JPMorgan Chase International Bank Consortium to Restore Iraqi Trade Finance

November 12, 2003

Cleary Gottlieb represented JPMorgan Chase as coordinator of an international consortium of banks selected by the Coalition Provisional Authority (CPA) to reestablish trade finance in Iraq.  Following an international competition in which 58 banks from around the world submitted proposals, the JPMorgan consortium was awarded a mandate in August to assist the CPA and the Iraqi authorities in setting up the Trade Bank of Iraq and making arrangements for the issuance of letters of credit as needed in connection with the importation of goods and services into Iraq.   These arrangements will replace the United Nations-administered Oil-for-Food Program, which the U.N. Security Council earlier this year terminated effective November 22.  Agreements among the consortium, the CPA and TBI were signed in Baghdad today.

The TBI arrangements will give Iraq access to the trade finance necessary to import vital reconstruction and other supplies on a large-scale basis for the first time since before the first Gulf war. Authorized public or private Iraqi importers will be able to have TBI instruct the consortium banks to issue letters of credit for the benefit of foreign exporters of necessary goods. Prior to the recent Coalition military action, the U.N. Oil-for-Food Program allowed the financing of only a limited range of medicine and goods pursuant to the international sanctions then in place. The CPA has estimated that as much as $500 million of imports each month will require trade finance as Iraq recovers.

The other banks in the JPMorgan consortium include Australia & New Zealand Banking Group, Millennium Bank (Poland), National Bank of Kuwait, Standard Chartered Bank (U.K.), Credit Lyonnais (France), Bank of Tokyo-Mitsubishi (Japan), San Paolo IMI (Italy), Royal Bank of Canada, La Caixa (Spain), Standard Bank (South Africa), Akbank (Turkey) and Banco Commercial Portugues (Portugal).