RFP and Trade Bank Questions and Answers
· When will responses to the RFP be made available to the public? After the extended August 11th deadline, or after selection of an operating consortium?
Responses will be made public after selection of an Operating Consortium. As noted in the RFP, information in the proposal that is specifically identified as proprietary or confidential will not be made public.
· What is the judicial standing of the CPA? Is the CPA permitted to incur financial liabilities?
The Coalition Provisional Authority (CPA) is an entity, distinct from the governments of Coalition Member States, that is authorized to exercise governmental authority in Iraq pursuant to the law and usages of war and relevant United Nations Security Council Resolutions, including Resolution 1483 (2003).
In exercising legislative, executive and judicial functions in Iraq, the CPA may incur financial liabilities on behalf of and for the benefit of the Iraqi people. Long term liabilities may bind the successor government of Iraq, if the successor government ratifies the obligation or arrangements are otherwise made by which the successor government is bound to honor obligations entered into by the CPA for the benefit of people of Iraq.
Details about the exact scoring system that will be used will not be publicly released. However, bids will all be evaluated according to an identical set of scoring criteria.
Confidentiality will be protected through the execution of Non-Disclosure Agreements that each member of the Selection Committee, the Panel of Experts, and other individuals who are provided access to bids made by prospective Operating Consortia will be required to sign.
No.
The CPA acquisition is being issued under the authority of the CPA as set forth under applicable international law.
The Trade Bank of Iraq is an independent public entity established by the CPA under applicable international law.
The Trade Bank of Iraq is a trade financing facility only and not a “bank” as is commonly understood in the context of commercial banking law.
· There was an article in Thursday’s edition of the Financial Times (July 24) in which Mr. Bremer was quoted as saying that the two largest state banks would be fully operational next week, allowing Iraqis to cash checks. “Management contracts would be given to foreign banks.” We would greatly appreciate clarification on whether this would form part of the trade bank RFP or whether there would be separate RFPs for these state banks.
The RFP that was issued by the Coalitional Provisional Authority on July 24 is only related to services to be performed for the Trade Bank of Iraq. The RFP does not cover any other institutions and there are no plans to expand the RFP’s coverage to include other institutions.
· Can the CPA please provide us with the current telecommunication capabilities that would be made available to the bank provider or OC that wins this bid prior to the full build-out of the TBI infrastructure? What will be the availability by October 1? Will the CPA assess a usage charge to the provider?
A surcharge is expected to be imposed on telecommunication equipment and service. CPA is currently investigating the expected dollar amount this will involve. This amount will depend in part on the number of individuals employed by the institutions that are a part of the OC.
· Can the CPA provide more detail with regards to security commitments prior to full transformation into a standalone TBI operating entity? Can we assume that full offices in secure CPA space will be made available at no cost to the provider until such a transformation takes place? How much space is available for the provider's use during these initial stages of the project?
We are in the process of identifying space for the TBI, which will also be available for the provider’s use. We anticipate that the space will be secure, though CPA cannot assume specific responsibility for ensuring security at all times given current conditions in Iraq. Security that the OC believes it needs in additional to the security provided by the CPA will be a cost borne by the provider.
· Should a hardcopy of the annual report accompany each of the 10 copies of the RFP submission?
Yes, one original and nine copies is acceptable.
· Who will be responsible for identifying and hiring Iraqi staff for the TBI? (Section 5 – Team Organization)
The Coalitional Provisional Authority will identify initial Iraqi staff for the TBI.
· Will TBI be requesting confirmation of all its L/Cs? (Tab A – Statement of Work, Bullet 5, subheading C)
It is anticipated that the consortium banks will confirm all L/C issues by the TBI until such time as the TBI is deemed creditworthy by international banks on its own credit, taking into account any associated political risks of its owner, the Iraqi government.
· We believe that we could actually put together a competitive proposal regarding the training of Iraqis in various international economic and financial areas in which they will need to be fluent in order to successfully run the bank. However, in the advertisement I read, you seem to be requesting proposals from consortia only with respect to all activities and only from financial institutions.
All bids will be considered based on their ability to provide all of the services requested in the RFP.
· Has the Trade Bank of Iraq established a Treasury Management and Controlling Function (including a general ledger system), or can we consider that Treasury and Controlling is operational by the time LC's are to be processed on behalf of TBI?
The operating consortium will be expected to provide third party L/C processing services on behalf of the TBI. Effectively, the operating consortium, or the operating consortium member providing the third party L/C services will provide all accounting, management and control functions for the TBI until such systems have been established and the TBI staff have been trained.
· Does Trade Bank of Iraq have an established Credit approval process in place, or can we expect that this will be in place by the time LC's are to be processed on behalf of TBI?
The operating consortium, or the operating consortium member providing the third party L/C services will provide any credit approval process on behalf of TBI management, and subject to its approval, until such a process has been established.
· Does the OC have to take on the responsibility to set-up and provide training for abovementioned functions? Is this part of this Trade RfP?
Yes, to the extent necessary to ensure the effectiveness of the Trade Bank of Iraq.
· Does TBI have the financial resources to support its confirmation of L/Cs? (Section 9 – APA Agreement)
All TBI resources for public sector import transactions will originate in the DFI. For private sector import transactions, TBI resources will originate from the private sector importers.
· Will TBI perform due diligence on its clients to address KYC, AML, and OFAC requirements? (Tab A - Statement of Work)
The operating consortium, or the operating consortium member providing the third party L/C services, will provide such due diligence until the TBI staff has established such a system.
· Which entity will be the actual exporter of oil from Iraq? Will the resulting sale proceeds be paid directly to that entity? (Tab A - Statement of Work, Bullet 8)
The oil exporter will be SOMO. Sale proceeds are to be paid into the Development Fund for Iraq.
· Will TBI provide authorizations, board certificates, and any other necessary documentation to support its legal and regulatory requirements? (Tab A - Statement of Work)
Yes. The TBI will work with the Operating Consortium to make sure the necessary documentation is in place.
The CPA and OC will be the parties to Agency Processing Agreement, which will govern the operating relationship between the CPA, OC and the Trade Bank. If the TBI enters into agreements with other parties, the President of the Trade Bank will sign on behalf of the TBI.
It is not possible to predict future actions, as this depends on the requirements of the importer buying Iraqi petroleum and natural gas products. For the sales occurring in the last few months, export L/Cs were used.
Proposals should include ample technical detail. The Selection Committee is expected to be comprised of approximately five individuals. As stated in the RFP, the Selection Committee will be chaired by the Finance Minister / President of the Trade Bank of Iraq. This may be delegated to a nominee of the Minister of Finance. He/she will be assisted by a panel of experts drawn from the international community. The Selection Committee will recommend to Ambassador Bremer of the CPA the bank or bank consortium best designed to assist the Trade Bank in becoming operational.
The Panel of Experts will be comprised of individuals with strong professional qualifications and who can provide expert opinion to the Selection Committee. Further details about the Panel of Experts are available on CPA’s web site. The Selection Committee will make all decisions about selection of the Operating Consortia.
Q&A’s (without submitter’s name) will be posted to http://www.cpa-iraq.org/ if they raise an item of interest to all bidders.
The focus of this section is to determine the bank’s or bank consortium’s international presence. This information is one way to gain knowledge about experience in and commitment to its international presence.
The OC may indicate their preference, but should submit any proposed contract with their submission. Note in section 9 of Format of Written Proposals, final negotiations between parties on the structure and pricing of the services provided will occur based on the OC submitting a copy of the proposed Agency Processing Agreement between the bank (or bank consortium) and the CPA.
No, we do not have a boilerplate Agency Processing Agreement.
Escrow accounts could be used for the purpose of holding cash collateral related to private importers.
This is not being contemplated at this time. The focus of the TBI’s activities will revolve around commercial L/Cs.
No, only the OC will be required to have electronic L/C processing capabilities.
Although not listed in the RFP, the OC can include a general ledger solution. The Trade Bank of Iraq is a de novo institution and will need such a solution.
Such interfaces are not required.
The President of the Trade Bank of Iraq will be the Acting Minister of Finance or the nominee of the Minister of Finance.
Yes.
As Iraqi imports are expected to come from many different countries, the applicant should be prepared to issue/confirm L/Cs in currencies other than US$.
The CPA continues to work to establish a secure environment within Iraq. However, the CPA cannot assume any particular responsibility for the security of specific individuals employed by banks or the facilities of those banks that are a part of the OC apart from its general intention to improve security conditions. CPA is working with the Ministry of Finance and Oil to identify suitable space for the Trade Bank facilities.
No. The RFP has not been prepared in direct consultation with any banks.
Such a provision could be provided for in the Agency Processing Agreement.
The deadline has been extended until 5:00 p.m. Eastern Daylight Time on August 11.
This is a legal issue for applicants to assess for themselves.
The estimates provided in the RFP are non-official estimates only. Applicants should make their own estimates based on any information that they might have at their disposal.
There is no preference for the nationality of any particular participant of a bidding consortium. All applicants will be considered on the basis of their ability to provide the full set of services set forth in the ten selection criteria.
There is nothing to preclude a bank from doing this, but we assume that it is acceptable to the other members of your operating consortiums and that other members have been fully informed that a bank may be participating in more than one consortium.
· If our bank is providing L/Gs for beneficiaries of Iraq, what is the tender type and the tenor?
This information is not known at the present time.
· If our bank provides the FX or banknotes services we need to know the amounts and frequency?
It is not anticipated at this time that these services will be needed.
· Would the Trade Bank require an account to be opened with any member of the OC?
The RFP does not require the TBI to open an account with any member of the OC.
· What would be the typical transaction that we would be working on?
The typical transaction is anticipated to be issuing or confirming a letter of credit on behalf of an Iraqi importer.
· Is this bank guaranteed by the US, World Bank, or International Bank for Reconstruction and Development (IBRD), if so, do we need to extend our limits from our end in respect to:
- L/Cs and L/Gs
- Money Markets or FX Limits
The Trade Bank of Iraq is not guaranteed by the United States Government or by the International Bank for Reconstruction and Development (IBRD, also known as the World Bank).
· When will contacts (names and numbers) and full banking relationships with the relevant control documents with the Trade Bank of Iraq be available? For example we would need booklet of the authorized signatures, exchange BKE on SWIFT (bilateral keys exchanged), articles of association or incorporation if possible.
Articles of association and bylaws for the Trade Bank will be available when promulgated. The TBI will work with the Operating Consortium to make sure the necessary documentation is in place. Regarding SWIFT, the TBI is a de novo institution and does not have a SWIFT account as of yet.
The RFP does not require a certain level of capital participation. Regarding a consolidated RFP, focus should be placed on meeting the information content as required by the RFP. If filing a consolidated RFP meets the requirements, then it is acceptable.
The Trade Bank is a de novo institution that will have Iraqi staff and premise. Please refer to Format of Written Proposals, Section 6 of the RFP for information related to IT and communications needs.
Effectively, the operating consortium, or the operating consortium member providing the third party L/C services will provide all accounting, management and control functions for the TBI until such systems have been established and the TBI staff have been trained.
Yes
The future of the public sector banks is unknown at this time. Their capabilities are being assessed as is their future interaction with the Trade Bank.
The estimates provided in the RFP are non-official estimates. Applicants should make their own estimates based on any information that they might have at their disposal.
Possible LC applicants are the CPA, funded Iraqi Ministries and the private sector. Please refer to http://www.cpa-iraq.org/regulations/ for information on the DFI and Program Review Board.
No. This is to maintain the highest degree of fairness. However, questions can be sent to the electronic email address with a request that they not to be posted publicly. There will also be a Q&A session in Bahrain. Also note that the Agency Processing Agreement is to be submitted in draft only.
This is in process.
This is assuming that there is one lead institution in the Operating Consortium. The Agency Processing Agreement that is required to be submitted in draft determines accountability from a contractual standpoint.
It is expected that recourse may be sought under U.S. law. A final determination, however, will be included by the Agency Processing Agreement.
There are no requirements. Note that the OC should address Section 7-Credit Structures in its submission to the RFI.
Regulators may be referred to teresa.rutledge@occ.treas.gov.
Questions regarding support from bilateral U.S. guarantee/insurance agencies for Iraq such as the Export-Import Bank of the United States and the Overseas Private Investment Corporation should be addressed directly to those agencies.
Pursuant to U.N. Security Council Resolution 1483, $1 billion in unencumbered funds has already been transferred from the Oil-for-Food Account to the Development Fund for Iraq (DFI). The remaining funds in the Oil-for-Food Account will be transferred to the DFI shortly after November 22, 2003, less funds sufficient to meet anticipated payments under priority contracts in effect on that date. Any funds remaining in the Oil-for-Food Account after all payments have been made on all priority contracts will be transferred to the DFI at that time.
The $5 million in paid-in equity consists of funds from the Development Fund for Iraq.
Decisions regarding the sale and export of petroleum products from Iraq will be made by the appropriate Iraqi officials, therefore the CPA is not in a position to advise regarding the likely export destinations and counterparties.
At the outset, it is only expected to operate with short term sight L/Cs. However, as Iraqi financing needs evolve, transactions of acceptable form and tenor will be structured. While the RFP does not anticipate large project related L/Cs during the contract period, it does not foreclose the possibility that the need for such services could arise.
The expectation is that the OC will bring the TBI into operation within a few weeks of finalization of the APA and train the Iraqi staff to a level conducive to independent operation within the period of the contract. To the extent that the applicant thinks it is necessary for the OC to supply such services to achieve these goals, the applicant should include this in its proposal.
The applicant should specify which technology it is wiling to transfer and under which terms.
The estimates provided in the RFP are non-official estimates. Applicants should make their own estimates based on any information that they might have at their disposal.
It is not contemplated that permits and/or licenses in other countries will be needed. If so, the OC will not be expected to obtain these.
Responses should address such issues to the extent that they are necessary to fulfill the specified RFP requirements.
No.
This question is being asked in relation to any credit structure the respondent wishes to propose for the issuance/confirmation of L/Cs on behalf of the trade bank, including those involving credit terms on an other-than-cash basis.
Yes.
The Treasury cannot make such a commitment.
DFI funds will be available to reimburse the L/C banks and the issuance and operational fees of the OC for CPA and Iraqi public purchases effectuated through the Trade Bank of Iraq. DFI funds will not be available to reimburse the L/C banks and issuance and operational fees of the OC with respect to private purchases.
The heading is sufficient.
Yes.
Appendices are acceptable. The respondent should decide which information should be presented in the body of the response and which should be presented in appendices.
Yes; however, any electronic submission must be received by the deadline.
Yes; however, each answer must be clearly labeled to indicate to which category/section it is providing an answer.
· What is the relationship between the DFI and the "Central Bank of Iraq/Oil Proceeds Receipts Account"? Are they one and the same?
· What is the relationship between the "Central Bank of Iraq/Oil Proceeds Receipts Account" and "Central Bank of Iraq/Iraq Development Fund"?
· Is there one account at the FRBNY entitled "Central Bank of Iraq" with two sub-accounts, one entitled "Oil Proceeds Receipts Account" and another entitled "Iraq Development Fund"? If so, why was the account structured in this manner?
The Federal Reserve Bank of New York was requested by Ambassador Bremer, as the Administrator of the Coalition Provisional Authority responsible for the temporary governance of Iraq pursuant to the authority vested by the President of the U.S., to open an account for the Central Bank of Iraq entitled "Central Bank of Iraq/Development Fund for Iraq" and an account entitled "Central Bank of Iraq/Oil Proceeds Receipts Account". Each account has its own ABA routing number. The relationship between the accounts are as follows: All funds received in the Central Bank of Iraq/Oil Proceeds Receipts Account are to be transferred - - 95% to the Central Bank of Iraq/Development Fund for Iraq and 5% of such funds to the United Nations Compensation Fund established in accordance with UNSC Resolution 687 (1991).