Senior US sanctions official in Baghdad to curb dollar smuggling to Iran
Washington seeks to dry up the sources of Iran’s funding for the militias
Nelson discussed ways to protect Iraqi and international financial systems from criminal, corrupt and terrorist bodies.
Nelson meets with senior officials led by Mohammed Shia Al-Sudani
WASHINGTON – A senior official in the US Treasury Department in Iraq discussed the file of Iran’s evasion of sanctions and held the financial sector in the country to be compatible with international standards, referring to efforts to curb the smuggling of the dollar to Tehran, as this comes amid great tension in the region, especially the killing of American soldiers near the Jordanian-Syrian border as a result of attacks believed to be from militias loyal to Tehran.
A Treasury Undersecretary for Terrorism and Financial Intelligence Brian Nelson, the ministry’s top sanctions official, traveled to Iraq on a visit that began on Sunday and lasted until Monday, where he met with senior Iraqi officials, including Prime Minister Mohammed Shia al-Sudani, as part of ongoing work to combat illicit financing, a U.S. State Department spokesman said.
He added that during the visit, Nelson discussed with his counterparts ways to protect Iraqi and international financial systems from criminal, corrupt and terrorist actors, noting that Washington will cooperate to protect the Iraqi financial sector “from (any) abuse by Iran or any other evil party.”
The Iraqi government came to power with the support of powerful Iran-backed parties and armed factions with interests in Iraq’s largely informal economy as the United States revealed that Tehran sought to evade sanctions by smuggling the dollar from Iraq through a complex financial system controlled by political forces and militias loyal to the Iranian regime.
“From the perspective of the Treasury Department, I think we are really satisfied with the transparency tools put in place by the Central Bank of Iraq to identify illicit financial flows that pass through the Iraqi financial system,” Nelson said Monday. But he warned that Iraq should always put the risks of sanctions into its eyes.
Iraq must always put the risks of sanctions to its eyes
“We will continue to monitor Iraqi individuals, companies and banks that operate for or on behalf of groups designated by the United States as terrorist,” he added.
The United States on Monday designated Al-Huda Bank Iraq as a foreign financial institution of major concern regarding money laundering and accused it of acting as a conduit to finance terrorism.
The Treasury Department’s Financial Crime Service also proposed a decision to separate the bank from the U.S. financial system. Washington has also imposed sanctions on the bank’s owner.
“Bank Al-Huda and its foreign sponsors, including Iran and its agents, are diverting funds that could have supported the legitimate business and economic aspirations of the Iraqi people,” the Treasury said in a statement. These bad actors fuel violence that threatens Iraq’s stability and the lives of Americans and Iraqis alike.”
Nelson’s visit to Iraq comes as the United States seeks to crack down on a group of Iranian-backed proxies at a time when there are attacks on Israeli and U.S. targets and other interests, given the situation in Gaza, Iraq, Lebanon, Syria and Yemen.
Washington asked Iraq to address the ongoing risks of the misuse of the US currency in Iraqi commercial banks, and in July it banned 14 Iraqi banks from conducting dollar transactions in a major campaign targeting the illegal use of the dollar.
With reserves of more than $100 billion in the United States, Iraq relies heavily on Washington’s goodwill to ensure that oil revenues and money are not subject to U.S. sanctions.
Iraq’s central bank governor said Iraq is committed to implementing stricter financial regulations and combating dollar smuggling. Nelson is set to travel from Iraq to the UAE where Washington has also expressed concerns about sanctions evasion.
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