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I wrote a lengthy article on the situation around this time last year - http://www.theregister.co.uk/2003/04/09/iraq_its_d omain/ [theregister.co.uk]
The Alani brothers previously owned and ran the domain but they are now in a US jail for funding terrorists.
Since then several wide-boys have tried to get hold of the domain, and have all failed. Centr for example has had two applications from people claiming to be the representative of the Iraq domain.
Unlike Afghanistan, where the US-led adminsitration faked a letter to get hold of the domain, there has been no movement on Iraq's domain. And no one wants to talk about it either. At least not to me.
I've asked ICANN to tell me what, if anything, is going on and haven't heard a dickie-bird.
Whether this latest effort has any effect will be interesting to see. It is certainly time that the situation was sorted out.
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The Alanis are not in jail, and have been convicted of nothing. They are charged with knowledge that some PC parts they sent to Malta were later trans-shipped to Syria, but that has not been proven. Likewise, none of the other allegations have been proven either.
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You should address your question to "IANA" not ICANN - the two are separate, ICANN merely gets to do ICANN by virtue of a purchase order from the National Atmospheric and Oceanic Administration.
And you should then ask why and how the National Atmospheric and Oceanic Administration (a branch of the US Dept of Commerce) obtained the legal authority to contract-out to have a private company do what amounts to the recognition and un-recognition of who are nation-states.
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