Baghdad lifts sanctions on Kurdistan’s banks, sends public employees salaries

The Iraqi Ministry of Finance had decided to allocate 250 billion IQD (210 million USD) for public employees from the Kurdistan Regional Government's (KRG) Ministry of Education and Ministry of Health.

ERBIL, Kurdistan Region (Kurdistan 24) – Iraq on Monday said it would lift the punitive measures imposed on banks in the Kurdistan Region amid reports that Baghdad was sending a significant amount of money to cover employee salaries.

During a session in the Iraqi Parliament, MPs voted to lift the financial sanctions imposed on the Region’s banks following Kurdistan’s Sep. 25 independence vote.

Last October, the Iraqi central bank, upon the request of the Parliament, imposed financial restrictions— including the suspension of dollar exchange—on four major Kurdish banks but allowed other financial institutions to continue their foreign currency transfers.

According to the Parliament’s ruling, the central bank would resume its work with banks in Kurdistan but would continue “monitoring the banks” in the Region and prepare monthly reports to related committees in Baghdad.

Masoud Haider, a Kurdish MP in the Iraqi Parliament, told local media outlets that the Iraqi Ministry of Finance had decided to allocate 250 billion IQD (210 million USD) for public employees from the Kurdistan Regional Government’s (KRG) Ministry of Education and Ministry of Health.

Viyan Jaff, Director General of Planning at the KRG’s Ministry of Health, who is also a member of the committee formed by Baghdad to audit the list of employees at both ministries, confirmed that Baghdad had sent the money.

Jaff told Kurdistan 24 that Kurdish members of the Baghdad-appointed committee recommended that the Iraqi government “send the salaries of one month until the committee finalizes the list of the employees.”

On Jan. 22, the central government sent a delegation of 16 members to Erbil to audit the number of government employees in both the KRG’s education and health ministries.

The delegation is divided into two eight-member committees to audit each ministry.

Ties between the KRG and the Iraqi government have considerably deteriorated following the Sep. 25 independence referendum which saw an overwhelming majority support secession.

Before the referendum, Baghdad had cut the Region’s federal budget share at the start of 2014 which led Kurdistan into a financial crisis.

Editing by Karzan Sulaivany