ERBIL, Kurdistan Region - Delegations of the Kurdistan Regional Government (KRG) and the Iraqi federal government on Wednesday signed a memorandum which will see Baghdad fulfilling its role in providing Erbil’s financial entitlements as stipulated in the recently-passed federal budget.
A statement from the KRG delegation in the early hours of Thursday said that the two sides reached an agreement on the implementation of the Kurdistan Region-related Articles in the budget during the meeting.
“Within that framework, a joint memorandum was signed between the two delegations to immediately start funding the Kurdistan Region,” it added.
The federal government delegation is yet to comment on the new agreement.
Rudaw has learnt that the deal obliges the Region to hand over its non-oil income to Baghdad but it is not clear how much will later be returned to the Region. Fifty percent of the income of the border crossings will be returned to the Kurdish government.
An informed source told Rudaw that once the Kurdish government fully complies with the new deal, it will receive its share from the federal budget. Another source said Baghdad will send the Region's monthly share next week.
KRG Spokesperson Peshawa Hawramani said in a social media post that, as a result of the agreement, the salaries of the Kurdistan Region’s public servant salaries will be distributed as soon as possible.
Iraq passed its highly-contentious federal budget in June after months of discussions. The KRG has appealed several points in the federal budget law relating to the Kurdistan Region, including Articles 11, 12, and 13, which detail the Region’s share and the management of its oil, claiming they were drafted “unlawfully and unconstitutionally.”
The budget law obliges the KRG to sell 400,000 barrels of crude oil through Iraq’s national oil marketing body and if the suspension of exports continues, Iraq will take Kurdish oil for its internal use.
Turkey stopped the flow of Kurdish oil through the Iraq-Turkey pipeline after a Paris arbitration court on March 23 ruled in favor of Baghdad, saying Ankara had breached a 1973 pipeline agreement when it allowed the Kurdistan Region to begin independent oil exports in 2014.
The Region’s oil exports have yet to resume and the federal budget is expected to be implemented later this month. The KRG, which heavily relies on oil revenues, now is reliant on local income and money sent by Baghdad as debt to pay its civil servants.
