State contracts in dinars and the National Day holiday…the most prominent decisions of the Iraqi government

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The 39th regular session of the Council of Ministers was chaired by Prime Minister Muhammad Shiaa Al-Sudani. They discussed the current situation in the country, followed up on various national issues, and reviewed progress on implementing the government program’s priorities. They also discussed the topics on the agenda, made decisions and recommendations regarding them.
On the occasion of the National Day of the Republic of Iraq, the Prime Minister has announced the suspension of official working hours in all ministries and state institutions on Tuesday, October 3, 2023. This decision was communicated through a statement released by the Prime Minister’s Media Office.
The Council of Ministers has taken a step towards financial and administrative reform by mandating that all state contracts within Iraq be conducted in Iraqi dinars, unless an external documentary credit is involved. In such cases, the terms will be agreed upon by both parties and limited to the value of the credit only.

Furthermore, the Council has directed the Ministry of Planning to compile a list of all previous state contracts that were conducted in US dollars (excluding those with external documentary credit) and send them to the Ministry of Finance and the Central Bank. The list should include the amounts due on these contracts, while the Ministry of Planning should determine a monthly limit for the Central Bank to cover in US dollars based on the receivables from contracting parties.

The Central Bank will cover these receivables at an exchange rate of 1320 dinars per US dollar, which will be deposited into the Ministry of Finance account to cover monthly payments for these contracts. All work and exchange release orders will be subject to release controls.
The Council of Ministers has directed that government banks in Iraq, including the Iraqi Trade Bank, must repay loans from Iraqi borrowers in US dollars at an exchange rate of 1,320 dinars for each dollar borrowed. This is on the condition that the Central Bank covers these loans in US dollars. The lending bank will receive the payment, and this rule will only apply to loans granted before this directive was issued.
The Council of Ministers have given their approval to the Ministerial Council for the Economy’s (230204 Q) recommendation to postpone the Ministry of Transport’s debt claim for flooring fees and fines incurred by the General Iron and Steel Company. The debt will be rescheduled and payment will only be made once the factories of the aforementioned company are operational. The Ministry of Transport/General Company for Ports of Iraq will also take all necessary measures with the beneficiary parties and establish a working mechanism to ensure the timely removal of goods from the ports to prevent any delays that may result in fines or flooring fees.
The Council has been monitoring the energy sector’s progress in implementing reforms, developing, and utilizing gas resources. As a result, the Council of Ministers has approved the Ministerial Council for Energy’s recommendation (number_1 of 2023) for the Nasiriyah oil field’s gas gathering and compression project.
The decision has been made to approve the referral of the gas gathering and compression project in the Nasiriyah oil field, which is under the custody of the coalition consisting of the Oil Projects Company, Ministry of Oil, and the Italian PEG. This approval was made based on the recommendation of the Central Committee for Review and Approval of the Referral in the Ministry of Oil during their session on August 6, 2023. The Dhi Qar Oil Company, one of the Ministry’s companies, requested this referral to be approved at a cost of $272 million, which is 7.3% higher than the estimated cost mentioned in their letter dated July 26, 2023.
The Council of Ministers has approved amendments to the sales contract related to the Iraqi-Jordanian electrical interconnection project. The Ministry of Electricity sent a letter on September 4, 2023, proposing changes to the contract signed in 2019 to align with current requirements. The amendments include the renewal of the contract, modification of terms and conditions, and the use of new equipment. The energy sale contract will maintain the price equation for the sale of electrical energy from the National Electricity Company in the Hashemite Kingdom of Jordan to the General Electric Power Transmission Company – Central Region / Ministry of Electricity. The contract will be valid for 36 months after the connection between the Al-Risha transformer stations in Jordan and the Al-Qaim transformer station in Iraq is completed, with a voltage of 400 kV.
The Council of Ministers has made a decision regarding Iraq’s oil sector. They plan to improve the country’s capabilities and complete the necessary export infrastructure. As part of this plan, the Ministry of Finance will deposit the full cost of the two submarine pipelines project (4 and 5) and the new marine platform, totaling 1.265 trillion dinars, with the Iraqi Trade Bank. The investment is included in the Oil/Basra Oil Company’s 2023 plan.
The Ministries of Planning and Oil have decided to fully commit to the cost of the project mentioned above, with annual allocations included in the investment budget of the Ministry of Oil for the years 2023-2026. The Ministries of Oil and Planning will inform the Ministry of Finance/Accounting Department about financing for the contracting company based on the progress made and approved contexts. Additionally, the Ministry of Oil will be funded using the company’s financial account from the deposit mentioned in Paragraph (1). Cabinet Resolutions (29 of 2020), (6 of 2021), and (83 of 2022) have been cancelled.
The Council of Ministers has decided to approve an exception to the contract for implementing the Misk Wadi Al-Tharthar project. This includes purchasing cameras, concrete towers, and establishing fortified points to improve security. The decision was made through the direct contracting methods outlined in the Instructions for Implementing Government Contracts (2 of 2014) and in accordance with the armament controls issued by the National Security Advisory. The project is of tactical and strategic importance, hence the exception.
The Council has approved the issuance of the Air Defense Institute system in accordance with the Defense University Law for Military Studies No. (4) of 2016 and the Constitution. The Legal Department’s observations in the General Secretariat of the Council of Ministers have also been taken into account. Additionally, a winter agricultural plan has been implemented.
The Council made progress on agricultural plans, methods to combat water scarcity and drought, and modern irrigation techniques. The joint permanent committee between the Ministries of Agriculture and Water Resources approved the winter agricultural plan for the season (2023-2024), and the Council of Ministers approved their recommendations. The Council directed the Ministry of Water Resources to follow the winter agricultural plan based on international meteorological forecasts. The winter planting and seed distribution season will begin on October 1, 2023, and the Ministry of Water Resources will increase water releases on November 15, 2023, and review the indicators for the winter agricultural plan from November 15, 2023, to November 30, 2023.
A decision was made to identify the areas that are irrigated during the winter season. The areas irrigated by rivers and streams are estimated to be around 1.5 million dunums, while the areas irrigated through underground wells are about 4 million dunums. However, the use of modern irrigation systems is a must, and those who fail to comply will not be included in the next agricultural plan. The focus of agriculture should be on rivers and streams, and it should not be practiced within the marshes and floodplains in the governorates of Wasit, Maysan, Basra, Diyala, and Dhi Qar. The government will provide interest-free loans to purchase modern irrigation systems like pivot, fixed, and drip systems, as well as solar energy systems. The cost of fuel will also be subsidized by the Ministry of Water Resources to address water scarcity. Lastly, the government will continue to enforce the law and remove unauthorized fish lakes.
The council has made a decision to form joint committees comprising of water resources directorates, agricultural directorates, agricultural committees, agricultural associations, and police directorates in all governorates and local governments. These committees will monitor whether farmers and peasants comply with the irrigation areas approved in the plan and hold accountable those who do not. The two ministries are not responsible for any compensation requests that may arise from non-compliance. Bi-monthly meetings will be scheduled and coordinated between the Ministry of Agriculture and water resources directorates in all governorates.
The Council has given approval for the Second Amendment System to the System of the Baghdad School of Expressive Musical Arts (16 of 1985). This system was audited by the State Council and is based on the provisions of the Constitution and the Ministry of Culture Law (17 of 2001). As part of cultural relations, the Council of Ministers has approved the reopening of the Iraqi Cultural Center in Berlin, Germany.
During the meeting, the Council reviewed several files and topics listed on the agenda. They made decisions on each of them, such as giving the Ministry of Justice the power to exclude certain law firms with high fees from the selection process. The committee, made up of the General Secretariat of the Council of Ministers, was also given the responsibility of monitoring the Horus Company arbitration decision until September 12, 2023. The goal is to bring together legal, political, and technical efforts for a unified approach.
The Council agreed with the Ministry of Foreign Affairs’ suggestion to establish non-resident diplomatic representation with the Republic of Moldova through our embassy in Bucharest. This decision was based on the provisions of Articles (25) and (26) of Foreign Service Law No. (45) of 2008, as well as the Vienna Convention on Consular Relations for the year 1963. The Ministerial Council for Human Development’s recommendation (23028 B for the year 2023) was also approved, which includes the adoption of the National Strategy for Suicide Prevention in Iraq for the years 2023-2030..

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