The Trump administration seizes Iraqi funds… ready-made pretexts and a worrying government silence

The Trump administration seizes Iraqi funds… ready-made pretexts and a worrying government silence

4-26-2026

The administration of US President Donald Trump, or what is known as the US Treasury Department, seized Iraqi funds amounting to $500 million from oil revenues that were supposed to reach Iraq for use for internal purposes or to benefit from and distribute as salaries, which is the practice on a monthly basis, according to a mechanism that stipulates that the US Federal Reserve receives oil revenues and sends them to Iraq. However, what happened recently is an unjustified seizure, amid a worrying governmental silence, especially since the American pretext for seizing this money was not convincing at all.

The head of the organizing committee for the Belt and Road Movement, Hussein al-Karawi, told Al-Maalomah that “the American seizure of Iraqi funds, amounting to up to $500 million of the country’s revenues, is not a punishment of the Iraqi government or politicians. Rather, there are multiple pretexts for the Americans to control Iraqi money.”
He added, “There is an urgent need for the government to take action to liberate Iraqi funds from American control, while the current government is moving in line with the American project and accepting everything that comes from the White House.” He explained that
“there are ready-made pretexts for seizing Iraqi money, and Qatar, the UAE, and the National Bank of Jordan are reaping huge profits from Iraqi funds, with approximately $13 billion going to Iraq annually as a result of financial transfers.”
He pointed out that “the United States’ seizure of Iraqi money stems from the fact that the Iraqi people stood with the Islamic Republic and supported it in its war, especially after the religious edict issued by the religious authority to support the Iranian people and provide them with whatever assistance they could.”
For his part, former member of the parliamentary finance committee, Mu’in al-Kadhimi, told Al-Ma’louma that “the American decision to freeze or delay sending Iraq’s hard currency entitlements represents a serious violation of the financial and political sovereignty of the Iraqi state, as Washington is using the dollar as a tool of political pressure to impose its will on Iraqi decision-making.”
He added that “linking financial matters and Iraq’s monetary needs to the course of political agreements and government formation is a blatant and unacceptable interference, and this measure aims to destabilize the economy and affect the daily livelihoods of citizens.”
Al-Kadhimi stressed “the necessity of taking serious governmental and parliamentary steps to end American control over Iraqi funds, along with the importance of finding monetary alternatives and liberating the national economy from the grip of the conditions and restrictions imposed by the US Treasury Department.”

In a related development, legal expert Ali al-Tamimi explained to Al-Maalomah that “the Wall Street Journal’s recent report that the US Treasury Department refused to deliver a $500 million shipment of US banknotes to the Central Bank of Iraq, representing proceeds from Iraqi oil sales deposited at the Federal Reserve Bank of New York, is a decision lacking legal basis and constitutes a violation of the memorandum of understanding.”
He added that “the deposit of oil revenues into the IRAQ2 account at the Federal Reserve is based on a memorandum of understanding signed between the Ministry of Finance and the Central Bank of Iraq on June 2, 2014, which stipulates that the funds must be transferred to the Central Bank’s account within 24 hours of receipt. Therefore, withholding the shipment is a unilateral breach of the agreed-upon mechanism.”
He pointed out that “Security Council Resolution 1483 of 2003, which granted immunity to Iraqi funds, expired after the issuance of Resolution 1956 at the end of 2010. Iraq also officially exited Chapter VII on February 23, 2022, after paying full compensation to Kuwait, and there is no international basis justifying continued American control.”
He added that “the resolution constitutes an infringement on financial sovereignty, as Article 110/Third of the 2005 Iraqi Constitution stipulates that monetary policy is the sole prerogative of the federal authorities, and Article 27 of the Central Bank Law No. 56 of 2004 guarantees its independence. Using funds as a pressure tactic violates the principle of sovereignty in Article 2/1 of the UN Charter. Furthermore, the American refusal to release funds constitutes a violation of international law, as it is considered collective economic punishment, since Article 41 of the UN Charter limits the authority to impose non-military economic measures to the Security Council. The unilateral American action against an entire people violates international legitimacy.”

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