America threatens new punitive measures against banks in Iraq

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A high-ranking official from the US Treasury Department has urged the Central Bank of Iraq to take action against the ongoing risks arising from the misuse of the US dollar by commercial banks in Iraq. The official warned that if the bank fails to address the issue, new punitive measures may be imposed on the country’s financial sector. The official cited concerns over fraudulent activities, money laundering, and Iran’s efforts to evade sanctions.

In July, the United States blocked 14 Iraqi banks from using dollars due to the illegal use of the currency.

The official informed Reuters that there are still Iraqi banks operating with risks that need to be addressed despite the campaign.

With more than $100 billion in reserves in the US, Iraq relies heavily on US good faith to prevent sanctions on its oil revenues and funds.

According to the official, his country implemented the measure in July after receiving clear indications of illegal financial activity. He elaborated that the Treasury Department is investigating alleged crimes such as money laundering, bribery, extortion, embezzlement, and fraud.

The Central Governor of Iraq has stated that the country is committed to implementing stricter regulations for the financial sector and preventing the smuggling of dollars. The Iraqi Central Bank did not respond to requests for comment on Thursday.

Iraq had an almost entirely state-controlled banking sector until 2003. Now, there are over 70 private banks.

Just under one-third of these banks are on the US blacklist. “

I am focusing on banks that still have access and where I see continued risks,” the official told Reuters in Baghdad.

He suggested that the central bank directly address the matter, which could eliminate the need for further measures in the United States.