Iraq and Britain sign preliminary banking agreement

A man uses a smart card at the Rafidain Bank in Baghdad. [Mahmoud Raouf Mahmoud / Reuters]

A man uses a smart card at the Rafidain Bank in Baghdad. [Mahmoud Raouf Mahmoud / Reuters]

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The Iraqi government concluded an initial agreement with the British Treasury to enhance economic ties and help Iraq develop its economy and banking sector, officials announced Sunday (October 9th).

Salam al-Quraishi, senior economic adviser to the Iraqi government, said at a press briefing that the first step to reaching a comprehensive agreement in the coming weeks would be to create a committee to develop cooperation between the two countries. He said the final agreement would continue until 2016.

"The agreement is based on joint and mutual benefit, and includes improving the economic situation in Iraq, upgrading banks, and turning them into world-class banking and financial institutions," al-Quraishi said.

He also said the agreement focuses on transitioning government banks to an electronic banking system and enhancing their protection measures. It also includes a paragraph in which the United Kingdom commits itself to supporting the Iraqi government in all economic fields and in formulating its external economic policies.

'A leap in the development of Iraq's financial performance'

Fuad Hussein, director of development and planning at the Iraqi Ministry of Finance, told Mawtani that the agreement would help introduce modern technology into Iraqi banking transactions with the use of a secure electronic system, smart cards, and opening lines of credit for Iraqi government and private banks.

"The agreement will also include sponsoring workshops and training courses for Iraqi employees in London to train on fighting fraud, money laundering and unsubstantiated financial transfers, in addition to customer service," he said.

According to Hussein, a delegation composed of legal and economic experts from the Ministry of Finance is preparing to visit the United Kingdom by the end of the month to finalize the details of the agreement.

"The agreement will be a major turning point in the history of Iraq and a leap in the development of its financial performance and its methods in economic dealings with world countries," Hussein said.

Iraqi businessmen and private companies will also benefit

Saad Nasser al-Saffi of the office of inspector general at the Ministry of Finance said the agreement would have a positive impact on Iraq's economy.

"The new agreement will be a new start for Iraqi banks, both private and government owned, which will be positively reflected on the economic situation in the country," he said.

Al-Saffi told Mawtani that a number of British banks would open branches in Iraq, and Iraqi banks would open their own branches in Britain.

"These operations will enable reconstruction companies to find solid walls to rely on in their investments in Iraq, and this will contribute to activating the economic cycle in the country and increase the confidence of foreign investment companies to work in Iraq," he said.

Economist Alaadeen al-Dahhan told Mawtani the agreement would provide additional expertise to Iraqis as they develop the country's economy.

"Basically, this agreement comes to support the Iraqi people and government in developing and rebuilding their country through the accumulated expertise held by [Britain] in the areas of economics and daily financial transactions in general," he said.

Al-Dahhan said Iraq badly needs this partnership now "because businessmen and private companies will also benefit from this agreement indirectly, as it involves major benefits for them in their daily transactions with local and foreign banks".