Washington warns Iraqi banks from monetary transactions with Iranian banks

Washington warns Iraqi banks from monetary transactions with Iranian banks

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Shatha Khalil *
Most countries seek to work within a precise and cautious system in monetary and banking transactions because they directly affect the economy of the state. It is the backbone of the economy of any country. It helps to generate capital and thus can be directed to investments that need a stable economic environment for growth and development. Banking system in Iraq is weak and needs a lot of reforms to serve the Iraqi economy, not to serve other countries.

The warning came during a visit of the Assistant Secretary of Treasury for the fight against the financing of terrorism, Marshall Billingsley , to Baghdad and his meeting with the three presidencies in the country, they were informed of the work to expel the Iranian banks (“Percian” and “Melli Iran”) and stop banking and monetary transaction with them, and the need to liquidate the Bank of Iraq, which is subject to US sanctions, against the background of the transfer of suspicious funds to the Lebanese Hezbollah.
Billingsley, when he met with the finance minister and the governor of the Iraqi central bank, they were told that the Iraqi funds “oil revenues” kept by the DFI Fund and transferred to Iraq each year worth 8 billion dollars in the form of cash that their value will be reduced to an unknown number. Information (especially for the Rawabet Center for Research and Strategic Studies)
Marshall Billingsley has provided Iraqi officials with a list of Iranian companies and banks that circumvent sanctions across Iraq and has warned that Iraq could be severely punished if it continues to provide safe havens for Iran’s banking activities and to overlook Iranian banks and companies with Iraqi fronts.

He stressed the need to develop the Iraqi banking sector and enhance the prospects for cooperation between Iraqi and US banks, and to carry out economic reforms through the activation of electronic systems in monetary exchange, and contribute to the development and revitalization of the infrastructure of the Iraqi economy.
In this context, Care must be taken in dealing with Iranian banks, which are working to exploit the hard currency in Iraq and turn it into Iran, and that monetary and banking transactions with banks which are subject to sanctions have a direct impact on the Iraqi economy.
The Iraqi economy since 2003 has not fully recovered after the sectarian incidents and the war against the organization ISIS and the liberation of Iraqi cities, as any tension or conflict will negatively affect the market and economy of Iraq, and the political situation in the Middle East is worrying and threatening economic and political security.
But Billingsley stressed that the developments in the political scene in the region and the measures taken by the United States to impose sanctions on the Islamic Republic of Iran are far from the bilateral relations between Iraq and America, especially in the fields of economy and finance. The agreement with Washington was to continue cooperation to protect the Iraqi economy and ensure its stability from any repercussions in the region.
Baghdad stressed its desire to resolve the outstanding problems by peaceful means, diplomacy, dialogue and negotiations, because any tension or conflict will affect negatively on all countries in the region, especially Iraq, and this will adversely affect the economy and the Iraqi market as it depends heavily on the import from the Iranian market, here we wonder when will the Iraqi economy rise (rich with resources and wealth ) and achieve economic independence and sustainable development at all economic levels and be independent and free and works for its own benefit first and not for the benefit of other countries.

Iranian banks wrap around the Iraqi economy to save itself :
The Iranian banks have been operating in Iraq for nearly ten years in the days of Maliki’s government in 2010 and are an important engine for trade between Iraq and Iran. They have branches in Baghdad, Najaf and Basra. They gave commercial and personal loans and provided banking services to Iraqi tourists, and most importantly are the Iranian branches : Persian and “Melli Iran” Bank.
In light of the bankruptcy faced by the branches of the Iranian banks in Iraq, “This requires urgent intervention by the Central Bank of Iraq, and comes the failure of work or bankruptcy because of US sanctions on Iran, and the difficulty of obtaining hard currency.” The orders were announced to the two banks, To implement the guardianship
Iran is exploiting the hard currency and is working on decisions that protect its interests only and are used and exploited and depleted the Iraqi economy, ie after the decline of Iranian exports to Iraq during the recent period, because of the difficulty of paying the value of exports in foreign currency and converted to Iran, in a new step decided the Central Bank of Iran to branches Iranian banks in Iraq to transfer the value of dues instead of cashiers, as the value of Iranian exports to Iraq during the past ten months about $ 7 billion and 515 million dollars.
The Iraqi-Iraqi Chamber of Commerce said that Iraqi importers had in the past paid foreign currencies to Iraqi bankers in order to turn them in to the Toman and pay the dues of exporters in Toman, while the Central Bank of Iran decided that the branches of Iranian banks in Iraq to replace the cashiers in such a process.
This means that the Iranian exporter can receive the dinar or dollar from the Iraqi importers and handed over to the branches of Iranian banks in Iraq, to receive Tuman instead of it at the price of discharge that day in Iran.
As the economic expert Abdul-Hassan al-Shammari stressed , that Iran is witty in the exploitation of the hard currency in Iraq, where it has been able to develop mechanisms to withdraw foreign exchange of Iraq and gave a very large interest rate exceeding 22%, as it benefit from hard currency to save its national currency, which deteriorated because of US sanctions.

The Iranian currency suffers from fluctuation and instability in price because of the economic embargo imposed on Tehran recently, these are all factors in Iran helped to attract foreign funds to deposit in its banks, conditions are easy and there is no complexity so that money can be deposited in the name of the owner of the money and not in the name of someone else , Iran benefits from this as it attracts the dollar and converts it to the Tuman, at the expense of the Iraqi economy and citizen.

Economic Studies Unit
Rawabet Center for Research and Strategic Studies