Today: Jun 23, 2024

Iraq halts US Dollar dealings with 8 banks, fighting fraudulent fears.

2 mins read

TLDR:

  • Eight commercial banks in Iraq have been banned from making US dollar transactions due to concerns about fraud, money laundering, and other illegal activities.
  • The banks are restricted from participating in the Iraqi central bank’s daily dollar market but are still permitted to coordinate and transfer payments in other currencies.
  • The Iraqi government’s decision to suspend US dollar transactions is seen as an effort to curtail currency smuggling into nearby Iran.

Following a visit from a top US Department of Treasury official, eight commercial banks local to Iraq have been banned by the Iraqi government from making US dollar transactions due to concerns about fraud, money laundering, and other illegal activities. The banks, including Ahsur International Bank for Investment, Investment Bank of Iraq, and Union Bank of Iraq, are restricted from participating in the Iraqi central bank’s daily dollar market. However, they are still permitted to coordinate and transfer payments in other currencies. Iraq’s heavy dependence on imports and revenue from oil exports makes the government particularly reliant on the approximately $100 billion it holds in reserves. Iraqi regulators are evidently willing to work with the US on this administration’s campaign to curtail currency smuggling into nearby Iran. The US Treasury commended the steps taken by the Central Bank of Iraq to protect the Iraqi financial system from abuse.

This decision follows similar restrictions that were levied at 14 other Iraqi banks in July of last year. The Iraqi government’s move to ban these eight commercial banks from participating in the daily dollar market is in line with its efforts to crack down on fraud, money laundering, and illegal activities in the financial sector. The government’s heavy reliance on its reserves and its need to protect its financial system from abuse make this decision crucial. Although these banks are still allowed to coordinate and transfer payments in other currencies, the suspension of US dollar transactions is a significant blow as the US dollar is a widely accepted international currency.

The US government has been cracking down on currency smuggling into Iran, imposing sanctions and restrictions on individuals and entities involved in such activities. Iraq’s decision to suspend US dollar transactions from these eight banks shows its commitment to working with the US in this regard. It is important for Iraq to maintain a strong financial system and protect its reserves, especially as it faces economic challenges and political instability. The cooperation between the Iraqi government and the US Treasury is expected to continue as they work together to combat fraud, money laundering, and illegal activities in the financial sector.

In conclusion, Iraq’s decision to suspend US dollar transactions for eight commercial banks is a significant move to crack down on fraud, money laundering, and illegal activities in the financial sector. The government’s heavy reliance on its reserves and its need to protect its financial system make this decision crucial. The US government’s campaign to curtail currency smuggling into Iran aligns with Iraq’s efforts, and the cooperation between the two countries is expected to continue to combat financial crimes effectively. The suspended banks will have to find alternative ways to conduct transactions and safeguard their operations in a challenging economic and political environment.