Iraq is reportedly helping Iran skirt US sanctions that have been imposed on the Middle Eastern nation because of their nuclear program, according to a report by the New York Times.
The report points out that President Obama announced in July he would bar a Baghdad bank, the Elaf Islamic Bank, from any dealings with the American banking system, reports The New York Times.
So, why would the Obama administration interfere in the dealings of a small, largely unknown bank? Because both current and former American and Iraqi government officials report that the bank is part of a network of financial institutions and oil smuggling operations that provides Iran with money while sanctions squeeze the country’s economy.
While the Obama administration is not eager for a public showdown with the Iraqi government, they have held private talks with Iraqi officials to speak about specific instances of financial and logistical ties between the two Middle Eastern nations, although they do not regard all trade between Iran and Iraq illegal.
One instance shows that, when American officials learned the Iraqi government was allowing Iran to use their airspace to ferry supplies to Syria, President Obama called Prime Minister Maliki to complain. From then on, the Iranian planes flew a different route.
David S. Cohen, the Treasury Department’s under secretary for terrorism and financial intelligence, stated that:
“[Iran] may seek to escape the force of our financial sanctions through Iraqi financial institutions. [But] we will pursue, and are actively pursuing, efforts to prevent Iran from evading U.S. or international financial sanctions, in Iraq or anywhere else..”
The Pittsburgh Post-Gazette notes that, when President Obama announced the cutoff of the Elaf Islamic Bank, he explained that it 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 treatment that the bank has received in Baghdad since President Obama’s announcement suggests, however, that the Iraqi government is allowing companies and individuals to get around sanctions, and they are not enforcing penalties for noncompliance.
The Iraqi bank singled out by President Obama for helping Iran skirt US sanctions is still allowed to participate in the Iraq Central Bank’s daily auction, which allows commercial banks to sell Iraqi dinars to buy US dollars.
[Image from ShutterStock]