ANALYSIS OF IRAQ NEWS: WILL ALAQ SUCEED IN LIFTING THE BAN ON THE SANCTIONED IRAQI BANKS? BY MNT GOAT

 ANALYSIS OF IRAQ NEWS BY MNT GOAT

AL-ALAQ IN NEW YORK AT THE END OF AUGUST.. WILL HE SUCCEED IN LIFTING THE BAN ON THE SANCTIONED IRAQI BANKS?

Washington has sanctioned 32 banks over suspicions of money laundering and smuggling to Iran

The Governor of the Central Bank of Iraq, Ali Mohsen Al-Alaq, intends to visit the US capital, Washington, at the end of this month to discuss lifting the ban on Iraqi banks sanctioned by the US Treasury Department, as well as enhancing bilateral cooperation between the monetary institution in Iraq and the US Federal Reserve.

Al-Alaq’s visit to Washington comes at a time when the gap between the official and black market rates for exchanging the dollar against the dinar continues, despite the measures taken by the Central Bank of Iraq over the past months, which it says “contributed to limiting its rise to double,” but it is not known whether the visit will witness success in lifting the ban or stabilizing the exchange rate.

“double penalties” 

The head of the Parliamentary Finance Committee, Atwan Al-Atwani, had previously confirmed that the fluctuation of the dollar exchange rate creates a state of economic and financial instability, especially with the widening gap between the official selling price of the dollar and the parallel market price. 

Al-Atwani said in a statement on the sidelines of his chairing of the committee meeting that hosted the Governor of the Central Bank of Iraq, Ali Mohsen Al-Alaq, to ​​discuss the monetary policy file in the country, that “the widening gap between the official selling price of the dollar and the parallel market price creates a state of economic and financial instability.”

He stressed that “the stability of the exchange rate is a central issue for the state, as there is a duality in the issue of imposing US sanctions between Iraqi banks and correspondent banks, which requires the management of the Central Bank of Iraq to move effectively and address this crisis, in addition to tightening control over the work of private banks, in a way that ensures the integrity of all their procedures and work.”

Visit to protect the Iraqi banking system

In contrast, the financial advisor to the Iraqi Prime Minister, Mazhar Mohammed Salih, said, “Historically, Iraq has kept its oil receipts account at the Federal Reserve Bank in New York, based on a previous UN Security Council Resolution No. 1483 in May 2003, in addition to the foreign currency reserve account in dollars.”

The US Federal Reserve is the main source of the dollar, meeting Iraq’s foreign trade financing needs and facilitating payments for international exchange between our country and the world, according to Saleh.

He continued in his statement to Al-Jabal: “Thus, the upcoming visit of the Governor of the Central Bank of Iraq, Ali Al-Alaq, to ​​New York City, USA, comes to protect the Iraqi banking system and support its stability after 32 banks were banned from dealing in the dollar currency by the monetary authority in the United States for unknown reasons.”

He added: “The Central Bank of Iraq, by virtue of its work and responsibility in maintaining the stability of the financial system of Iraq, must negotiate with the American side regarding the issue of banks that are sanctioned or deprived of the dollar to alleviate the severity of the deprivation in a way that enhances the effectiveness of the banking system in supporting development and economic activity,” noting that relations between Iraq and the United States are outlined by “the strategic framework agreement signed between the two countries in 2008 and are directed towards many axes that aim to sustain relations between the two parties and strengthen them for the benefit of our country, and that the economic axis and financial and banking cooperation is one of those axes that aim to deepen bilateral relations between the two parties.”

Banking sanctions ‘no longer justified‘

In turn, financial researcher Bassam Raad explained that the upcoming visit of the Governor of the Central Bank of Iraq, Ali Mohsen Al-Alaq, to ​​Washington has “positive effects and aims to achieve Iraq’s financial interests and obtain technical support in the banking field to ensure the success of the monetary policy plan by relying on authorized banks as correspondent banks in foreign transfer operations,” noting that the visit aims “to maintain a bilateral dialogue on possible measures for the purpose of lifting sanctions by the US Treasury Department on banks banned from dealing in the US dollar.”

He stressed in his statement to Al-Jabal that the banks that are banned from dealing in foreign currency (dollars) are currently committed to international standards for combating money laundering and are working to take due care in financial transactions, noting that accordingly, “the sanctions are unjustified, especially after the Middle East and North Africa Financial Action Task Force (MENAFATF) confirmed in May of this year that Iraq is one of the countries committed to the recommendations in the field of combating money laundering and terrorist financing.”