Continuing legacy: Biden extends Bush-era executive order safeguarding Iraq's assets

Continuing legacy: Biden extends Bush-era executive order safeguarding Iraq's assets

Shafaq News / Across successive American administrations, the enduring legacy of protecting Iraq's assets, initially set forth by former President George W. Bush, endures.

This legacy encompasses reaffirming a presidential executive order to safeguard the "Iraqi Reconstruction Fund," established to secure revenues from oil sales and shield them from potential legal challenges. Furthermore, a suite of directives aimed at safeguarding Iraq's assets has been extended, marking over two decades since the country's regime change.

US President Joe Biden recently signed a decree extending the national emergency status related to Iraq's situation for another year. This extension occurs against ongoing challenges to Iraq's reconstruction efforts, peace restoration, and development of its political, administrative, and economic institutions.

Notably, these obstacles pose significant threats to both Iraqi and US national security and foreign policy objectives. Therefore, President Biden has deemed it imperative to sustain the national emergency declared under Executive Order 13303, addressing Iraq's stabilization.

Order 13303

Executive Order 13303 was crafted to shield the Iraqi Reconstruction Fund and other assets of interest to Iraq. Former President George W. Bush identified a threat of seizure or legal actions against the Iraqi Reconstruction Fund, Iraqi oil, petroleum products, and their revenues. This situation was deemed an unusual and extraordinary threat to US national security and foreign policy, prompting a national emergency declaration.

The order nullifies any seizure, judgment, or other legal action against the Iraqi Reconstruction Fund and associated assets. Additionally, it prohibits American citizens, residents, and entities from filing lawsuits against Iraqi funds. Per the US National Emergencies Act, failure to renew the executive order within 90 days renders it void.

Reconstruction Fund

The Iraqi Reconstruction Fund emerged post-2003, replacing the arrangement under the Oil-for-Food Program, wherein the United Nations managed Iraqi oil sales revenues.

In the mid-1990s, a United Nations Security Council resolution concerning the Oil-for-Food program was issued, allowing for the sale of a portion of Iraqi oil in exchange for purchasing medicines and food during Saddam Hussein's regime, which suffered from international sanctions following his invasion of Kuwait in 1990.

This arrangement continued until 2003, when a new resolution was passed by the Security Council, lifting most of the economic sanctions on Iraq, contingent upon resolving issues related to the Kuwait invasion, such as compensation and prisoners.

Regarding this, Iraqi writer and political researcher Aqeel Abbas stated that "when the sanctions were lifted, a problem arose as there were numerous claims against Iraq by hundreds of companies that suffered losses from Iraq's invasion of Kuwait, in European countries and elsewhere."

He added to Alhurra that "Iraqi embassies at that time did not attend court sessions to defend or reduce the compensations, resulting in courts issuing default judgments with exorbitant amounts."

Abbas, currently residing in Virginia, affirmed that "there were judicial orders freezing Iraqi funds until the claims ruled by the courts were fulfilled."

"Therefore, what saved Iraq from these claims was the protective order issued by former US President George Bush in 2003," according to Abbas, who pointed out that "under the presidential executive order, Iraqi funds in the Iraqi Reconstruction Fund were protected as if they were American funds."

American influence

In 2010, the Iraqi Reconstruction Fund was dissolved by a UN decision, which also terminated all international guarantees of immunity granted to Iraq from compensation claims.

Instead of the dissolved fund, an account was opened under the Iraqi Central Bank (CBI) at the US Federal Reserve Bank, where all revenues from Iraqi oil sales were deposited.

However, the United States renewed the presidential executive order annually to protect Iraqi funds from any legal pursuits.

Former Iraqi Parliament's Finance Committee member Ahmed Hamah Rashid stated that "maintaining the status quo means that the fate of Iraq's funds will remain tied to the United States, which represents a strong bargaining chip in Washington's hands." He explained that "this issue cannot be resolved except by repaying all debts, which will take years if not decades."

On the other hand, Abbas pointed out that linking the issue of protecting Iraqi funds from legal pursuits to the United States "grants Washington significant leverage over Baghdad," adding that "resolving the crisis requires a political decision, as happened with Greece and Argentina, for example, by enlisting a reputable and influential law firm to be given full authority."

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