News / Middle East

Iraq Helping Iran Skirt Sanctions, Report Claims

Fern Robinson
A report in Sunday’s New York Times says Iraq has been using a network of financial institutions and oil smuggling operations to help Iran skirt economic sanctions imposed because of its nuclear program.

Last month, U.S. President Barack Obama barred a  Baghdad bank, the Elaf Islamic Bank, from any dealings with the American banking system. In a statement, Obama said the bank had “facilitated transactions worth millions of dollars on behalf of Iranian banks that are subject to sanctions for their links to Iran’s illicit proliferation activities.”
The newspaper says that despite Obama’s order, Elaf continues to participate in the Iraq Central Bank’s daily auction where commercial banks can sell Iraqi dinars and buy U.S. dollars.

According to current and former American and Iraqi government officials and experts on the Iraqi banking system, Elaf is just one of a number of institutions helping to funnel cash into Iran as sanctions choke its economy. The New York Times described the auctions as “a crucial pathway for Iranian access to the international financial system.”

Several U.S. and Iraqi banking and government officials say Iranian organizations have gained “effective control” of at least four Iraqi commercial banks through Iraqi intermediaries, according to the newspaper report. That control gives Iran direct access to the international financial system, a system Iran should not have access to because of the economic sanctions.

David Cohen, the U.S. Treasury Department’s under secretary for terrorism and financial intelligence, told the Times the U.S. is “actively pursuing efforts to prevent Iran from evading  U.S. or international financial sanctions, in Iraq or anywhere else.”

According to the New York Times, some current and former American and Iraqi officials, along with banking and oil experts, say Iraqi government officials have largely ignored the massive financial flows, smuggling and other trade with Iran.  The paper says some Iraqi government officials who have close ties to Prime Minister Nuri Kamal al-Maliki are directly profiting from the activities.

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Comment Sorting
by: Bak |Shawn from: Iraq
August 19, 2012 2:11 PM
its not secret to anyone. Obama gave Iraq to Iran on a golden tray. ignoring all the lives of young Americans and billion of tax payers dollars, just for the sake to be reelected another term. its a shame. .

by: beachjuicetice from: Boston, MA
August 19, 2012 9:05 AM
Definition of proliferation in context: "a rapid and often excessive spread or increase: nuclear proliferation."
There isn't even a suspicion that Iran has been giving nuclear technology or expertise to foreign nations, so what part of their nuclear program can be considered 'proliferation'?
Simply investing in nuclear technology isn't against any international law, nor should it be when carbon based fuels do so much damage and will be in short supply.
Iran supported the Northern Alliance against the Taliban in Afghanistan anyhow; there's no reason to think they'd shoot themselves in the foot by giving terrorists WMD, especially because if ever a WMD goes off in the mid east, they know everyone will be looking to them, or Pakistan, as the culprits. Their long history in a violent region is reasonable cause for wanting at least 'breakout capability' to defend themselves.

Regardless, I don't know why the US wants to stay involved in the middle east. It has all the resources it needs in its own continent, and it's better off saving the lives of its men and women and investing the money at home. It wants to keep a military foothold in Asia but it's not been successful and there's plenty of ways to respond instantly with aircraft and missiles nowadays that don't require bases and boots on the ground everywhere. I think it doesn't want to loose a foothold militarily on the other hemisphere. But the cost isn't worth it for anyone, and the military-industrial complex is the only thing driving its continued interventionist foreign policy. Iran hasn't even ever attacked the US before.

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