America threatens new punitive measures against banks in Iraq


According to a senior US Treasury Department official, the Central Bank of Iraq must address ongoing risks associated with the misuse of the dollar in Iraqi commercial banks in order to avoid imposing new punitive measures targeting the country’s financial sector, citing acts of fraud, money laundering, and Iran’s evasion of sanctions.

In July, the US barred 14 Iraqi banks from handling dollar transactions as part of a larger effort against the unlawful use of American cash.

According to the source, other Iraqi banks are still functioning with concerns that “must be addressed” notwithstanding the effort.

With over $100 billion in US reserves, Iraq is significantly reliant on Washington’s good faith to ensure that its oil income and money are not vulnerable to US sanctions.

The source went on to say that his country’s July decision was based on clear indicators of unlawful money behavior. He went on to say that the Treasury Department is looking into allegations of money laundering, bribery, extortion, embezzlement, and fraud.

According to the Iraqi Central Governor, his government is dedicated to enforcing stronger banking sector regulations and countering dollar smuggling. On Thursday, the Iraqi Central Bank did not immediately reply to a request for comment.

Iraq now boasts over 70 private banks, a relatively new element in a sector that was nearly exclusively under state control until Saddam Hussein’s demise during the US invasion in 2003.

Almost one-third of these banks are on the US blacklist.

“I choose to focus on banks that still have access and where I see continued risks,” the official said in Baghdad to Reuters.

“It would be fantastic if the central bank took advantage of the opportunity to address the matter directly, which might negate the need (in the United States) to take further measures,” he added.


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