Iraqis linked to Iran use money-laundering scam to beat US sanctions

Iraqis linked to Iran use money-laundering scam to beat US sanctions
A vendor inspects Iranian rials at a currency exchange shop in Baghdad, Iraq August 8, 2018. (Reuters)
Updated 01 August 2019

Iraqis linked to Iran use money-laundering scam to beat US sanctions

Iraqis linked to Iran use money-laundering scam to beat US sanctions
  • They employ middlemen to buy US dollars and transfer funds out of country
  • Rate of dollar purchases surged after sanctions imposed, exchange dealers tell Arab News

 

BAGHDAD: Iraqi individuals and companies linked to Iran are smuggling cash out of the country to avoid financial sanctions imposed by the US Treasury.

Despite technically being denied access to US dollars by Iraq’s central bank, they are exploiting the bank’s daily auction of hard currency by employing middlemen to convert Iraqi dinars into dollars. The funds are then transferred out of Iraq using private exchange offices.

“In previous months, the daily release rate of the dollar at the currency auction was between $150 million and $180 million, sometimes up to $200 million. In the past few days it has reached $270 million,” the owner of a large currency exchange and financial transfer office in Baghdad told Arab News.

There is “no noticeable justification” for the sudden increase in dollar purchases, exchange operators said. Traders at Shorja Market, the largest wholesale market in Baghdad, told Arab News the surge in remittances could not be explained by any changes in the market, where there had been a shortage of hard cash since the end of last year.

Daily buying and selling remained weak, they said. One prominent banker told Arab News:

“Traders have nothing to do with this fever; 80 percent of the remittances that were made this week were cash transfers, and will be delivered by hand.”

On July 18, the US Treasury’s Office of Foreign Assets Control imposed financial sanctions on groups and individuals including two commanders of pro-Iranian paramilitary groups and two former governors supported by Iran. The sanctions were imposed under the Global Magnitsky Human Rights Accountability Act, targeting “perpetrators of serious human rights abuses and corruption,”and banned any financial dealings with those named.

In response, the Central Bank of Iraq issued a circular to all Iraqi banks ordering them to freeze the accounts of anyone targeted by sanctions, and prevent their access to funds.

There was a wave of criticism and anger from Iraqi politicians and leaders of armed factions, especially those associated with Iran, who complained of “unilateral sanctions that violate Iraqi sovereignty and target Iran and its allies in Iraq under the pretext of human-rights abuses and corruption.”

The protests were accompanied by heavy pressure on Iraqi Prime Minister Adel Abdul Mahdi and the governor of the central bank to change the policy. Four days later the bank issued a new circular that limited the financial freeze to US dollars only, permitting withdrawal of Iraqi dinars. It was then that the surge in dollar purchases through middlemen began.

Bankers said depositors were withdrawing their funds in Iraqi currency "to avoid attracting the attention of the US Treasury, which monitors the movement of the dollar in Iraq.”

Iraqi security officials, members of parliament and armed faction leaders told Arab News that most politicians and commanders associated with Iran, or who enjoyed its support, were “deeply concerned” as they believed they could be targeted by US Treasury sanctions at any time. This has prompted them to withdraw their money from Iraqi banks and transfer it abroad to “minimize the damage.”

“The sanctions have deeply confused and concerned them,” a senior Iraqi national security official said. “They began to withdraw their money from Iraqi banks and settle their financial assets with the Iraqi government to reduce the damage and avoid having their assets frozen and property seized in the event of sanctions.

“Our information suggests that they transfer most of the money to private companies in Dubai, and use some of it to buy property, both inside and outside Iraq.

“Actually, this is not new. They have been laundering their money for years, but what has happened now is that the sanctions have entangled them and forced them to change how they do it.”


Sudan schoolbook picture sparks angry reform debate

Sudan schoolbook picture sparks angry reform debate
Bookseller Yaqoub Mohamed Yaqoub, 45, sits by his roadside stall where he has been working for 15 years, in the Sudanese capital Khartoum, on January 14, 2021. (AFP)
Updated 33 sec ago

Sudan schoolbook picture sparks angry reform debate

Sudan schoolbook picture sparks angry reform debate
  • Unrest ricocheted beyond North African country, triggering uprisings, crackdowns, civil wars

KHARTOUM: As Sudan’s transitional government shifts the nation from the Islamist rule of ousted strongman Omar Bashir, a new schoolbook has sparked controversy for reproducing Michelangelo’s iconic “Creation of Adam.”
Khartoum’s government has embarked on deeply controversial reforms in a bid to boost its international standing and rescue its ailing economy — but bringing it into a confrontation with those who see changes as anti-Islamic.
The offending picture, in a history textbook for teenagers, has become a flashpoint in the argument. “It is an ugly offense,” said Sudan’s Academy of Islamic Fiqh, the body ruling on Islamic law, which issued an edict banning teaching from the book.
Michelangelo’s fresco, depicting the Biblical story of God reaching out with his hand to give life to Adam, is a flagship piece of 16th century Renaissance art that forms part of the Sistine Chapel’s ceiling in Rome.
“The book glorifies Western culture in a way that makes it the culture of science and civilization — in contrast to its presentation of Islamic civilization,” the Fiqh academy added.

BACKGROUND

In a viral video, a preacher broke down as he waved the book during Friday prayers, accusing it of promoting ‘apostasy’ and ‘heresy.’

Furious Muslim clerics have railed against the book and other changes to the school curriculum.
In one video widely shared on social media, a preacher broke down as he waved the book during Friday prayers, accusing it of promoting “apostasy” and “heresy.”
Another urged followers to “burn the book.”
But others defended the changes, saying they were part of necessary education reforms.
“The picture is not in a religious book,” teacher Qamarya Omar said.
“It is in a history book for the sixth-grade under a section called European Renaissance, which makes it placed in context.”