US rejects Iraqi request to access oil dollars depleted by sanctions

The administration of US President Joe Biden has refused to provide Iraq with the proceeds of its oil sales at a time that the Arab country is struggling with a crippled economy due to Washington’s illegal sanctions, Iraqi officials say.

Citing Senior Iraqi officials, The Wall Street Journal reported Thursday that the Biden administration denied Baghdad’s initial appeal last month about an extra shipment of $1 billion in cash from its oil sales revenues in the Federal Reserve Bank of New York to help prop up its stumbling currency.

The paper said the Central Bank of Iraq also last week submitted a formal request, which the US Treasury Department is still considering.

The latest request was made during meetings between Iraqi and US Treasury officials, including Iraqi Prime Minister Mohammed Shia al-Sudani, who met in New York on September 18 with Undersecretary Brian Nelson and a week earlier in Baghdad with Assistant Secretary Elizabeth Rosenberg.

The economic crisis in Iraq and devaluation of its dinars stem from the years-long US invasion of the Arab country and Washington’s draconian sanctions on Baghdad over what it claims to be financial transactions with a number of regional countries, including Iran and Lebanon.

Since last November, Washington has banned 18 Iraqi banks from dealing in dollars and adopted stricter rules for electronic dollar transfers from its banks over unsubstantiated accusations of fraud, sanctions evasion, terrorist financing and illicit activities.

Iraqi politician blasts US control of Arab country's economy

Iraqi politician denounces the United States

The unnamed Iraqi officials were cited by the WSJ as saying that the Treasury had informed the Iraqi central bankers that sending a large extra shipment was contrary to Washington’s goal of reducing Iraq’s use of US bank notes in favor of more easily traceable electronic transactions.

The US Treasury Department claimed that there is strong evidence that for years some of the dollars going to Iraq have been smuggled to Iran in cash, as well as to Turkey, Lebanon, Syria and Jordan, according to the New York-based newspaper.

Moeen al-Kadhimi, a member of the Iraqi Parliament on the Finance Committee, denounced the US ban as an infringement on Iraqi sovereignty, saying, “The American side is making excuses to not give Iraq its legal, legitimate money.”

Dawood Abed Zayer, the head of the Iraqi National Business Council, also censured the new restrictions imposed by Washington and said Baghdad’s request for additional dollars is a precautionary step “so it will have enough cash to step in and control the ups and downs of the market.”

Pressed by the US refusal to provide Baghdad with its oil dollars, the Iraqi central bank announced on Friday that Iraq would ban cash withdrawals and transactions in US dollars as of January.

The Iraqi central bank said the move was part of a broader push to de-dollarize an economy that has seen the greenback preferred over local notes by a population weary of recurring wars and crises following the 2003 US invasion.

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