US Treasury official says Iraq must act to avoid further action on banks

US Secretary of the Treasury Janet Yellen delivers a keynote address during the second annual Committee on Foreign Investment in the US Conference (AFP)
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Updated 14 September 2023
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US Treasury official says Iraq must act to avoid further action on banks

  • Iraq is committed to tighter financial regulations, combating smuggling of dollars, central bank chief says

BAGHDAD: Iraq’s central bank must address continued risks of the misuse of dollars at Iraqi commercial banks to avoid new punitive measures targeting the country’s financial sector, a top US Treasury official said, citing fraud, money laundering and Iran sanctions evasion.
In July, the United States barred 14 Iraqi banks from conducting dollar transactions as part of a wider crackdown on the illicit use of dollars.
Despite the crackdown, the senior US Treasury official, who spoke on condition of anonymity, said there were still other Iraqi banks operating with risks “that must be remediated.”
With more than $100 billion in reserves held in the US, Iraq is heavily reliant on Washington’s goodwill to ensure oil revenues and finances do not face US censure.
The official said the US action in July had been based on clear indications of illegal financial activity and the alleged crimes the Treasury was looking into included money laundering, bribery, extortion, embezzlement and fraud.
Iraq’s central bank governor has said Iraq is committed to implementing tighter financial regulations and combating the smuggling of dollars. The central bank did not immediately respond to a request for comment on Thursday.
Farhad Alaadin, the Iraqi prime minister’s foreign affairs adviser, said the government had taken “hard measures to make sure that Iraqi interests are protected while improving the banking sector and the transfer market.”
“The Iraqi government is serious about continuing on the path of reform and fighting corruption,” Alaadin said.
Iraq has more than 70 private banks, a relatively new feature in a sector that was almost entirely controlled by the state until Saddam Hussein was toppled in the US invasion of 2003.
Of those, just under a third are now on USblacklists.
“I chose to focus on the banks that still have access where I see continued risk,” the official told Reuters in Baghdad.
“It would be great if the central bank took the opportunity to address it directly, which would perhaps obviate the need (for the US) to take any further actions.”
The Iraqi government came to power with the support of powerful, Iranian-backed parties and so cannot afford to alienate Tehran, nor anger the parties and armed groups with deep interests in Iraq’s highly informal economy.
Iran’s foreign ministry did not immediately respond to a request for comment.
The 14 banks given dollar bans in July have urged the Iraqi government to remedy the measures against them and said they work in compliance with regulations.
The Treasury official said that Iraqi Prime Minister Mohammed Shia Al-Sudani’s government, which was appointed in October 2022, had been cooperative and there had been “progress,” something that had “not been necessarily the case” in the last 10 to 15 years.
However, there were still “vested interests comfortable with the status quo that can create friction to driving change,” the Treasury official said, without identifying who these were.

’MASSIVE THEFT’
The US measures have centered on Iraq’s so-called dollar auction, where the central bank requests dollars from the US Federal Reserve before selling them to commercial banks, which in turn sell to businesses in the import-dependent economy.
Between $200 million to $250 million is auctioned daily.
Before the enhanced US measures, large sums of money were illegitimately acquired by groups who would provide fake invoices. “Significant volumes” would then be smuggled to neighboring countries, including Iran, the official said.
A feature of a highly informal economy, the auction system was also used by thousands of small businesses that needed dollars but were not formally registered with the state, and so provided false information, Iraqi officials have said.
The enhanced scrutiny not only targets Iran but is part of a broader push to “normalize” Iraq’s financial system and combat a slew of financial crimes, the official said.
“I care about that (sanctions evasion), but we also have to care about massive theft and fraud and faked identity and ghost salaries,” the official said.
When Iraq began implementing enhanced measures via a new online platform in January that includes details on end-beneficiaries, roughly 80 percent of transactions were rejected but now that number is around 15 percent, Iraq’s central bank says.
Still, Iraqi officials say the measures have led to a dollar shortage, which has led the Iraqi dinar to change hands at more than 1,500 per dollar in the unofficial market in recent months, up to 15 percent weaker than the official rate of 1,320.
The US Treasury official said that the initial high rejection rate was largely tied to a “steep learning curve” on how to fill out forms and issues such as software bugs, that were now being addressed.


Israel’s military warns people to evacuate the area around Iran’s Arak heavy water reactor

Updated 59 min 4 sec ago
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Israel’s military warns people to evacuate the area around Iran’s Arak heavy water reactor

  • Heavy water helps cool nuclear reactors and produces plutonium as a byproduct that can potentially be used in nuclear weapons

DUBAI: Israel’s military warned people Thursday to evacuate the area around Iran’s Arak heavy water reactor.
The warning came in a social media post on X. It included a satellite image of the plant in a red circle like other warnings that proceeded strikes.
The Arak heavy water reactor is 250 kilometers (155 miles) southwest of Tehran.
Heavy water helps cool nuclear reactors, but it produces plutonium as a byproduct that can potentially be used in nuclear weapons. That would provide Iran another path to the bomb beyond enriched uranium, should it choose to pursue the weapon.
Iran had agreed under its 2015 nuclear deal with world powers to redesign the facility to relieve proliferation concerns.
In 2019, Iran started up the heavy water reactor’s secondary circuit, which at the time did not violate Tehran’s 2015 nuclear deal with world powers.
Britain at the time was helping Iran redesign the Arak reactor to limit the amount of plutonium it produces, stepping in for the US, which had withdrawn from the project after President Donald Trump’s decision in 2018 to unilaterally withdraw America from the nuclear deal.
The International Atomic Energy Agency, the United Nations’ nuclear watchdog, has been urging Israel not to strike Iranian nuclear sites. IAEA inspectors reportedly last visited Arak on May 14.
Due to restrictions Iran imposed on inspectors, the IAEA has said it lost “continuity of knowledge” about Iran’s heavy water production — meaning it could not absolutely verify Tehran’s production and stockpile.


US officials preparing for possible strike on Iran in coming days, Bloomberg reports

Updated 19 June 2025
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US officials preparing for possible strike on Iran in coming days, Bloomberg reports

  • Trump declined to say if he had made any decision on whether to join Israel’s campaign

WASHINGTON: Senior US officials are preparing for the possibility of a strike on Iran in the coming days, Bloomberg News reported on Wednesday, citing people familiar with the matter.
The report, citing the people, noted that the situation is still evolving and could change. Some of the people, according to Bloomberg, pointed to potential plans for a weekend strike.
Speaking to reporters earlier on Wednesday outside the White House, Trump declined to say if he had made any decision on whether to join Israel’s campaign. “I may do it. I may not do it. I mean, nobody knows what I’m going to do,” he said.


Trump keeps world guessing about US military action against Iran

Updated 19 June 2025
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Trump keeps world guessing about US military action against Iran

  • ‘I may do it. I may not do it,’ Trump says on joining attacks
  • Netanyahu says Israel ‘progressing step by step’ toward eliminating Iranian nuclear, missile threats

WASHINGTON/DUBAI/JERUSALEM: President Donald Trump kept the world guessing about whether the United States will join Israel’s bombardment of Iranian nuclear sites as the Israel-Iran conflict entered its seventh day on Thursday.
Speaking to reporters outside the White House, Trump declined to say if he had made any decision on whether to join Israel’s campaign. “I may do it. I may not do it. I mean, nobody knows what I’m going to do,” he said.
Trump in later remarks said Iranian officials wanted to come to Washington for a meeting and that “we may do that.” But he added, “It’s a little late” for such talks.
The foreign ministers of Germany, France and Britain plan to hold nuclear talks with their Iranian counterpart on Friday in Geneva aimed at persuading Iran to firmly guarantee that it will use its nuclear program solely for civilian purposes, a German diplomatic source told Reuters.
But while diplomatic efforts continue, some residents of Tehran, a city of 10 million people, on Wednesday jammed highways out of the city as they sought sanctuary from intensified Israeli airstrikes.
The Wall Street Journal said Trump had told senior aides he approved attack plans on Iran but was holding off on giving the final order to see if Tehran would abandon its nuclear program.

Asked if he thought the Iranian government could fall as a result of the Israeli campaign, Trump said: “Sure, anything could happen.”
Referring to the destruction or dismantling of Iran’s Fordow nuclear enrichment center, Trump said: “We’re the only ones that have the capability to do it. But that doesn’t mean I’m going to do it — at all.”
Military analysts believe that Israel might need US military help to destroy Fordow, dug beneath a mountain near the city of Qom.
Iranian Supreme Leader Ayatollah Ali Khamenei, 86, rebuked Trump in a recorded speech played on television, his first appearance since Friday.
The Americans “should know that any US military intervention will undoubtedly be accompanied by irreparable damage,” he said. “The Iranian nation will not surrender.”
In its latest bombings, Israel said its air force destroyed Iran’s police headquarters.
Israel’s military said sirens sounded in northern Israel just before 2 a.m. local time on Thursday  and that it had intercepted a drone launched from Iran. It said several minutes later that another drone was intercepted in the Jordan Valley area.
The Iranian missile salvoes mark the first time in decades of shadow war and proxy conflict that a significant number of projectiles fired from Iran have penetrated defenses, killing Israelis in their homes.
Israeli Prime Minister Benjamin Netanyahu, in a video released by his office on Wednesday, said Israel was “progressing step by step” toward eliminating threats posed by Iran’s nuclear sites and ballistic missile arsenal.
“We are hitting the nuclear sites, the missiles, the headquarters, the symbols of the regime,” Netanyahu said.
Israel, which is not a party to the international Non-Proliferation Treaty, is the only country in the Middle East believed to have nuclear weapons. Israel does not deny or confirm that.
Netanyahu also thanked Trump, “a great friend of the state of Israel,” for standing by its side in the conflict, saying the two were in continuous contact.
Trump has veered from proposing a swift diplomatic end to the war to suggesting the United States might join it.
In social media posts on Tuesday, he mused about killing Khamenei.
Russian President Vladimir Putin, asked what his reaction would be if Israel did kill Iran’s Supreme Leader with the assistance of the United States, said on Thursday: “I do not even want to discuss this possibility. I do not want to.”
A source familiar with internal discussions said Trump and his team were considering options that included joining Israel in strikes against Iranian nuclear installations.
Iran’s mission to the United Nations mocked Trump in posts on X, describing him as “a has-been warmonger clinging to relevance.”
Israel’s military said scores of Israeli jets had struck targets in and around Tehran and in western Iran in the previous 24 hours in three waves, hitting sites producing raw materials, components and manufacturing systems for missiles.
Fleeing Tehran
Arezou, a 31-year-old Tehran resident, told Reuters by phone that she had made it out of the city to the nearby resort town of Lavasan.
“My friend’s house in Tehran was attacked and her brother was injured. They are civilians,” she said. “Why are we paying the price for the regime’s decision to pursue a nuclear program?”
In Israel, sirens rang out anew at dusk on Wednesday warning of further incoming Iranian missiles. A motorist was injured by missile debris, Israeli medics said. The army later advised civilians they could leave protected areas, signalling the threat had passed.
At Ramat Gan train station east of Tel Aviv, people were lying on city-supplied mattresses or sitting in the odd camping chair, with plastic water bottles strewn about.
“I feel scared, overwhelmed. Especially because I live in a densely populated area that Iran seems to be targeting, and our city has very old buildings, without shelters and safe spaces,” said Tamar Weiss, clutching her four-month-old daughter.
Iran has reported at least 224 deaths in Israeli attacks, mostly civilians, but has not updated that toll for days.
Since Friday, Iran has fired around 400 missiles at Israel, some 40 of which have pierced air defenses, killing 24 people, all of them civilians, according to Israeli authorities.

Leverage
Iran has been exploring options for leverage, including veiled threats to hit the global oil market by restricting access to the Gulf through the Strait of Hormuz, the world’s most important shipping artery for oil.
Inside Iran, authorities are intent on preventing panic and shortages. Fewer images of destruction have been allowed to circulate than in the early days of the bombing, when state media showed pictures of explosions, fires and flattened apartments. A ban on filming by the public has been imposed.
The communications ministry said on Wednesday that temporary restrictions on Internet access would be imposed to help prevent “the enemy from threatening citizens’ lives and property.”
Iran’s ability to hit back hard at Israel through strikes by proxy militia close to Israeli borders has been limited by the devastating blows Israel has dealt to Tehran’s regional allies — Hamas and Hezbollah — in conflicts in Gaza and Lebanon since 2023.


Iraqi foreign minister calls for emergency meeting of Arab counterparts next week

Updated 18 June 2025
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Iraqi foreign minister calls for emergency meeting of Arab counterparts next week

  • Its aim would be to coordinate Arab positions on the escalating military confrontation between Israel and Iran
  • Fuad Hussein suggests it take place during the Organisation of Islamic Cooperation’s Council of Foreign Ministers session that begins in Istanbul on Saturday

LONDON: Iraq’s foreign minister, Fuad Hussein, on Wednesday called for an emergency meeting of his Arab counterparts to discuss the conflict between Israel and Iran, which he said poses destabilizing risks to the wider Middle East.

He suggested it take place on the sidelines of the 51st session of the Organisation of Islamic Cooperation’s Council of Foreign Ministers, which is due to begin in Istanbul on Saturday. The aim of the emergency meeting would be to coordinate Arab positions on the escalation of the military confrontation between Israel and Iran, who have been exchanging attacks since Friday.

Also on Wednesday, Hussein called his Egyptian counterpart, Badr Abdelatty, to discuss the conflict and its repercussions for the security and stability of the region, officials said. Iraq currently chairs the Arab League, which held its most recent summit in Baghdad in May. Egypt hosts the League’s headquarters in Cairo.


Iran-Israel war fears spark fuel shortages in West Bank

Updated 18 June 2025
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Iran-Israel war fears spark fuel shortages in West Bank

  • “Fearing potential supply disruptions or further escalation, citizens across the West Bank have begun stockpiling fuel,” said Abu Al-Rob
  • In the northern West Bank city of Nablus, dozens of drivers waited in line for fuel

RAMALLAH, Palestinian Territories: Fears over the war between Israel and Iran have led to fuel shortages in the occupied West Bank, the Palestinian Authority told AFP Wednesday, as drivers queued in long lines to buy fuel.

“Fearing potential supply disruptions or further escalation, citizens across the West Bank have begun stockpiling fuel, putting additional pressure on an already strained market,” said Mohammad Abu Al-Rob, director of the PA’s communications center.

After decades of enmity and a prolonged shadow war, Israel on Friday launched a massive bombing campaign that prompted Iran to respond with missiles and drones.

The PA official said there has also been “a noticeable decline in the number of fuel tankers arriving from Israel, some of which have been redirected for use by the Israeli occupation army.”

In the northern West Bank city of Nablus, dozens of drivers waited in line for fuel.

Mohammad Ayoub, a resident of Nablus who had been waiting in line for two hours, said he hoped to finally purchase fuel after several failed attempts.

“I came yesterday at about 11:00 p.m. and found the gas stations closed. I also came early in the morning and the situation was the same.”

Ahmad Samaana, a truck driver from Nablus, complained of limits placed on fuel purchases.

“Large trucks, like the one I have, need about 500 liters, but when we enter the station, the worker at the station tells me that he allows filling up with a value of 500 shekels, which is less than 100 liters of diesel,” he told AFP.

“This is not enough for a truck.”

Abu Al-Rob noted that “the (fuel) supply chain remains entirely subject to Israel’s will and control,” as the country controls all entry points into the West Bank, which it has occupied since 1967.

He relayed the Ramallah-based Palestinian Authority’s call “to safeguard the flow of essential supplies — particularly fuel for hospitals, bakeries, and other critical sectors” should the situation worsen.