Iraq closes foreign exchange smuggling loopholes

Iraq closes foreign exchange smuggling loopholes

7-30-2023

Crisis traders in Iraq are still continuing to impose their multiple methods to harm their country’s economy by “skilling” in various ways to achieve this, as a large number of foreign currency smugglers resorted to using a new method by relying on bank credit cards to earn the price difference between the official one specified by the Central Bank. In Baghdad and the parallel market.

The Central Bank of Iraq set the price of the US dollar at 1,320 dinars, while the parallel market is witnessing a temporary rise in its price, which was confirmed by Iraqi officials amid pledges to control this fraud. Indeed, the Iraqi Ministry of Interior arrested 45 accused of smuggling currency this July.

Earlier, the Deputy Governor of the Central Bank of Iraq, Ammar Hamad Khalaf, said that attempts to smuggle a number of cards issued by banks and electronic payment companies licensed by the Central Bank, which did not include any name with the aim of using them outside Iraq, were thwarted, indicating that “the Central Bank has taken measures against These banks, in coordination with the security authorities and border crossings, were able to seize these cards.

Big numbers

Director of Operations for Combating Organized Crime affiliated to the Iraqi Ministry of Interior, Brigadier General Hussein Al-Tamimi revealed in a press statement that “the directorate managed to seize 2,500 Master Card cards and arrested 45 accused of currency smuggling operations in Baghdad, Kirkuk, Basra and Najaf during the current month.”

He explained that “the confiscated cards are subject to legal procedures in coordination with the Central Bank of Iraq to find out the beneficiaries of those funds.”
And he added, “The Directorate for Combating Organized Crime managed to thwart the transfer of all money with cards, and all money is subject to the authority of the government,” noting that “the directorate was able to seize 1,250 smuggled cards through 23 accused in Najaf only.”

The exchange rates of the US dollar against the Iraqi dinar rose to 155 thousand dinars per hundred dollars after Washington imposed sanctions on 14 local banks, while the Central Bank confirms that the rise in dollar prices is a temporary issue.

And the specialist in economic affairs, Mustafa Akram Hantoush, said earlier that the Iraqi government represented by the Central Bank resorted to a method to “increase the cash, which is the process of selling through the window for the purposes of exchange, not transfer.”

He added that the Central Bank paid attention to the commercial operations exploited by tourism companies, as they granted each individual 20 visa cards through which he could deposit thousands of dinars in exchange for withdrawing 3 thousand dollars from one card. For example, one person who owns 20 bank cards can withdraw $60,000, or its equivalent in any other foreign currency.

He pointed out that after this situation continued for two months, the Central Bank of Iraq became aware of this fraud, so it decided to set a maximum limit for withdrawals on one card of $300 only, by choosing distinct categories of merchants and not for any individual.

platform requirements

In this context, the specialist in economic affairs, Nabil Jabbar Al-Tamimi, said that currency dealers or remittances and some banks use the issue of cards and smuggle them to carry out smooth transfers far from the restrictions imposed on the platform and make transfers without restrictions.

Al-Tamimi pointed out that the platform specified by the financial authorities in Iraq needs some documents, but not all merchants provide them, as their activities are still primitive until now, warning that other merchants resort to exploiting loopholes to withdraw dollar amounts and transfer them abroad.

He believed that these matters do not represent direct harm to the economy, but through which merchants try to find a quick, easy and smooth way from their point of view, but the government and the Central Bank of Iraq consider it an explicit violation.

speculative penalty

For his part, Ali Al-Tamimi, a specialist in legal affairs, said that the penalty for speculation that leads to influencing the exchange rate of the dollar was stipulated in the Iraqi money laundering law, punishing the violator with one year in prison and a fine of one million dinars (750 US dollars), unless the issue is related to smuggling money to other countries. This is considered money laundering, with a penalty of up to 15 years in prison.

And he believed that controlling the economic situation in Iraq is very important, pointing out that the United States is obligated through the strategic agreement to provide economic assistance to Baghdad in crises, explaining that his country needs to control the price of foreign currency as well as market prices and prevent inflation by applying consumer protection laws and preventing Monopoly.

The Supreme Judicial Council in Iraq announced the arrest of suspects who carried out suspicious banking activities, who confessed to taking commercial companies as a cover to smuggle currency out of the country. The Council also seized an amount of $15 million.

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