L. Paul Bremer, Coalition Provisional Authority

“ Establishing a bank in Iraq, including as a majority or wholly-owned subsidiary of a
foreign bank or bank holding company, shall require the prior issuance of a banking license
by the CBI. Establishing a branch or representative office of a foreign bank in Iraq shall
require the prior issuance of a permit by the CBI. The subsidiary of foreign owned banks
shall be required to have 50 billion dinars of capital. There is no restriction on where that
capital is invested. ”

“ Article 91 Secured claims
1. Assets securing an approved claim of a creditor against the bank shall be sold in a
commercially reasonable manner and the secured creditor shall be deemed repaid in full to
the extent that proceeds of the sale provide sufficient funds to cover the approved claim. If
proceeds of the sale exceed the approved value of a claim, any such excess funds shall be
remitted to the receiver for inclusion in the assets of the bank available for distribution to
other creditors as provided in paragraph (1) of Article 92. ”

“ No bank may declare, record in an account or pay to shareholders any portion of profits, or
make any transfer of profits, if such transfer or payment results in a reduction of its capital or
reserves below the minimum levels required under this Law or as required by regulation or
order of the CBI.
3. No bank may distribute profits to shareholders before extinguishing all expenses related to
the establishment and initial organization of the bank.
4. There is no limit to the amount of capital that can be placed in the bank in any given
calendar period. ”

“ The members
of the board of directors of the bank shall not be liable to the bank’s shareholders, depositors,
or creditors for a good faith decision not to challenge the appointment of a conservator. ”

“ In order to promote equal access of domestic and foreign creditors to a universal pool of
assets of a bankrupt bank with cross border activities:
a. if a bankrupt domestic bank has branch offices or representative offices in a foreign
country, the CBI shall cooperate as much as possible with the authorities of that
country;
b. if a creditor of a bankrupt domestic bank has received partial payment on its claims
in a foreign country, the balance of its claims may be presented for payment together
with costs incurred in the proceeding in Iraq ”

“ Article 16 Other capital requirements
1. Each bank shall at all times maintain capital, including its unimpaired capital and reserves,
in Iraq of not less than the equivalent of 12 percent of the total value of its assets determined
on a risk-adjusted basis, or such higher percentage as specified by regulation of the CBI,
whereby not less than one-half of such capital shall consist of core capital. ”

“ No bank may extend credit to a related person or senior bank official:
a. if, in the case of a domestic bank, the credit and its financial terms and conditions
have not been approved by the board of directors ”

“ The CBI shall not approve a proposed acquisition referred to in
paragraph (1) if it would substantially lessen competition, jeopardize the financial soundness
of the bank or endanger the interests of the bank’s depositors.
4. Any person, acting directly or indirectly or through or in concert with other persons, who
proposes to increase an existing qualifying holding in a bank in a manner that would reach or
exceed a threshold of 20 percent, 33 percent or 50 percent of the bank’s capital or the voting
rights, respectively, shall give at least 30 days prior notice to the CBI.
5. ”

“ Permits for branches may be issued only to foreign banks that are subject to
comprehensive consolidated supervision by a supervisory authority in the country in which
the foreign bank’s head office is located.
5. Except as otherwise provided in this Law, subsidiaries and branches of banks in part or
totally owned by foreign persons are to be treated under the laws of Iraq no less favorably
than domestic banks. ”

“ It shall be prohibited for any bank without first obtaining the CBI’s prior written approval
to acquire stock or shares in a company established outside Iraq, except when such stock or
shares are transferred to it in the course of its banking operations.
Article 34 Bank holidays
All banks must open their doors for business with the public on all days and during all office
hours approved by the CBI, excluding Fridays and bank holidays. The CBI shall, by
regulation, announce the holidays to be observed by banks. ”

“ Other regulatory objectives include those of promoting public understanding of the
banking system by providing appropriate information, maintaining an appropriate degree of
protection for depositors, and helping to reduce financial crime, including fraud, money-
laundering and terrorist financing. ”

“ Banks shall: maintain adequate capital and liquidity; make adequate provision for
depreciation of assets, for discharge of liabilities, and for losses; maintain adequate
accounting and other records of business; observe sufficient and effective risk controls; and
ensure that their assets are diversified as to risk of loss.
3. The CBI shall, by regulation, prescribe detailed standards of conduct for banks which the
CBI shall apply in its prudential supervision in accordance with international standards and
best practices. ”

“ The receiver appointed by a decision of the Tribunal opening bankruptcy proceedings
against a bank, or under paragraph (5) of this article with respect to any replacement receiver,
shall be selected by the Tribunal from a list of candidates submitted to the Tribunal by the
CBI. Only fit and proper persons are eligible to serve as receiver or replacement receiver for
a bank. The bankruptcy decision shall specify the remuneration and the other terms and
conditions of employment of the receiver. ”

“ For a company established in the form of a juridical person pursuant to the laws of Iraq the
application shall include the following documents and information:
a. an authenticated copy of the instrument under which the applicant is formed,
together with the memorandum of association or bylaws, if any, and the address of its
head office;
b. the amounts of the authorized and subscribed capital of the applicant, including the
amounts that have been paid in ”

“ Each bank shall send copies of the audit report to the CBI not later than 30 days after it
becomes available. Where the CBI is not satisfied with the auditor’s report, it may require the
appointment of another auditor to prepare a new audit report within a specified time.
Article 47 Additional duties
1. ”

“ Activities performed pursuant to micro and small business credit access or similar grant
programs by entities other than banks shall be permitted as authorized by entities exercising
governmental authority. Such activities shall be exempt from the application of this law.
Such entities exercising governmental authority shall provide notice and periodic reports to
the CBI concerning their exempted credit access and grant programs.
Section 2 – Licensing
Article 4 Licenses and permits
1. ”