Coll 17/18(2) 'Smuggling between Kuwait and Iraq' [‎31r] (61/889)

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NOTE*
At the request of representatives of
are considering what they could propose as thfe muyt pfaclTcal
means of effecting a control over dealings in foreign exchange*
(Throughout this note ”foreign exchange” is understood to mean
currencies outside the Sterling hlock t namelys dollars f Swiss
francs etc.)*
It appears to the Banks that no scheme is likely to meet
with the approval of all concerned or could constitute control
unless it embodies the following points:-
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P.Z.
561
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overtQent the l^anks
a) All future foreign exchange operations to be restricted to
the authorised banks with adequate penalties for any
infringeraent 9
b) The Customs Department to require exporters to produce a
Certificate from one of the authorised banks that the
relative exchange has been sold to them in every case where
the medium of exchange is other than one of those of the
sterling block, (the question of exchange arising from
other causes than export can be dealt with later)*
As the Bank of England will grant foreign exchange to
Iraqi interests for purpose of import into Iraq only and that
only to cover imports from the actual country whose currency
is concerned (viz. imports only from U.S*A* in dollars, or
from Switzerland in Swiss francs), it is suggested, as an
additional safeguard against attempts to re-export in
contravention of this condition, that in the case of all imports
in those currencies regulations should be framed to ensure that
all Customs Bills of Entry other than those retained by the
Customs Department themselves should be delivered to the Bank
handling the relative credits to be retained by them and that
under no circumstances should the Customs Department issue
copies to an importer unless his application is countersigned by
an authorised bank. This would need to be worked out in
detail with the Customs Department.
Further, although the following may not come strictly
within the province of the banks, it is thought that it should
be assumed that the Bank of England would not be willing to
release foreign exchange for the purpose of the import of non-
essentials into Iraq and it is suggested that, in order to
minimise difficulties for Iraqi importers, the Committee of
Supply should draw up a list of Iraq’s essential needs which
would be agreed between the two Governments. ^quests for
exchange to pay for any goods not on that list would require the
countersignature of the Committee of Supply before the authorised
banks would make special application to the ;ank of England
for such purpose.
It is desired to emphasise that the foregoing represents
personal ideas and that the local Managers here cannot commit
the banks to any definite undertakings without the prior
sanction of their respective Boards. Neither are they aware of
the future policy of the Bank of England in this matter and the
latter would, of course, have to be consulted.
In view of the desire expressed by you that a way should
oe found to deal with this whole question ^administratively anu
as the Banks naturally are not aware of the scope of
administrative powers, it would appear that they cannot proceed
further with the drawing up of a scheme until they are iniornea
/ whether