US bars 14 Iraqi banks from transferring US dollars to Iran
A man counts wads of US dollars on a money-counting machine at a currency exchange shop in Baghdad. Photo: Reuters
Baghdad (IraqiNews.com) – US officials said that the United States barred 14 Iraqi banks from conducting US dollar transactions as part of a crackdown on transferring US currency to Iran and other sanctioned countries, The Wall Street Journal (WSJ) reported.
The report illustrated that the ban was imposed by the Treasury Department and the Federal Reserve Bank of New York.
The step highlights the ongoing efforts to lessen Iran’s access to international financial networks.
The primary objective of the US sanctions is to curtail Iran’s ability to access US dollars through Iraqi banks. By targeting these financial institutions, the US hopes to disrupt the flow of funds that could potentially be used by Iran to support activities contrary to US interests, BNN Breaking reported.
The sanctions are part of a wider strategy to apply economic pressure on Iran and prevent the country from engaging in illicit financial transactions that could fund destabilizing activities in the region, BNN Breaking added.
Iraq signed an agreement recently with Iran to barter Iranian gas for Iraqi crude oil to ensure a smooth flow of the supplied gas and help avoid the US sanctions imposed on Iran, according to the Iraqi News Agency (INA).
During a meeting with Iraqi officials in the energy sector a week ago, the Iraqi Prime Minister, Mohammed Shia Al-Sudani, noted that the US sanctions and non-compliance with the gas dues payment mechanism agreed upon in 2018 caused a 50 percent reduction in gas supplies from Iran, which negatively affected electricity production in Iraq.
Two weeks ago, The Iranian Minister of Economy, Ehsan Khandouzi, revealed that Iraq has pledged to facilitate Iran’s access to its frozen assets in Iraq, according to the Islamic Republic News Agency (IRNA).
The Head of the Iran-Iraq Joint Chamber of Commerce, Yahya Al-Eshaq, mentioned earlier that Iraq has paid all dues of $10 billion to Iran, Al-Arabiya News reported.
Al-Eshaq elaborated that Iraq has paid its overdue debts to Iran through the Trade Bank of Iraq (TBI), and the two countries have agreed that the money will be used for the purchase of goods that are not included in the embargo imposed on Iran, such as medicine, IRNA reported.
Talks between the Iraqi Foreign Minister, Fuad Hussein, and Blinken during the Global Coalition to Defeat ISIS Ministerial Opening Session held in Riyadh led to an arrangement regarding financial dues between Iraq and Iran, according to Sky News Arabia.
Iraq heavily relies on gas imports from Iran but has recently invested in many projects to start taking advantage of flared gas and using renewable energy to generate electricity.