It is an octopus whose tentacles extend for thousands of kilometers from the border, its only port and land terminals. In Iraq, the cartel of political parties and armed groups gobbles up tariffs and imports, which amount to billions of dollars.
“It is worse than a jungle because at least, in the jungle, when the animals are satiated, they stop. These people never have enough,” says a customs official.
Like all officials, officers or businessmen questioned by AFP in the last six months, the man agrees to speak only on the condition of anonymity, since like everyone else, he fears for his life.
Iraq is ranked 21st of the most corrupt countries in the world, according to the NGO Transparency International. The two legs of the system are known: inoperative bureaucracy and endemic corruption, two phenomena that have been amplified after the US invasion that deposed Saddam Hussein in 2003.
In an oil economy, with no industry or practically agriculture, customs duties are one of the rare riches that can be hoarded.
“Collusion between officials, political parties, armed gangs and dishonest businessmen leads to the looting of public funds,” Finance Minister Ali Allawi told AFP.
Too many actors “embedded in the machinery of the state,” says Renad Mansour, a researcher at Chatham House. What is impossible to remove.
– Control of the militias –
In 2019 – the latest official data available – Iraq imported goods, excluding hydrocarbons, for € 21 billion ($ 24.7 billion), mostly from Iran, Turkey and China.
Most of these goods entered the country through the five official terminals that mark the 1,600 km border with Iran, through the only border crossing that covers the 370 km border with Turkey and through the only port in Iraq, Um Kasar, in the extreme south.
In that port, according to the World Bank, there are “endless delays, high tariffs and abuses.”
“Even if everything is done according to the rules, (the process) takes a month and you have to pay storage costs of three zeros,” a Middle East-based importer told AFP.
To avoid bureaucracy, importers go “directly to see the militias or political parties,” explains an Iraqi intelligence agent. “They think it is better to lose $ 100,000 (in bribes) than the entire burden,” he adds.
Hashd al Shaabi, a coalition of pro-Iran paramilitaries integrated into the state, controls the land terminals and the port of Um Kasar, the most corrupt place in Iraq, according to these sources.
Other terminals with Iran are controlled by other factions of the Hashd, such as Asaib Ahl al Haq and the Hezbollah brigades.
– Cigarettes or tissues? –
In all these borders, parties and factions place customs officers, inspectors or policemen on their rope. They facilitate the passage of goods, as long as importers have paid in advance, or block those who did not go through the box, say different sources.
Officially, the Hashd denies it. But sources close to Asaib and the Hezbollah brigades explain to AFP the distribution system established in the port or in the same terminals mentioned by the customs officer and the intelligence agent.
“To import cigarettes, for example, you have to go to the office of the Hezbollah brigades in Jadriya (a neighborhood in Baghdad) and say that we want to cooperate,” says the intelligence agent.
The head of this well-oiled network is the “mujales”, the sworn customs agent in charge of controlling each load. “There are no mujales without affiliation” to a party or an armed group, said the source.
Once bribed, these double agents alter documents to change the nature, quantity or price of the products and reduce taxes.
For the importer questioned by the AFP, some may represent a saving of 60%. A particularly interesting gain on cigarettes that are taxed at 30% of their value and an additional 100% to officially protect local production.
Cigarette containers are often labeled “tissues” or “plastic,” allowing you to pay “$ 50,000 instead of $ 65,000” in fees, the customs officer says.
– “It is not normal” –
Mujales also have the power to modify the value of a charge on the import permit.
An official in Um Kasar says that he saw a load of metal bars pass so undervalued that tariffs of more than a million dollars were left at 200,000.
“Too much power is given to customs, it is not normal,” says the importer.
Sometimes, the customs agent assures, the pressure is too strong. “I am not corrupt but I have had to let charges pass without inspection by order of very powerful parties,” says one of them.
Sometimes it even happens that there is simply no charge. Forged documents are presented to the Central Bank authorizing payments in dollars to shell companies outside of Iraq.
A way to feed money laundering, say the customs officer and several officials of the Iraqi banking sector.
Bribes are also used to import normally prohibited goods.
An importer confesses to AFP that he paid $ 30,000 to a customs officer in Um Kasar to allow him to enter reconditioned electrical equipment, despite the fact that importing second-hand products is illegal.
He also acknowledges that he regularly pays a port police officer to alert him to “surprise” inspections. This officer has even offered, in exchange for more money, to inspect the competition.
– “A real mafia” –
Opportunities to pocket bribes are selling dearly, Minister Allawi argues.
“The allocation of junior positions in some terminals is negotiated at 50,000 or 100,000 dollars, sometimes much more,” he said recently at a public conference.
To achieve their ends, elected officials and militiamen have two assets: political influence and violence.
A customs officer in Mandali has experienced it firsthand. He tells AFP that he had to remove the seal he placed on a cargo from Iran because a mujales, belonging to the Hashd, forced him to do so.
The intelligence agent confirms: even his best informants give in. One of them gave up after several administrative suspensions for blocking goods from Iran at the Zerbatiya terminal, controlled by the Asaib Ahl al Haq militia.
“When he came back, he became a member of Asaib,” he says.
A senior official at the Border Authority says that he regularly receives calls from unknown numbers with express threats to those close to him.
“You cannot say anything because they would kill us, everyone is afraid,” says the customs officer. “It is a real mafia.”
The survival of the parties depends on them and, above all, the armed groups that can no longer reach into the defense budget as in times of the anti-jihadist war, says researcher Renad Mansour.
Since most are pro-Iran, they suffer from US sanctions against the great neighbor.
– Steal from the State –
In March, Washington blacklisted Al Khamael Maritime Services (AKMS), a shipping company operating in Um Kasar, accusing it of helping the Guardians of the Revolution, Iran’s ideological army, to “escape the inspection protocols “thanks to Shiite paramilitaries.
The United States also sanctioned two Iraqis and two Iranians linked to AKMS for smuggling and assisting the Iraqi Hezbollah and Lebanese Hezbollah brigades.
To loot the state funds, the competing groups unite “because they know that if one of them falls, the whole world falls,” Mansour told AFP.
“At a border post, up to $ 120,000 a day is distributed among various groups that are sometimes even enemies,” explains the researcher.
In February, two Asaib members were killed for “commercial reasons,” say sources close to Hashd.
But, in general, the unspoken rules of the cartel prevent this violence.
It is the State that pays the price for these fixes: it only receives “10-12% of the customs revenue that should reach 7,000 million dollars” per year, laments Minister Allawi.
And it is that, in addition to the Iraqi actors, Transparency ensures in its 2020 report that the main partners of Iraq, Turkey and China, are among the countries that least control corruption in their exports.
At the end of the chain, far from international exchanges, the impact of bribery is palpable.
“The Iraqi consumer pays more in cash for corruption,” a government official told AFP. And schools, hospitals and other infrastructures are not being built due to lack of funds.
– “You pay double” –
When he took office in May 2020, Prime Minister Mustafa al Kazimi made tariffs his workhorse to fill the coffers, with the price of oil at minimum.
In Um Kasar or Mandali troops were deployed and there was more rotation of officials to avoid the formation of corruption networks.
Since then, every day, the Border Authority announces the seizure of cargo for not paying tariffs and claims to have collected 818 million dollars in 2020. But the increase is minimal: in 2019 it collected 768 million.
For importers, intermediaries, and even government officials, these measures are a smokescreen.
Worse. Their expenses, they say, have increased because they now pay taxes but also to intermediaries to avoid retaliatory measures from the lords of corruption, even if they have all the documents in order.
“We actually pay double,” sums up an Arab businessman who has been importing in Iraq for a decade.
The only ones for whom nothing has changed are those with good contacts.
“You can bring amas or everything you want to Mandali. Without authorizations and without paying customs,” says an importer who has sent construction materials through without paying fees after Kazimi’s announcements.
The new troops sent to the place have no power, says a soldier who was stationed for a time in Mandali.
“All the police are involved, the importers flood them with money. On one occasion, we arrested a corrupt man and shortly after he was free,” he tells AFP.
– “Rotten fruit” –
The new campaign totally ignores the heart of the problem: the mujales.
“They are always there and this rotten fruit is going to corrupt the others,” says the official.
In fact, corruption has moved: instead of windows, it is now behind closed doors and in phone calls by secure applications.
For the intelligence agent, the recent campaign only complicates the work: “now they take more precautions.”
At the Baghdad airport, Hezbollah brigades – accused by Washington of regularly firing rockets at their embassy – have been forced to abandon their premises, a US high command told AFP.
“But his men can get on the planes and do whatever they want” in the duty-free zone, he says.
Ultimately, intermediaries will soon be able to bypass official terminals to pass imports through other parts of the borders.
They may even retreat to Iraqi Kurdistan, where tariffs and their payment to Baghdad are opaque, say the different actors questioned by AFP.
“There is talk of millions of dollars. A single dock in Um Kasar is worth the budget of an entire state,” says the intelligence agent. “They will not give in easily.”
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