COALITION PROVISIONAL AUTHORITY ORDER NUMBER 95
FINANCIAL MANAGEMENT LAW AND
PUBLIC DEBT LAW
Pursuant to my authority as Administrator of the Coalition Provisional Authority
(CPA) and under the laws and usages of war, and consistent with relevant U.N. Security Council resolutions, including Resolutions 1483 and 1511(2003),
Having worked closely with the Governing Council to ensure that economic
change occurs in a manner acceptable to the people of Iraq,
Acknowledging the Governing Council’s desire to bring about significant change
to the Iraqi economic system,
Determined to improve the conditions of life, and opportunities for all Iraqis and to fight unemployment with its associated deleterious effect on public security through stable financial markets,
Recognizing that Iraq needs laws concerning the issuance and payment of public
debt to assist in financing the Government and to promote confidence in the
country’s economic system,
Further recognizing the CPA’s obligation to provide for the effective
administration of Iraq,
Recalling that U.N. Security Council Resolution 1483 (2003) called upon the CPA
to promote economic reconstruction and the conditions for sustainable
development,
Acting in a manner consistent with the Report of the Secretary General to the
Security Council of July 17, 2003, concerning the need for the development of
Iraq and the need to enact institutional and legal reforms to give it effect,
I hereby promulgate the following:
Section 1
Purpose
1) This Order promulgates the Financial Management Law, which establishes a comprehensive framework for the conduct of fiscal and budgetary policy in line with international best practices, by setting a structured process for
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the formulation of the federal budget and a number of reporting
requirements aimed at increasing the accountability and transparency of the
budgeting process.
2) This Order promulgates the Public Debt Law, which authorizes the Ministry of Finance to issue and pay debt securities guaranteed by the Government, and establishes certain related authorities and duties, for the purposes of financing Government operations and promoting a stable Iraqi economy.
Section 2
Financial Management Law
The Financial Management Law attached to this Order as Annex A shall have
the full force and effect of law.
Section 3
Public Debt Law
The Public Debt Law attached to this Order as Annex B shall have the full
force and effect of law.
Section 4
General Provisions
1) Prior to the transfer of governance authority to the Iraqi Interim Government in accordance with Article (2)(B)(1) of the Law of the Administration for the State of Iraq for the Transitional Period, the powers and responsibilities assigned to the Prime Minister and Council of Ministers by the Financial Management Law and the Public Debt Law shall be exercised by the Administrator.
2) Until such time as the Iraqi Interim Government assumes full governance authority in accordance with Article (2)(B)(1) of the Law of the Administration for the State of Iraq for the Transitional Period, the Ministry of Finance is prohibited from issuing new debt securities if the issuance of such securities would increase the total level of Iraq’s public debt, including obligations to the Central Bank, beyond the current level of such debt.
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ANNEX A
IRAQ
FINANCIAL MANAGEMENT LAW OF 2004
Section 1
Purpose
This Law shall regulate the arrangements governing the preparation, adoption, recording, management, execution, and reporting of the federal budget of Iraq and related issues including public borrowing and guarantees, internal control, accounting, and auditing. The principles of transparency, comprehensiveness, and unity shall be of fundamental importance in the preparation and execution of the federal budget of Iraq, and in related issues.
The principle of transparency requires that budget information be classified according to accepted international standards and presented in a way that facilitates policy analysis and promotes accountability.
The principle of comprehensiveness requires that the budget cover all government agencies and institutions undertaking government operations, so that the budget presents a consolidated and complete view of these operations and is voted on, as a whole, by the body vested with national legislative authority.