Washington punishes Iraqi banks and bans the use of electronic cards abroad
Washington punishes Iraqi banks and bans the use of electronic cards abroad
2025-02-16 03:37
Shafaq News/ An Iraqi government official source revealed, on Sunday, that Iraqi government agencies received an official notification imposing US sanctions on new Iraqi banks, for their involvement in illegal financial transfer operations inside and outside Iraq.
The source told Shafaq News Agency, “Iraqi government agencies have officially received a notification from the US Treasury imposing sanctions on five Iraqi banks as a first stage, in addition to exchange companies, due to their involvement in illegal transfer operations, and their involvement in smuggling dollars to banned and US-sanctioned entities, most notably the Islamic Republic of Iran.”
The source, who asked not to be named, added, “Iraq also received a notification that an American decision was issued to ban the use of all electronic payment cards abroad, during the next two months, as a step to prevent the smuggling of currency abroad via these cards after suspicious financial movements were monitored by the American team specialized in monitoring financial movements inside Iraq.”
The responsible Iraqi government source stated that “the American notification to Iraq confirmed that these sanctions will not be the last on banks and some companies, as there is monitoring of the work of some other banks, and sanctions may be issued against them during the next stage.”
On July 19, 2023, the US Treasury Department imposed sanctions on 14 Iraqi banks in a campaign against Iran’s dollar transactions.
Shafaq News Agency learned at the time that the sanctions affected “the banks (Islamic Advisor for Investment and Finance, Al-Qurtas Islamic Investment and Finance, as well as the Islamic Spectrum, Elaf Bank, Erbil Bank for Investment and Finance, the International Islamic Bank, Abra Iraq Bank, Mosul Bank for Development and Investment, Al-Rajhi Bank, Sumer Commercial Bank, International Islamic Trust Bank, Ur Islamic Bank, World Islamic Bank for Investment and Finance, and Zain Iraq Islamic Bank for Investment and Finance.”
The US Treasury Department blocked four more Iraqi banks from accessing dollars in November 2023, and in cooperation with the Central Bank of Iraq, it also imposed stricter controls on financial transfers in the country in general.
At that time, the Central Bank of Iraq had excluded 4 Iraqi private banks from the currency auction (namely: Al-Ansari, Middle East, Al-Qabeed, and Asia) following directives and warnings from the US Treasury Department regarding these banks accused of currency smuggling.
The United States has previously imposed sanctions on Iraqi banks on several previous occasions, citing mainly money laundering and currency smuggling as reasons.
It was placed under US guardianship after the fall of Saddam Hussein’s regime in 2023. As a result, its oil revenues, which represent more than 90% of its hard currency sources, were deposited in the US Federal Reserve Bank, to protect it from compensation claims filed by some countries harmed by the policies of the former regime before 2003.
To benefit from these funds, the Iraqi Ministry of Finance submits a request to the American side, attaching an explanation showing the spending aspects. Then the request is reviewed by the Federal Reserve Bank, which issues a recommendation to spend the required amount.
After approval, the funds are transferred to the Central Bank of Iraq, which provides them to the government in dollars or Iraqi dinars as needed. The Central Bank holds a daily auction in which it sells dollars to Iraqi banks, making them available to traders who buy the country’s imports of goods and services, as well as to individuals in need of dollars.
Banks require those wishing to buy dollars to submit documents proving their actual need for the currency, and then submit these documents to the Central Bank to allow them to continue participating in the auction.
shafaq.com
