Contractor bonds and cheques in the Kurdistan Region: arrest of the head of the Central Bank's Erbil branch (2016) and a seven-year sentence for trading contractors' cheques at a discount (2018)

During the Region's financial crisis after 2014 the Kurdistan Regional Government gave bonds to contractors it owed. On 13 April 2016 the Erbil police spokesman said the director of the Central Bank in the Kurdistan Region and his deputy had been arrested on a judicial order obtained by the Region's Integrity Commission. Iraq Business News and Rudaw named him as Adham Karim, head of the Central Bank of Iraq's Erbil branch, and said the inquiry concerned the illicit trade of bonds the government had given to contractors, a scheme that Rudaw said may have cost the government more than USD 1 billion. The arrests followed a reform programme launched by Region President Masoud Barzani on 10 April 2016. On 29 May 2018 the Integrity Commission said a man who had bought cheques from contractors at lower prices and used them in public banks had been sentenced to seven years in prison and a fine of USD 1,662,000, and that a second person had been convicted of embezzling payments of electricity bills in Sulaimani; both cases were heard by the Sulaimani Criminal Court. The outcome of the case against Karim is not known.