Doc3960 Pending Orders and Regulations

COALITION PROVISIONAL AUTHORITY BAGHDAD ACTION MEMO March 14, 2004 THROUGH: DEPUTY ADMINISTRATOR FOR: THE ADMINISTRATOR FROM: E. Scott Castle, General Counsel SUBJECT: Pending Orders and Regulations This memorandum forwards for your signature a cable that describes CPA's proposed legislative agenda for the remainder of the occupation. Specifically the attached cable: • Explains the process by which orders and regulations are drafted and coordinated; • Explains the principles CPA applies in prioritizing its orders; • Groups the pending orders and regulations into three categories ("mission critical," "very important" and " important"); • Briefly describes the orders and their current status; and • Acknowledges the importance of carefully controlling the process whereby orders are coordinated w ith the Governing Council, in order to ensure continued meaningful review by that body. Two matters were suggested yesterday as additional subjects of orders: an advisory board for the Prime Minister on reconstruction matters and a mortgage financing facility. The former concept can be incorporated into the Central Government Functions Order, and the latter can be included within the Banking Law and Regulations. RECOMMENDATION: That the Administrator sign the proposed cable. Approve: ___ _ Disapprove: _ _ _ _ Approve with modification: __ _ ATTACHMENTS: Cable COORDINATION: Legal Advisor to U.K. Special Representative to Iraq/H. Mulvein (ok) UNCLASSIFIED UNCL.l\S S I FIE D PROG : 14 March 2004 DRAFTED : DPREGENT AUTHORIZED: LBREMER CLEARED : SCASTLE, JLECROY , DJONES EXEC CPA BAGHDAD SECDEF WASHDC SECSTATE WASHDC SECTREASURY WASH DC SECCOMMERCE viASH DC USUN NEW YORK WHITE HOUSE NSC WASH DC E . O.: 12958: N/A TAGS : PREL, PGOV, IZ SUBJECT : Promulgation of Coalition Provisional Authority (CPA) Orders During Remainder of Occupation 1 Summary . To date, I have issued 64 orders in my capacity as Administrator of the Coalition Provisional Authority (CPA) . Under the laws and usages of war, and consistent with relevant U. N. Security Council Resolutions, including UNSCRs 1483 and 1511 (2003) , these orders have the force and effect of law . The Transitional Administrative Law (TAL) recognizes these orders and continues their force and effect until rescinded or amended by duly enacted legislation . We have now completed a comprehensive review of all orders and regulations that CPA intends to promulgate during the remainder of the occupation . These initiatives will lay a proper legal foundation for a stable and free Iraq . 2 . The CPA Office of General Counsel (OGC) oversees the drafting and coordination of all orders, regulations and other legal instruments promulgated by CPA . a. Before any order is drafted, OGC carefully reviews extant Iraqi law to determine whether any revision is necessary and ensure that amendments are as narrowly drafted as possible , consistent with the CPA's obligations under occupation law . b . Draft orders generally are prepared by subject matter experts either within or in coordination with OGC, although the drafting of certain highly technical orders is accomplished by experts with U.S. executive agencies or other specialized organizations such as the N.Y. Federal Reserve . We are especially appreciative of consistently superb and timely support from the Offices of General Counsel in the Departments of Defense, Tre asury and Commerce and the Office of the Legal Adviser , Department of State . c . The drafting process entails close coordination with the relevant interim Iraqi ministers and their ministry staffs, and often includes sessions with Iraqi academic and business leaders . d . Once drafted, proposed orders are staffed t hrough an interagency process involving the Departments of Defense, State, Justice, Treasury and Commerce . The Coalition capitals in the United Kingdom and Australia also are provided copies for review and comment, and all commercial law reforms are staffed with the international financial institutions as well. Finally, most draft orders (including all economic and governmental reform orders) are coordinated with the Iraqi Governing Council. e . Followi ng the U.N.' s withdrawal from Iraq in August 2003, it has proven difficult to consult and coordinate with the U. N. on proposed CPA orders, where required under U.N. Security Council Resolution 1483. Accordingly, we request the assistance of the Department of State and the USUN in establishing a practice that will appropriately include the U.N. in the coordination process , consistent with U. N. Security Council Resolution 1483 and CPA's need to adhere to a firm schedule. In our v iew, such a practice cannot rely solely upon informal coordination in Iraq with the U . N. Secretary-General's Special Representative , due to the irregularity of his travel t o Iraq . Another solution must be developed to ensure the strongest possible legal basis for CPA' s commercial and government reform initiatives . 3. We have applied the following principles in prioritizing our efforts : a . The highes t priority is given to orders that create commissions , organizations or offices that will require time to establish, staff a nd begin fu nc t ioning; b . The next priority i s accorded to those orders that contribute t o transparency, honesty and accountability of the Iraqi government; c . The third priority i ncludes those orders that contribute to a stable, free ma rke t economy and that promote economic reconstructio n and the conditions f o r sustainable developm ent . 4 . Consistent with these principles, the pe nding o rders and regulations have been grouped i nto three categories : mission critical , very important and important . a . There are 14 mission critical orders curr ently pending p romulgati on . Failure to enact these o r ders during the o c cupation could jeopardize our efforts to stabilize, r e construct, and transform Iraq. (1) CPA will soon begin drafting an Election Commission Order and a Political Pa rties Order . I t is important that the Commission be established and that it promulgate election regulations by May 31 , to ensure integrity and transparency during the campaign a s well as fair a nd fre e elections that will be recognized a s such by the Iraqis and the international community . (2) In view of t he u ncertainty regarding a status of forces agreement o r a U. N. Security Council r esolution , a n order that provides adequ ate l egal protection for military, diplomatic a nd contractor personnel after the occupation must be in place. In the same vein, a "housekeepingu orde r is also needed to provide for the transition on 30 June and bring all e xtant o r ders and regulations int o conformi ty with the TAL. (3 ) In the national security arena, f our o rders will be needed. An order establishing the new Ministry of Defence is complete and i n fina l coordination with the Governing Council now. Orders establishing a new Iraqi Na tional intelli gence s ervice and regulations governing the armed forces, including militias, are being drafted. (4 ) In the general governance arena we will reconstitute the Board of Supreme Audit as an independent public agency empowered to enhance the economy, efficiency, effectiveness and credibility of the Iraqi government . A completed draft is in coordinat ion . We will also put in place an Organic Budget Order and Public Procurement Order . They are being designed to install budgeting and procurement mechanisms that are transparent, credible and embrace competition . Drafting is underway on both orders. (5) An Interim Governmental Powers Order has been drafted and coordinated, and will be signed this week . This order will clearly articulate the respective roles, authorities and responsibilities of interim Ministers, Governors and other local governing authorities. (6 ) An order is also needed to establish a new visa system as part of a broader border control program. This order is being drafted now by CPA . (7) Finally, a regulation is necessary to formally establish the Program Management Office (PMO) and prescribe its composition, authori ties and program management and acquisition funct i ons during the occupation (and facilitate its proposed transition to the Department of Defense) . The PMO is currently operating without a specific and comprehensive enabling regulation. This regulation has been drafted and is in coordination . b . Fifteen pending orders have been identified as "very important" . These orders will enable Iraq to maintain momentum in its progress toward an open and stable society. Many focus upon economic and commercial reform, while others deal with communications, general governance and judicial reform. (1) Drafting is underway on a revision to an earlier Banking LaVI that will facilitate commercial banking operations and support t rue market reforms . Banking Regulations are also being written that set fo rth detailed gui dance to implement the Banking Law . (2 ) Administrative Retail Registration instructions have been completed and are being coordinated with the Iraqi Ministry of Trade . These regulations will provide the procedu res for foreign investors to register to do retail business in Iraq pursuant to CPA Orde r No . 39. (3) A Labor Law Order has been drafted and is being coordinated . This wi ll provide greater flex ibility for job creation, labor mobility and equai treatment for Iraqis and non - Iraqis. (4) A Ba nkruptcy Law modernizing Iraqi dissolution, liquidation and bankruptcy proceedings has been drafted. Coordination is ongoing . (5) A Secured Transactions Order has been drafted and is under coordination. This order wiil provide for a r egistry and specific protections for prope rty rights . (6 ) Orders dealing with intellectual property ma tters including pate nts, trademarks, t rade names and copyrights are being drafted and will soon be coo rdinat ed with Iraqi governmen t officials prior to interagency coordinati on. (7) An o rder dealing with Competition Po l icy setting forth anti- monopoly rules will b e d r afted. (B) A Pension Reform Order will be drafted to permit private pension funds and update extant pension policies . (9) A Cen tral Government Functions Order will create an infrastructure to support the Prime Minister and Council o f Ministers . It will include t he Iraqi Security Council , the senior governmental body that will establish national secu rity policies and p r iorities . This order ha s not been drafted. (10) An order establishing an independent commission for licensing and regulating tele communications, broadcasting and other media has been drafted and coordinated, and i s expected to be signed this week . (11) An order establishing the Iraqi Broadcasting Network as Iraq' s public services broadcaster also has been drafted and coordinated, and is expected to be signed this week. (12) A "Whistle Blower" Protection order has been drafted to protect those who come forward with evidence of corruption and official wrongdoing . Coordination is underway . (13) A draft revision of the order creating the Iraqi Civil Defense Corps (!CDC) has been completed; t he revision would provide for the !CDC ' s partici pation in counterinsurgency operations. Coordination is underway. (14) An Omnibus Judiciary Order is needed to create the administrative structures to transfer the judicial support functions from the Ministry of Justice to the Judicial Council . This order has not been drafted . c. Another 28 orders would significantly contribute to establishing a basic legal framework i n Iraq. Again, most focus on commerc i al and economic reforms . (1) Fou r commercial reform initiatives have been drafted and received interagency and international input : Reconstruction Levy Instructions, Consolidation of State Owned Enterprises, Disposition of Mi litary Industrial Company Assets and Personnel , and Iraqi Interim Securities Law . All are being coordinated . (2) Five commercial reform initiatives are currently being drafted : an anti-money laundering law, a comprehensive revision of Securities Law, Commercial Agency Regulations, Public Debt La1-1, Consumer Protection and a comprehensive revision of Iraq' s Company Law. (3) We have plans to prepare additional orders in the commercial reform arena dealing with Insurance Law, Social Security Law, Transportation Customer Funds, a National Oil Company Law, a Commercial Leasing Law, comprehensive revision of the Tax Law, a Funds Transfer Law and an International Trade Negotiation Law . (4} In the national security arena, we have completed a draft revision of the New Iraqi Army Order that authorizes Coalition Forces to exercise command and control of the IAF and permits its use in counterinsurgency operations. Coordination is underway . (5} An order establishing the Iraqi Radioactive Source Authority, a regulatory agency to monitor and enforce regulations governing ionizing radiation usage, has been completed . Coordination has not begun . (6} Drafting is underway for the Iraqi International Center for Science and Industry, an organization designed to employ Iraqi scientists, technicians and engineers who were employed in WMD programs . (7) A weapons registration order has been d rafted to register and regulate the importation and possession of weapons by security companies and contractors . (8) An order decentralizing the power to appoint and remove academic officials will be drafted. (9) A Civil Service Order will be drafted including merit management and an oversight commission . (10} An order authori zing covert investigations with judicial oversight is being considered for d r afting . (11) A traffic code is currently being drafted to ensure that regulation of motor vehicle operations is not a source of graft and corruption for lower level autho rities . 5. Although this is a very ambitious plan, I am convinced we will be able to have all of these orders and regulations completed by 30 June . An area of particular concern is the Iraqi Governing Council ' s ability to absorb this extraordinary legislative agenda . Nonetheless , we recognize that coordination with the Governing Council is necessary to ensure the legal sufficiency and long- term viability o f CPA's orders . We will carefully monitor this process and continue to accord the Governing Council an opportunity meaningfully to review and respond to the orders in a prioritized sequence, and at a rate t ha t does not e xceed its capacity. BREMER Category Sublect Political Transition Election Commission Political Transition Political Parties Order Political Transition Housekeeping Order National Security Order 17 National Security Ministry of Defence National Security Iraqi Security Council General Board of Supreme Governance Audit Economic and Organic Budget Law Commercial Law Order Reform PENDING ORDERS AND REGULATIONS As of 14 Mar 04 Description Status MISSION CRITICAL Establishes a commission thai will develop the rules and procedures for To be drafled based on TAL. conductinQ fair and free elections. Establishes rules for the establishment, funding and conduct of political To be drafted based on TAL. I Parties. Conforms all other orders and regulations with provision in TAL To be drafted based on TAL. reQardinQ role of transitional Iraqi Qovernment as successor to CPA. Revise to provide adequate legal protection to diplomatic, military and To be drafted. contractor personnel beyond occupation. Establishes a new Ministry of Defence, which will be wholly separate and Draft completed. Coordination distinct from the MoD dissolved under CPA Order Number 2. Transfers underway. the New Iraqi Army established under CPA Order Number 22 to the new MoD and disestablishes the Defense Support Agency created by CPA Order Number 42 (although it does transfer personnel/contractors currently employed/used by DSA to the new MoD). Provides that the interim Minister of Defence will be appointed by the Governing Council with the agreement of the Administrator. Sets out the elements of the MoD and the senior positions. Creates the senior governmental body as well as the decision mechanisms used by that body to establish national security policies and priorities. Reconstitutes the Board of Supreme Audit as an independent public agency empowered to enhance the economy, efficiency, effectiveness and credibility of the Iraqi government. Promulgates the Organic Budget Law, which provides limits on expenditures. exemptions from such limits. and allocations of contingency funds. To be drafted. Draft completed. Coordination underway. Drafting underway. Page 1 of 7 Economic and Public Procurement Commercial Law law procurement. Reform National Security Provides a transparent and competitive regime for government General Governance Establishment of the Iraqi National Intelligence Service Establishes a new intelligence service for Iraq. Director General will be appointed by the head of government for a set term. IN IS will provide strategic intelligence to Mol and MoD. Issue of authority to detain individuals is still under discussion Interim Governmental Defines respective authorities and responsibilities of Governing Council Powers and interim Ministers, Governors and Deputy Governors, Provincial and Local Councils, Mayors, and Chiefs of Police, and specifically delineates powers that are reserved for centralized execution, and powers that are devolved for localized execution. The order would remain in effect from date of signature until revised or rescinded by the Transitional Administrative Law or legislative enactment of the new Iraqi government. To be drafted. OGA drafting charter. Draft completed. Pending final coordination with GC. National Security Regulation of Armed Forces Within Iraq Prohibits Armed Forces. to include Resistance Forces (e.g., the Draft under revision. Peshmerga and Badr) and private security firms, from operating within Iraq except as provided for in the order. Exceptions include Armed Forces under Coalition control; security firms contracted by Coalition: and private security firms licensed by the Mol with no more than 100 armed employees. Provides that Resistance Forces that propose a transition plan accepted by the CPA by 1 May shall not be deemed to violate the prohibition, if they abide by the plan. Sets forth policies for transitioning Resistance Forces. CPA Program Management Formally establishes Program Management Office and describes its Draft completed. Coordination Administration Office composition, authorities, and program management, financial underway. management and acquisition functions. General Governance Revision of visa system Establishes a new system for control of entry into Iraq by non-lraqis To be drafted. through new categories of entry visas. This will provide better border control and will constitute an integral part of the broader immigration control policy. Page 2 of7 VERY IMPORTANT General Governance Central Government Functions Order Establishes an office to support the Prime Minister and cabinet in developing and coordinating policy and providing administrative support. To be drafted. General Governance Iraqi Communications Establishes an independent commission responsible for licensing and regulating telecommunications, broadcasting and other media in Iraq. Submitted for signature. and Media Commission General Public Service Establishes the Iraqi Broadcasting Network as the public service Governance BroadcastinQ broadcaster for Iraq. Submitted for signature. Economic and Revisions lo Banking Revises Banking Law promulgated under Order 40 to facilitate Drafting underway. Commercial Law law commercial banking operations in support of true market reforms. Reform Economic and Banking Regulations Provides detailed guidance implementing Banking Law. Drafting underway. Commercial Law Reform Economic and Labor Law Amends existing law to provide far greater flexibility in job creation, Coordination underway. Commercial Law employment conditions and labor mobility, including equal treatment of Comments due March 16th I Reform Iraqis and foreigners. Economic and Retail Registration Provides procedures for registry or foreign investors intending to engage Draft completed. Coordination Commercial Law Regulations in retail business in Iraq. with Ministry ongoing. Reform Economic and Bankruptcy Law Amends existing law to modernize dissolution, liquidation and Coordination underway. Commercial Law bankruptcy proceedings and creditor rights protection, while preserving Interagency comments due Reform aspects of existinq law that are functional but unused. March 8th. Economic and Secured Transactions Provides for a registry and set of rules to ensure that property rights are Coordination underway. Commercial Law Law protected. Comments due March 12th. Reform Economic and Intellectual Property Amends existing law to strengthen protection of patents, trademarks, Drafting underway. Commercial Law Law trade names and copyrights. Reform Judicial Reform To be drafted. Omnibus Judiciary Order An overarching order dealing with the organization of an independent judiciary, judicial salaries, qualifications and appointments, security and administrative support. Page 3 of 7 National Security Revision to Order No. CJTF-7 proposes expanding !CDC's counterinsurgency roles. Removes Draft completed. Coordination 28, Iraqi Civil Defense limitation on tasking of I CDC and provides that Coalition Forces will task underway. Corps (ICDC) the ICDC and makes other revisions necessary to reflect possible inclusion within MOD. Economic and Competition Policy Establishes anti-monopoly policies. To be drafted. Commercial Law Law I Reform Economic and Pension Reform Law Amends existing law to update pension policies and permit private To be drafted. Commercial Law pension funds, deductibility of contributions, and generally updating Reform I pension policies. General Whistle Blower Protects persons who come forward with evidence of corruption and Draft completed. Governance Protection official wrongdoing by providing civil penalties for retaliatory action and [permitting criminal sanctions in eJJregious cases. Page 4 of? - --------------------- IMPORTANT National Security Revision to Order No. CJTF-7 proposes using Iraqi Armed Forces (IAF) (fonner1y NIA) in Draft compleled. Coordinalion 22, New Iraqi Anmy counter-insurgency roles. requiring elimination of the prohibition in Order underway. (NIA) 22 against use of the IAF in internal (law enforcement) roles. Draft revision expands internal operational roles for IAF. provides for operations by IAF under the control of the Coalition Forces. extends legal protections for IAF members when conducting operations and retains Administrator's control of IAF employment. Economic and Anti-money laundering Provides rules and procedures to prevent and counter money laundering Drafting underway. Commercial Law law activities. Refonm Economic and Reconstruction Levy Provides detailed guidance for implementing Reconstruction Levy. Commercial Law Instructions signature. To be submitted to Minister for Refonm Economic and Insurance law Provides an insurance regime for Iraq. Draft expected mid-April Commercial Law Reform Economic and Social security Law Commercial Law Establishes comprehensive social security scheme including unemployment compensation and limited welfare support. To be drafted. Refonm General Governance Revision to Order No. Although Order No. 45 has been signed into law, CPA is receiving 45: Non-Government suggested revision designed to enhance the security of Iraq while Organizations (NGO) facilitating the participation of NGO's in Iraq. Order under review for possible amendment. Economic and Disposition of Military Authorizes reassignment of employees and assets of military industrial Draft completed. Coordination Commercial Law Industrial Company companies to other SOE's. underway. Refonm assets and personnel Economic and Consolidation of State Provides procedures for consolidation and merger of SOE's into Commercial Law owned enterprises ministries and other SOE's Reform Economic and Commercial Law Law Order Reform Iraqi Interim Securities Builds upon existing Iraqi securities law by applying certain aspects of modern securities law to facilitate transition to a market economy. (An entirely new securities law will subsequently be prepared to complete the legal framework for a market economy). Coordination underway. Comments due March 9th. Coordination with Iraqis ongoing. Page 5 of 7 Economic and Public Debt Law Provides rules and procedures for issuance of government bonds. Commercial Law Reform Economic and Comprehensive Commercial Law Revision Securities Comprehensive revision of securities law to provide the legal framework for a robust and transparent securities market. Reform Law Economic and Transportation Commercial Law Customer Funds Establishes funds that will be financed through the collection of transportation-related fees, such as sea port charges and air over night Reform fees. Economic and National Oil Company Creates the Iraqi National Oil Company Commercial Law Law Reform Economic and Commercial leasing Commercial Law Jaw Provides procedures to ensure retention of property interests in leasing arrangements. Provides for rights of leasers or leases. Reform Economic and Tax Law Comprehensive revision of Iraqi tax law. Commercial Law Reform Economic and Regulations for Implements Order 39 and amendments to Company Law with regard to Commercial Law Commercial Agency Commercial Agency. Reform Econo mic and Commercial Law Company Law Comprehensive revision of Iraqi company J aw, designed to facilitate (Comprehensive infusion of capital, implement Order No. 39, provide for establishment of Reform Revision) foreign-owned corporations and remove unnecessary state controls. Drafting underway. Draft being revised by SEC. To be drafted. To be drafted. To be drafted. Research underway. Drafting underway. Drafting underway. Economic and Consumer ProJection Provides basic rules for protection of consumers. Initial draft compleled by Iraqi Commercial Law attorneys from University of Reform Baqhdad. Under review. Economic and Funds transfer laws & Establish rules and procedures including reporting requiremenls for lhe To be drafted. Commercial Law Regs transfer of funds into and out of Iraq. Reform Economic and International Trade Commercial Law Negotiation Law participation. Sets forth procedures for conducting trade talks to include privale seclor To be drafted. Ministry of Trade engaged in policy review Reform National Security Draft complete. Iraqi Radioactive Source Authority Establishes a regulatory agency, under the Ministry of Science and Technology for administralive purposes only, to implement, monitor and enforce regulations for beneficial uses of ionizinq radiation. Page 6 of? National Security National Security General Governance General Governance J udicial Reform Judicial Reform - - - - - - -- ------------- ------------- ---- .. . . Weapons Registration Creates Iraq-wide weapons control structure based on weapons badge Policy or card. Addresses all persons who wish to possess weapons in Iraq, including Coalition Forces. Indicates which persons require a badge/card to possess a weapon, which do not, provides for revocation or suspension of the card/badge, and describes effect of revocations. Iraqi International Center for Science and Industry Higher Education Civil Service Law Investigations Order Traffic Code Order US and UK will sign an international agreement forming this inter- governmental organizatrion to provide grants for projects that will employ Iraqi scientists, technicians and engineers formerly associated with WMD projects in projects for medical, commercial or other non-WMD related purposes. Revise existing regulations to streamline and decenmtralize the appointment and removal policies for university presidents and deans. Establishes a comprehensive civil service structure to include merit manaQement and an oversiqht commission. Authorizes covert investigations under judicial oversight including wiretapping and electronic surveillance. Sets forth standards, procedures and aJlproval authorities. Creates a new traffic code and court system, including licensing and reqistration procedures. Draft completed. Coordination underway. Drafting underway To be drafted. To be drafted. To be drafted. Drafting underway. Page 7 of 7