VZCZCXRO9294
RR RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #1238 1000729
ZNR UUUUU ZZH
R 100729Z APR 07
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 0663
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS BAGHDAD 001238 
 
SIPDIS 
 
SIPDIS 
 
SENSITIVE BUT UNCLASSIFIED 
 
E.O. 12958:  N/A 
TAGS: ECON EFIN IZ
SUBJECT:  THE DOLLAR MARKET IN SULAIMANIYAH, IRAQI KURDISTAN 
 
This is a Kurdistan Regional Reconstruction Team (RRT) cable. 
 
¶1.  (SBU) SUMMARY.  The Chairman of the Chamber of Commerce of 
Sulaimaniyah Province, Iraqi Kurdistan said the unofficial dollar 
market operates there in response to the lack of basic banking 
services and products of the local banks.  The dollar market 
operates without official controls which lends itself to the 
possibility of money laundering. END SUMMARY. 
 
¶2.  (SBU) RRT Off met with the Chairman of the Sulaimaniyah 
Provincial Chamber of Commerce at his office in Sulaimaniyah on 
March 28.  Hassan Baqi Hawrami said the dollar market in 
Sulaimaniyiah is comprised of independent businessmen who are not 
linked in an institutional sense; however, they coordinate at times 
to carry out large financial transactions.  These 60 to 70 
individuals, he mentioned, work in downtown Sulaimaniyah city in the 
small offices of a two-story building.  Hawrami stated they are 
linked to hundreds of others in neighboring Jordan, United Arab 
Emirates, Turkey and Iran.  Customers are in contact with the agents 
of the dollar market via telephone, he added. 
 
¶3.  (SBU) The Chairman told RRT Off that the dollar market agents 
have bank accounts in Iran or Turkey and require a two to three and 
one half percent commission per transaction; the commission varies 
according to the transaction amount.  He emphasized that 
transactions are carried out at the risk of the customer. 
 
¶4.  (SBU) Hassan Hawrami told RRT Off the flow of dollars and 
products goes smoothly in both directions between Iraqi Kurdistan 
and Iran as well as between Iraqi Kurdistan and Turkey. 
Transactions occur through debit and credit of bank accounts of the 
agents or cash crossing the border.  There are times when customers 
have given their dollars to an agent and never see it again.  No 
insurance exist or legal recourse for a failed transaction. 
 
¶5.  (SBU) The dollar market began 1991 but has become stronger in 
the last eight years, Hawrami said.  He estimated a ten million 
dollar daily turnover in the market.  He noted that it appears the 
number of transactions recently decreased since the USG and the 
Central Bank of Iraq supported a strong dinar.  Hawrami added that 
locals are taking their dollars out of the country at an estimated 
rate of two billion dollars per annum. 
 
¶6.  (SBU) COMMENT: The dollar market in Iraqi Kurdistan formed and 
operates partially in response to the inability of provincial banks 
to lend funds and attract deposits.  It also reflects the absence of 
a regulatory environment for private sector development.  The 
informal dollar market presents a situation ripe for money 
laundering because there are no official controls.