Following several months of suspension aimed at pressuring the Iraqi government to distance itself from Iran, the United States has resumed some of its dollar cash shipments to Iraq, as revealed by aides to Iraqi Prime Minister Ali Zaidani.
"The Problem is Solved"
Haider al-Aboudi, spokesperson for Zaidani, stated: "Dollar shipments to Iraq have resumed," adding that "the problem is resolved." Mazhar Mohammad Saleh, the Prime Minister's financial advisor, also confirmed the resumption of the transfers.
Neither the U.S. State Department nor the Treasury has commented on the matter, as reported by The New York Times on Thursday.
The resumption of dollar shipments coincided with Zaidani launching an anti-corruption campaign that included the arrest of dozens of current and former officials, including parliament members, on charges related to corruption, according to the official Iraqi news agency.
Previously, President Donald Trump’s administration had halted the inflow of dollars derived from oil revenue to the largely cash-based Iraqi economy in April. Iraqi officials claimed at the time that Washington had also suspended cooperation and funding designated for Iraqi security apparatuses.
American Currency Smuggling
A Kurdistan region official noted that one reason for the suspension of dollar shipments was to curb the smuggling of U.S. currency by militias backed by Iran. This was during a period when the country was in the process of selecting a new Prime Minister, amid American efforts to prevent candidates perceived as close to Tehran from taking office.
Washington had been pressuring the Iraqi government to rein in several Tehran-linked militias that operate largely outside of state control and have occasionally launched attacks against American targets within Iraq.
Years ago, new international banking regulations imposed on Baghdad mandated greater transparency for dollar transfers held as foreign reserves for Iraq in an account at the Federal Reserve Bank of New York.
The aim was to limit illicit dollar flows to criminal entities and money laundering networks, as well as to groups supporting armed militias in neighboring countries, including Iran.
The Central Bank of Iraq has facilitated these financial transfers daily from its account at the Federal Reserve in New York to Iraqi companies and individuals to pay for imported goods.
These transfers are vital as few Iraqi companies possess international bank accounts.