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US Resumes Dollar Shipments to Iraq Following New Control Agreement, Report Says
Summary
Iraq has reportedly agreed to new financial controls to prevent U.S. currency from reaching Iran, ending a four-month suspension of cash shipments from the United States. The agreement allows Baghdad to once again access cash from its oil sales held in New York.
Iraq has reached an agreement with the U.S. administration to implement new controls aimed at preventing U.S. dollars from being funneled to Iran and its allied militias, according to a report from The Wall Street Journal. The deal has reportedly ended a four-month suspension of American currency shipments to Baghdad.
The U.S. Treasury Department halted the banknote deliveries in late February. This action cut off the Iraqi government's access to physical cash generated from its oil sales, which are deposited at the Federal Reserve Bank of New York. The move was intended to pressure Baghdad to curtail its ties with Tehran, which has allegedly used Iraq to acquire dollars in circumvention of U.S. sanctions.
During the suspension, the Federal Reserve, acting on Treasury Department orders, canceled at least two cash shipments, one of which was valued at approximately $500 million, according to officials cited in the report.
AdUnder the terms of the new agreement, the Iraqi government has committed to measures that will block Iran and its allies from obtaining U.S. dollars. These controls will target Iraq's currency-exchange businesses and salary payments to militia members aligned with Iran. Iraqi officials confirmed that the cash deliveries, which are transported on chartered cargo aircraft, resumed late last month.