ERBIL, Kurdistan Region - Iraqi central bank on Wednesday suggested halting business operations and financial dealings with Russia following America’s far-reaching sanctions as the Russian invasion of Ukraine continues for the seventh day.
In a decree seen by Rudaw English, the Central Bank of Iraq suggested that the Iraqi government holds off signing contracts with Russia, “in order to protect the Iraqi financial system,” citing Russia’s jeopardized economy as international sanctions cripple its finances.
“In order to protect the Iraqi financial system, we suggest waiting, for the time being, about concluding any government contracts with the Russian side and the need to wait in transferring any financial payments that pass through Russia’s financial system,” read the official document.
Russian President Vladimir Putin declared a "special military operation" on Ukraine last week, with explosions being heard across the country, stoking fears of a major war.
The United Nations General Assembly on Wednesday voted to approve a resolution condemning Russia's invasion of Ukraine, and demanding an immediate withdrawal of its military forces from the cities of Ukraine.
Iraq was among the 35 countries which abstained from the vote.
The escalating Russia-Ukraine conflict led to the announcement of immediate and severe sanctions by the United States and Western countries against Russia, mainly targeting its financial sector in attempts to limit its capacity to fund the war.
The US Department of The Treasury, along with its European allies, on Thursday imposed “expansive economic measures” that target “the core infrastructure of the Russian financial system, including all of Russia’s financial institutions and the ability of state-owned and private entities to raise capital, and further bars Russia from the global financial system.”
The action also targeted nearly 80 percent of Russia’s banking assets, the country's two largest banks and 90 financial institutions subsidiaries around the world, treasury added.
Russian banks were also cut off from the SWIFT messaging system, which banks use to transmit information globally.
US credit card giants Visa, Mastercard, and American Express also said they were blocking Russian banks from their payment networks, reported AFP.
The sanctions have also affected the value of the ruble, which has seen a dramatic fall.
Iraq has not made any official statements regarding Russia’s invasion of Ukraine, but its foreign ministry has been taking a series of measures to ensure the safety of its nationals stuck in Ukraine.
The fighting in Ukraine has so far pushed more than half a million people to flee the country, the UN refugee agency reported on Monday. It has also killed 352 people, including 14 children, AFP reported on Tuesday.
Iraq and Russia enjoy good relations, mostly in the energy sector.
Russia has invested up to $14 billion in different projects in Iraq, with two billion dollars allocated to the Kurdistan Region, Russian Ambassador to Iraq Elbrus Kutrashev told Rudaw on Monday.
Kutrashev also stated that there is a “quite big” number of employees of Russian origin in Iraq and that “they are a good example of our serious will to work in this country and develop bilateral cooperation.”
Updated at 9:16 pm
