Continued Currency Transfer Challenges; Iraqi Central Bank Cannot Transfer Dollars to Iran

After numerous back-and-forths regarding the collection of Iran's currency claims from Iraq, the Secretary-General of the Iran-Iraq Joint Chamber of Commerce announced the 'impossibility' of cash collection and stated that the Central Bank of Iraq 'does not have permission to transfer dollars to Iran.' Jahangir Sanjabi Shirazi, in an interview with ILNA news agency, spoke about the requirement for exchange offices to declare the destination of dollar transfers to the Central Bank of Iraq and emphasized that 'imports from Iraq declined last year.' In early April of this year, Mohammad Kazem Al-Sadeq, the Iranian ambassador to Iraq, stated in an interview with Iraqi news television that Iran has more than $11 billion in claims from Iraq for gas and electricity sales. In June of last year, Javad Owji, the Iranian Minister of Oil, mentioned that 'after several months of negotiations, Iran received $1.6 billion in claims from previous years for gas exports to Iraq.' At that time, the Iranian Gas Company announced that Iran's gas claim from Iraq was $6 billion and stated that part of this amount was used for importing goods from Iraq. On the other hand, Yahya Al-Ishaq, the head of the Iran-Iraq Joint Chamber, discussed how Iran's claims from Iraq would be collected: 'Based on an agreement with the Iraqi side, this claim will be collected in two ways: one through cash remittance and the other through commodity barter, where we purchase our essential goods from other countries and Iraq pays for them to settle our claim.' However, increased oversight of the Iraqi currency market began last autumn, leading to severe fluctuations in the dollar price in Iran. Consequently, the United States dispatched a high-level delegation to Iraq and other regional countries to prevent the Islamic Republic from circumventing sanctions, resulting in reduced access to dollars for Iran. In this context, Foad Hussein, the Iraqi Foreign Minister, stated in February 2023 that the Iraqi government is working to resolve the dollar issue. Foad Hussein added, 'Prime Minister Muhammad Shia al-Sudani is in contact with the United States to restore the value of the Iraqi dinar against the dollar, and we will soon travel to Washington regarding this matter.' The Iraqi Prime Minister also dispatched special counter-terrorism forces to combat currency sellers who smuggle dollars to the Islamic Republic. A senior banking official stated that the United States sent a clear message to Iraqi officials: 'Comply with the new regulations, or the Central Bank of Iraq will face penalties.' Following the concerns raised, a member of the Tehran Chamber of Commerce delegation stated, 'The scope of sanctions has extended to our friendly countries, including China, the UAE, and Iraq, and they are also complying with U.S. sanctions, limiting their trade relations with Iran.' Hassan Mansour: 'The dollarization plan with imports of about $50 billion a year is meaningless.' 71 individuals accused of 'major currency disruption' in Iran have been arrested; Ahmad Alavi: 'This is just cleaning up the issue.'