Washington ‘unequivocally’ expects Baghdad to implement Iran sanctions: Treasury official

ERBIL, Kurdistan Region — Washington is continuing to make “crystal clear” its expectation that the Iraqi government honor, implement and adhere to economic sanctions on Tehran, a US Treasury Department official said on Friday.

“I have a good relationship with my Iraqi counterparts, with the finance minister, with the Central Bank governor, they understand everything the United States does to assist the function of their economy,” Marshall Billingslea, Assistant Secretary for Terrorist Financing at the US Treasury Department, said at an Atlantic Council meeting focusing on Iran and terrorist financing on Friday.

“We will continue to insist that when we implement designation on those who facilitate QF [Quds Force] or IRGC [Islamic Revolutionary Guard Corps] or Hezbollah or other terrorist proxy finances…it is not a negotiation, we expect unequivocally that those sanctions are honored and implemented.”

Bodies and institutions of all sizes are expected to adhere to sanction implementation, Billingslea said, with failure to do resulting in penalization.

“We will not hesitate to act, even against a large financial institution with a politically connected member of the Iraqi parliament,” Billingslea said.

Four prominent Iraqis - two Popular Mobilization Forces (PMF, Hashd al-Shaabi in Arabic) leaders and two former provincial governors - were sanctioned by the US Treasury for alleged corruption and human rights abuses in July.

The sanctions were quickly followed by a Central Bank of Iraq order for all governmental financial departments and state-owned banks to “halt or freeze” the accounts of sanction-hit Iraqis.

After Washington re-imposed crippling sanctions on Iran in November 2018, the US has prodded its regional allies to halt all trade activity with Tehran.

US Treasury officials have frequented both Baghdad and Erbil in recent months to pressure Iraq into cutting their ties with Iran as part of its policy of maximum pressure.

“[The US] Treasury is actively targeting Iran’s key industries, to drive a realization by Iran’s Supreme Leader that economic collapse is inevitable if Iran does not stop its sponsorship of terror, its proliferation activities, and return to negotiating table,” Billingslea said.

Washington’s main target, he specified, is Iran’s petrochemical industry, the primary source of the country’s revenue. The US has accused Iran of attempting to circumvent sanctions through illicit oil sales to provide revenue for its proxies elsewhere in the Middle East.

“In recent days you have seen us focus on a joint Iranian-Hizbollah oil-for-terror shipping network…this network alone has illicitly sold more than half a billion dollars of Iranian crude just this year, predominantly again to the brutal Assad regime in Syria.” Billingslea told the Atlantic Council audience.

Iraq has relied on imported Iranian electricity and gas for over a decade to meet rising demand against an ailing energy infrastructure. Iran currently provides as much as 40 percent of Iraq’s electricity.

This reliance has angered the US, though it has nonetheless granted Iraq several temporary waivers to allow it to keep purchasing Iranian power until October.

The US insists Iraq must wean itself off Iranian energy, which Baghdad has said won’t be a viable option for some years.

Washington ‘unequivocally’ expects Baghdad to implement Iran sanctions: Treasury official

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