Iraq
Ali Mohsen al-Alaq, Governor of the Central Bank of Iraq (second from left) answers questions from the parliamentary finance committee in Baghdad on March 14, 2024. Photo: handout
ERBIL, Kurdistan Region - Ali Mohsen al-Alaq, Governor of the Central Bank of Iraq (CBI), said on Thursday that the US has agreed to review recent sanctions on Iraqi banks, adding that in the future, similar punitive measures will be taken in consultation with Baghdad.
The US banned transactions with 14 Iraqi banks for allegedly violating its rules in July last year. In January, Washington identified Iraq-based al-Huda Bank “as a foreign financial institution of primary money laundering concern,” and imposed sanctions on its owner Hamad al-Moussawi, who is also a member of the Iraqi parliament.
Alaq was hosted by the Iraqi parliament’s finance committee on Thursday.
Atwan al-Atwani, head of the committee, said in a statement later in the day that they told the governor that the “external sanctions” imposed on Iraqi banks “have hindered efforts and plans to forge relations and lines of communications with accredited international correspondent banks.”
The governor was cited in the statement as telling the committee that there are ongoing meetings with the US Treasury Department on the issue.
“It was agreed [by the US] to review the sanctions imposed on Iraqi banks, and that in the future such decisions should not be taken without discussing them with and informing the Central Bank of Iraq,” said Alaq.
Moussawi was designated for “his support to the IRGC-QF [Iranian Revolutionary Guard Corps - Quds Force], including through support for its proxy militia groups in Iraq,” according to a US Treasury statement in January, which stressed that al-Huda Bank has “exploited its access to U.S. dollars to support foreign terrorist groups, including the IRGC-QF and Kata’ib Hizballah.”
The CBI later announced that al-Huda Bank would continue “to provide its banking services without dealing in U.S. dollars and allowing transactions in other foreign currencies.”
The sanctions came at a time when US interests across Iraq and Syria were the target of drone strikes from IRGC-backed militia groups. The group has claimed its attacks constitute a response to Washington’s support for Israel in its war in the Gaza Strip.
The attacks on US troops in Iraq and Syria were suspended in recent weeks following retaliatory strikes from Washington against pro-Iran groups.
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