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Iraq Bans Five Banks from US Dollar Transactions
Crackdown on Money Laundering and Dollar Smuggling
Iraq’s central bank is set to prohibit five additional local banks from engaging in U.S. dollar transactions. This decision is part of ongoing efforts to combat money laundering, dollar smuggling, and other financial violations.
Recent Talks with U.S. Officials
The move follows meetings in Dubai between officials from the Central Bank of Iraq and representatives from the U.S. Treasury and Federal Reserve. These discussions focused on strengthening financial oversight and reducing illicit financial activities.
List of Affected Banks and Firms
The five banks affected by this decision are:
- Al-Mashreq Al-Arabi Islamic Bank
- United Bank for Investment
- Al Sanam Islamic Bank
- Misk Islamic Bank
- Amin Iraq for Islamic Investment and Finance
Additionally, three payment services firms—Amawl, AL-Saqi Payment, and Aqsa Payment—are also facing restrictions.
Impact on Financial Operations
While these banks can continue operating and conducting transactions in other currencies, the restriction on dollar transactions will significantly hinder their international dealings. Most operations outside Iraq rely on access to U.S. dollars, making this a substantial limitation.
U.S. Pressure on Iraq and Iran
Iraq, holding over $100 billion in reserves in the U.S., is under increasing scrutiny amid efforts to curb Iran’s access to hard currency. Iran has long used Iraq as a financial conduit to bypass U.S. sanctions through banking and trade.
Future Challenges for Iraq’s Financial Sector
Western officials had previously praised Prime Minister Mohammed Shia al-Sudani’s economic and financial reforms. However, with the expected return of stricter U.S. policies, Iraq’s financial sector may face mounting challenges in maintaining stability while balancing relationships with both Washington and Tehran.
“Iraq Bans Five Banks from US Dollar Transactions” “Iraq Bans Five Banks from US Dollar Transactions”