Iraq's central bank warned on Monday that a court ruling placing it under the supervision of the cabinet rather than parliament could expose its international assets to seizure by Iraq's creditors.
"(The bank's) independence, as stated in the law, was and still is the only guarantee that the Central Bank of Iraq's financial resources outside Iraq are not subject to measures of confiscation and seizure by international creditors," the bank said in a statement. Iraq still faces war reparations claims from Kuwait for invading the emirate in 1990 under Saddam Hussein.
The supreme court issued a ruling last week placing a number of independent institutions under Prime Minister Nuri al-Maliki's cabinet instead of parliament. They included the electoral commission and the main anti-corruption watchdog, as well as the central bank.
Maliki requested a court ruling on the issue before he was reappointed prime minister last month. The decision in his favour alarmed critics who view it as an attempt by the Shia leader to consolidate power as US forces withdraw this year.
The government said the measure was aimed at clearing up constitutional ambiguities in parliament's oversight of the institutions which had allowed the bodies to be hijacked by partisan political interests. The central bank holds $50 billion in international reserves. Iraq could also face hundreds of millions of dollars in private lawsuits in the United States once it emerges from sanctions imposed by the United Nations.
Asked whether the government might interfere in the bank's policies, central bank senior adviser Mudher Kasim said, "This is where the danger lies."