Volume 1 - Iraq Watch

• The Regime implemented the gold purchase in2001 upon the recommendation of al-Huwayshand against the opposition of Minister of FinanceHikmat Mizban Ibrahim al-Azzawi. Al-Huwayshwas concerned that Saddam and his sons couldeasily remove cash reserves whenever they wantedor could easily use the cash reserves in purchasingweapons from foreign suppliers.• Gold, on the other hand, was heavy and could notbe easily removed, ensuring that the CBI wouldretain these reserves, even if the Regime decided toremove the cash reserves. Al-Huwaysh, however,could not use this argument to convince Saddamto begin a gold purchase program, and he insteadargued that the gold reserves could not be destroyedin the event of bombing and fire at the bank duringa war.• Saddam accepted this latter argument and authorizedthe gold purchased beginning in 2001. Prior tothe outbreak war with coalition forces, the Regimedid not have any plan for dispersing the gold uponcommencement of hostilities.The Rafidian Bank central office in Baghdad had anunknown but relatively small quantity of gold in itsvault as of 19 March 2003. Under the former Regime,Iraqis were not allowed to sell their gold overseas,but many people attempted to smuggle their personalgold out of Iraq to take advantage of the higher pricesin overseas markets and to secure foreign currency.When these smugglers were caught, the governmentconfiscated the gold and put it in the vault ofthe Rafidian Bank. Iraqi ministries did not retain anygold.52