US, Europe, Turkey and Japan. After1991, the Regime shifted its assets into accounts inJordan, Lebanon, Belarus, Egypt and Syria. An agreementwas drafted with Sudan but never completed.Accounts appeared in the names of the CBI and theSOMO.The CBI’s Investment Department Director General,Asrar ‘Abd al-Husayn was responsible for managementof these overseas accounts and maintainedsignatory power of the accounts, up to a limit of $1million. CBI Governor Isam Rashid al-Huwayshhad final responsibility and supervisory authorityover these accounts. There were no restrictions onthe amounts al-Huwaysh could transfer or withdrawfrom the accounts. The CBI Investment Departmentretained information on account numbers and accountactivities at its office in Baghdad on computer discs,48