Iraq assumed full sovereignty of its revenues, taking over the Development Fund for Iraq (DFI), a New York-based bank account set up to meet the country’s reconstruction needs following the US-led invasion in 2003.

With effect from on 1 July, the proceeds from the DFI have been transferred from the International Advisory and Monitoring Board to Iraq’s Committee of Financial Experts, which will “exercise authority in accordance with its terms of reference approved by Iraq’s Council of Ministers”, according to a UN statement on 1 July.

Since May 2003, Iraq’s oil revenue have been paid into the DFI account and disbursed at the discretion of US-led Provisional Authority for humanitarian and economic reconstruction. The DFI replaced the oil-for-food programme, which permitted the UN sanctioned government of Saddam Hussein to use some oil revenues for humanitarian supplies.

Iraq earned more than $7.5bn in May from crude oil exports (MEED 23:6:11).

However, the Iraqi government may now find its funds are under threat of seizure. The country’s international liabilities remain substantial. Since 1991, the UN Compensation Commission (UNCC) has resolved more than 2.6 million claims against Iraq, demanding a total of $352.5bn. Only $52.4bn has been awarded in damages. So far, Iraq has paid $31.3bn.